Concrete houses are undoubtedly a great option for those looking for an affordable home, even with the extra challenges of finding a mortgage. With the proper maintenance and repairs these PRC houses can last for a good number of years.
However, the exact same obstacles don’t apply to the very modern homes, built with poured concrete, as seen on Grand Designs, as they are not built with PRC. Although, because many of them use innovative designs and ideas, they have their own set of mortgage hurdles to overcome.
In this article we look at PRC houses that were built before the 1980’s, such as; BISF, Wimpey no-fines, Airey and Reema.
What exactly is a concrete built house?
Concrete homes were first built after the Second World War.
At that time there was a general shortage of housing and a massive need for affordable homes, as soldiers returned to re-join their families and the country started to re-build.
The need to build low-cost housing at scale led to the development of new construction methods, including precast reinforced concrete, or PRC.
The innovative design was intended to provide modern, comfortable housing at an affordable cost. However, many decades later, PRC houses were subsequently found to have serious defects, including poor insulation, dampness, and structural issues.
During the 1980’s lenders began to limit their lending on these properties, due to the structural problems, and also introduced additional checks for these types of houses.
Can you get a mortgage on a concrete house?
Today, there are still many concrete houses in the UK and mortgages are available for purchase and refinance.
Due to their well-documented structural deterioration, lenders are wary of these types of houses, with many refusing to accept them at all. This means that there is a reduced number of lenders willing to take them on, and so getting a mortgage is that much harder.
Mortgage lenders categorise properties as standard or non-standard. This helps them to assess the risk of lending against assets which are not built with traditional bricks and mortar.
Unsurprisingly, PRC and concrete homes are classed as non-standard construction.
From a borrowers perspective, this means that you have a smaller number of potential lenders to review and you may find that a larger deposit is required, because of the property construction. If your heart is set on buying a concrete built house then make sure you speak to an independent mortgage broker. They are mortgage experts and can search through over 100 lenders, to find those willing to grant you a mortgage on a non-standard house.
Why is getting a mortgage more difficult?
When a lender looks at a mortgage application it will want to know:
- Can these borrowers afford to pay me back?
- If they can’t, can I easily sell the house to repay the debt?
From the lender’s point of view, a PRC house poses a few issues:
- It has known structural problems which may get worse
- There’s a need for regular maintenance, which may not get done
- The re-sale market for these properties is quite small
Lenders are more apprehensive because of these additional risks, which a standard home does not have.
Concrete houses use steel to reinforce certain sections and for load bearing columns. Weaknesses have been identified where these steel components slowly corrode over time, reducing their strength and weakening the structure of the house.
This will make them harder to resell.
To compensate for the additional risks a lender will:
- Offer a reduced loan to value (LTV) percentage
- Charge a higher rate of interest
- Instruct a surveyor to assess the property more thoroughly
- Take into consideration which company built the house and which ‘system’ was used.
How long do concrete houses last?
The lifespan of a PRC concrete house can vary, depending on factors such as the quality of construction, maintenance, and environmental conditions.
Generally, these homes were intended to have a lifespan of around 60 years. However, some PRC homes have exceeded this estimate and are still standing today, more than 70 years after they were built.
It’s important to note that the durability of PRC homes can be affected by issues such as concrete degradation, corrosion of steel reinforcements, and structural defects. In many cases, PRC houses have undergone repair and refurbishment works to address these issues and extend their useful life.
With proper maintenance and repairs, some PRC homes may continue to be habitable for several decades. Nevertheless, their long-term future remains uncertain due to the unique challenges associated with their construction method and materials.
WhAT THE lenders SAY ABOUT this style of property
Do we lend on any property?
No. We require experienced RICS (Royal Institution of Chartered Surveyors) qualified surveyors to consider all the factors that may affect the suitability of a property to be mortgaged and whether or not it is readily saleable. Factors may include property construction, type, location, uses and environmental issues. Each case will be assessed on its own merits. Some property types such as houseboats, mobile homes and timeshares are specifically excluded.
Do we lend on houses or flats/maisonettes made from precast reinforced concrete (PRC) that have been designated defective under the 1985 housing act?
Generally not, unless the property has been repaired to a scheme that is approved by us. Flats/maisonettes which are designated defective PRC type are not acceptable.
Do we lend on PRC properties that have been repaired but have no repair certificate?
No. However, we will accept a ‘retrospective repair certificate’ confirming the repair has been undertaken to the standards laid down in the PRC Homes Repair Scheme or those accepted by us. The certificate must be in a format with wording required by us and prepared by a suitably qualified, experienced professional.
