Non-standard building methods and materials are becoming increasingly popular in the construction sector. But what will equity release lenders accept?
Restricted equity release offerings on properties built using non-standard construction methods and materials exist. The year of construction, along with details of the wall materials, thickness, and roof construction, will all impact whether you can get equity release.
The more you and your advisor know about taking equity release on a non-standard built property, the more time you will save in the long run.
Let's examine some common non-standard construction methods and their impact on equity release.
In this guide, you will learn:
In this guide, I will focus on the most common type of equity release, lifetime mortgages.
The alternative, a home reversion plan, can be more flexible but will involve selling part or all of your home, which we try to avoid where possible.
You can usually get equity release on a non-standard construction property, but you may have limited access to lenders and products.
This could mean reduced loan amounts or higher interest rates than the headline rates available.
On occasion, there may be no equity release lenders available for you, depending on the type of construction method used.
We will explore some construction methods which are unacceptable later in this guide.
Most equity release plans are repaid from the sale proceeds of your property when you pass away or move into long-term care.
The equity release lenders want security, knowing that any home they lend on can be easily sold decades later.
Equity release loans are long-term investments for lenders, and they take a low-risk approach to the types of properties they lend on.
Non-standard properties can be unique, so if the surveyor (who values your property) believes the house will take a long time to sell, they will advise the lender, and the lender may reject the application.
Non-standard construction properties can also be less structurally sound than standard-built ones.
For example, a stone-built property can last several hundred years with minimal repairs. In contrast, structural insulated panels (SIPS) can have a short lifespan of only 50 years.
As lifetime mortgages are designed to run for the rest of your life, lenders prefer to offer equity release against properties with long lifespans.
Most equity release plans offer free valuations; therefore, you should not incur any lender costs if you cannot take an equity release due to your property's construction.
We work on a No-Completion No-Fee basis, meaning you will not owe us a penny if you are refused equity release!
Similarly, our recommended solicitors, Barton Law, only charge their equity release fee on completion.
However, some advice firms and solicitors will charge upfront fees, which may be non-refundable.
As non-standard construction properties are refused more often than standard-built ones, I strongly suggest you avoid firms charging you upfront.
Equity Release lenders classify properties built of brick or solid stone with a pitched tiled or slate roof as standard construction. Any other types of construction are classed as non-standard.
Let's take a look at some common non-standard construction types.
Can you get equity release with a timber-framed property?
You can usually get an equity release on a timber-framed property, providing that the property was built pre-1920 or post-1965. The property must also have an outer skin of brick, stone or block.
However, a fully timber-built property is not acceptable to any lender.
Tudor-style homes are also broadly acceptable, but the equity release lender will rely on the comments from the surveyor who values your property as part of your equity release application.
If your timber-framed home was built between 1920 and 1965, you may struggle to get equity release.
Can you get equity release with a concrete property?
You can get equity release with a concrete property; however, you will have limited access to lenders and products. The concrete type and construction year are essential for determining if you can get equity release.
Below are a few types of concrete acceptable to most lenders:
- Wimpey – No Fines concrete walls
- Laing Easiform Concrete
- SSHA ( Scottish Specialist Housing Association ) No Fines Concrete
If your property is built of precast concrete or panels, it is challenging to get an equity release. Most prefab concrete houses were constructed shortly after World War II and have already outlived their life expectancy.
Lenders may also require hardness tests on the property to ensure the concrete is still structurally sound.
Can you get equity release on a steel-framed property?
You can get equity release on a steel-framed property, but you will have limited access to lenders and products. Most lenders will only accept steel-framed properties built post-2000. If the property is a flat, the flat must be part of a block, and acceptability is subject to the surveyor's comments.
The year of construction and property type impact whether you can get equity release on a steel-framed home.
Can you get equity release on a pre-fab home?
Properties built of concrete pre-fab are often rejected for equity release. Aviva will review the property before the valuation takes place. If your property has previously been repaired, more options are available.
