retirement mortgages

Brocade

Hi All, can anyone advise on retirement mortgage/equity release, please? Our house is modern timber frame, built to a high standard and meets current building reg standards, but it appears that mortgage companies are reluctant to lend on anything that's not "traditional construction" by which they mean brick. I can't understand why mortgage companies want to hold back progress in building, since most "new" methods offer higher standards of insulation and are more sustainable, for many reasons. So far we have met with refusals, it appears we may have to sell our home in order to raise money to help our daughter with a house deposit. Any advice or insight from those in the industry welcome, please!

K_S

@brocade You are partly correct, in that lenders are cautious with lending on what they see as "non-standard" constructions types.

But very generally speaking, from experience, post 1970 timber framed houses are usually mortgageable with the right lender as long as they have a traditional (brick, stone, etc.) outer skin.

MWT

Unfortunately, unlike most other residential mortgages, the majority of retirement products depend on the saleability of the house as the primary repayment method so the lenders have got more selective in what they will lend on and where it is located.

I'd still be surprised if timber-frame alone was the problem, what is the nature of the exterior cladding in your case?

Brocade

It is traditional lime render on the outside

Brocade

Mortgage lenders are perpetuating the problem they have created - they won't lend on properties they think could be difficult to sell, but they would only be difficult to sell because mortgage lenders won't lend on them. And in the process they are restricting progress on increased insulation and sustainability in housebuilding. It's a vicious circle that they have created.

lonibra

Brocade said:

It is traditional lime render on the outside

Surely the lime render goes on top of the brick/stone?

MWT

lonibra said:

Brocade said:

It is traditional lime render on the outside

Surely the lime render goes on top of the brick/stone?

That's where I'm stuck as well, our house has considerable amounts of rendering on the outside but that does not affect our ability to get a mortgage product or indeed equity release, as the underlying construction is brick and block cavity wall.

What is between the timber-frame and the render is going to be important here.

Brocade

The lime render is on stainless steel rib lath. It doesn't need to be on blockwork.

Brocade

The structure is all approved by Building Control, so I don't understand why mortgage companies should be concerned, surely they should trust the experts.

lonibra

Brocade said:

The lime render is on stainless steel rib lath. It doesn't need to be on blockwork.

Isn't there any brickwork behind the lath?

As far as the banks go, their money their rules unfortunately. I'm sure they have some justification for not lending on your type of property.

MWT

Brocade said:

It is traditional lime render on the outside

Brocade said:

The lime render is on stainless steel rib lath. It doesn't need to be on blockwork.

Thanks for the added detail.

So the lime render is 'traditional' but its use on that type of cladding is not, which explains the problems you are having.

This isn't about Building Control approval or a judgement on the likely lifespan of the materials you have chosen, it really is just down to how easy it will be to sell the property and hence the number of buyers who would wish to buy a property like yours, and of course how closely such property will follow general house price inflation over time.

Yes there is an element of how easy it will be to get a mortgage and yes you are right that becomes a self-serving circle, but there is also a genuine concern about the pool of buyers looking for this type of modern construction vs more entirely traditional methods.

If you are having problems with Equity Release, is it possible to consider a repayment mortgage?

You haven't mentioned how old you both are, but repayment mortgages don't just stop at 65 these days and if you have the income to pass the affordability test then you may still have options, but granted, the construction may limit the pool of lenders...

Have you ever had a mortgage on this property? If so perhaps talk to that lender about what is possible now?