Property underwriting for other pre-fab construction, including SIPS, is regularly changing, so it is best to inquire about checking for the latest lending options.
Your equity release advisor will enquire on your behalf and let you know the outcome as soon as they know.
Can you get equity release on a modern eco home?
You can usually get equity release on a modern eco home. Property underwriting is constantly changing for modern construction methods as more is learnt about the longevity of the construction method. Even if you have previously been rejected, you may now be able to get equity release.
Your equity release advisor will check the latest underwriting and advise if you can get equity release.
If you have solar panels installed at your home, we need to know if they are owned or leased. If leased, the lender will require a copy of the lease and may request that clauses be changed.
Having an eco home could also be beneficial for equity release. You may be able to achieve a reduced interest rate if your property has a valid Energy Performance Certificate (EPC) rating of A or B.
Some lenders will be able to check your energy rating for free, too.
Can you get equity release on a single-skin brick home?
Single-skin brick must typically be over 225mm thick to get equity release. If less than 225mm thick, you will usually only be able to get equity release if only a small percentage of your outside walls is thinner than 255mm.
Commonly, equity release lenders only allow 10% to 15% of the property's walls to be single-skin brick less than 225mm thick.
If you are still determining the percentage of your home the single-skin brick covers, don't worry. As part of your application, you will receive a free valuation from a surveyor. They will assess the amount of single-skin brick and whether your property is acceptable.
If a part of your property is single-skin brick, but the rest is built of another construction method, such as double-skin brick or cavity, the lender will still need to assess the thickness of the part that is single-skin.
Can you get equity release on a cob construction home?
You can usually get equity release on a cob construction home. Cob, cobb, or clom (in Wales) will limit the available equity release plans. The lender will rely on the surveyor's comments before confirming they are happy to lend.
Can you get equity release with a felt roof?
You can get equity release if your property has a felt roof. The percentage of felt covering your roof will limit the number of lenders and plans available; however, some lenders accept 100% felt roofs. The condition and age of your roof will be assessed, and you may require a certificate or warranty.
Felt typically only covers a portion of the roof, with the rest being tiled or slate. If less than 30%, you can access nearly all plans. It can be challenging to get equity release on a 100% flat felt roof, but a couple of lenders will consider it, subject to the surveyor's comments.
Can you get equity release with a rubber roof?
There are limited equity release plans available for properties with rubber roofs. The percentage of rubber roofs and the roof's age and condition will impact whether you can get equity release.
The lender may require you to provide a certificate or warranty from a reputable company that completed the work.
Rubber roofs typically only cover a portion of the roof, with the rest being tiled or slate. The lenders allow for a maximum percentage of the flat roof, varying from product to product.
As with any flat roof material, getting an equity release can be challenging if it is entirely flat with no pitch. However, some lenders will consider it, subject to the surveyor's comments.
Can you get equity release with a thatched roof?
You can get equity release if your property has a thatched roof. Reed and straw are the most accepted, and the lender must know when the roof was last replaced.
The lender will heavily rely on the surveyor's comments, and you may need to provide a certificate or warranty for the lender to review.
Not all hope is lost if you have previously been declined equity release because of non-standard construction.
As all equity release lenders have their own criteria, one lender may decline your application, which is acceptable to another.
Different equity release firms and advisers have access to various lenders, and some are restricted to certain ones. This is often referred to as "tied" advice.
We might have access to a lender your previous advisor didn't
I don't want to promise anything, but we might be able to help you, even if you have previously been advised that there is no option.
Important: Regardless of your advisory firm, it is vital to tell your new equity release adviser if you have previously had an application refused.
Discussing this with your new adviser will help them recommend an acceptable product rather than go down the same path as before.
Lending criteria regularly change. So, even if you have been declined before, your property may now be acceptable.
If equity release isn't an option, there may be other suitable solutions to help you achieve your financial goals.
We have written an article on alternatives to equity release, which you can find here.
If you have further questions, why not speak with one of our qualified advisors?
Call us on 0207 158 0881 or use our online form to book your FREE consultation.
While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.
To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.
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