Property types – acceptable
In all the examples below the valuer must confirm saleability and suitability for mortgage purposes, if they can then we can consider lending against the following:
- No-fines concrete construction (exceptions apply)
- Steel framed houses (exceptions apply)
- Flats over or immediately alongside business premises
- Freehold flats – where it is possible to enforce positive covenants. Before considering lending against this type of property, we rely on the valuer’s recommendations and the solicitor’s confirmation that the property title is good and marketable
- Agricultural restrictions – the maximum LTV will usually be 50% but each case will be assessed on its own merits
- Properties used for business – we can only lend if the property is primarily for residential use and the work area of the property is 20% of the total property area or less
- Leasehold properties – there must be at least 30 years left on the lease at the end of the term (we may consider less for properties in central London). Properties with lease lengths below 80 years at application should be discussed before submission
- Flats (on any level) in multi-storey type properties are usually acceptable, subject to exceptions e.g. where the valuer identifies issues with the building and/or locality which are likely to adversely affect resale
Property types – unacceptable
- Properties with a floor area of less than 30m2
- Properties with a plot size in excess of 4 hectares/10 acres
- Properties listed under the Housing Defects Act (valuers will advise us if the property falls within the Act)
- Steel clad houses
- System built concrete construction
- Prefabricated/(pre)reinforced/poured or shuttered concrete construction
- Easi-form construction (except by Laing from 1945 onwards)
- Mundic block property
- Properties built on contaminated land
- Timber-framed property with cavity wall insulation unless installed during construction
- Multi-ownership properties
- Shared ownership properties
- Working farms, smallholdings and crofts
Wimpey No Fines and Laing Easiform
Properties dated from 1945 onwards are acceptable, subject to the valuer’s comments, at the lower LTV ratio of 80%.
Bear in mind that Wimpey No-Fines properties are currently being monitored in the north of England where some deterioration has been noted. If this construction type is subsequently defined as ‘defective’, this could have a significant impact on the value and saleability of the property.
Standard properties
Other than house boats and mobile homes, there is no particular type of property that we cannot lend against subject to the property meeting our non-standard construction type criteria.
In order to be considered suitable for mortgage purposes, properties must be habitable with a fully functioning internal kitchen and bathroom and with no restrictions on occupancy.
Property acceptability is based on a satisfactory valuation report from the bank’s appointed valuer. Non-standard construction will be assessed on individual merit.
Certain types of pre-cast reinforced concrete (PRC) construction are designated defective and may not be acceptable unless repaired.
Unacceptable Property/Construction Types
- Any property over which buildings insurance cannot be arranged on standard terms
- Properties which are structurally unsound
- Properties which are not immediately and readily lettable
- Bed-sits, houseboats and mobile / park homes
- Properties split into separate units of accommodation (e.g. house converted into two flats without separate leases)
- Freehold flats that do not meet our freehold arrangement policy
- Farms / small holdings or other properties where there is land subject to current agricultural use
- 100% timber built property (i.e full timber frame with full timber cladding and no brick / blockwork at ground level)
- Grade 1 & Grade 2* listed properties in England & Wales.
- Grade 2 listed properties are acceptable, subject to valuer’s comments.
- Grade A listed properties in Scotland
- Thatched properties
- Unrepaired, designated defective properties under the Housing Defect Act or not
- Non-traditional PRC houses where the subject property and any adjoining property has not been repaired
- Properties of large panel system (LPS)
- Single skin construction is only acceptable for an extension at ground floor level
- Properties with more than 10 acres of land
- Properties with restricted occupancy covenants
- Properties with a cladding system that does not meet Fire Safety requirements as required by The Building (Amendment) Regulations 2018
- Properties containing Mundic block materials are unacceptable (unless the property has a valid Mundic report with a scored rating of A1-A3, A/AB only)
- Flats with less than 30 sqm internal habitable floor area
Non Traditional Construction
Many properties have been built using a variety of different construction methods. Lending terms vary depending on construction types and if a repair scheme, where appropriate, has been used. Where a property is of non traditional construction please contact your usual Service Centre with the following details for further advice:
- The name of the type of construction
- Year built (if known)
- Flat/terrace/semi or detached
- Details of any repair scheme if appropriate and if the scheme applies to the whole block (e.g. the whole terrace/both semi’s)
The exact construction name is important as lending terms may differ between different types and year built. For example, our lending terms differ between Gregory, Gregory Drury System 3 and Gregory Housing. All three have different lending terms and it is important to ensure you give us the full and accurate name to avoid us giving inappropriate advice.
Non Standard Properties
Some properties constructed using non conventional methods of construction may be acceptable to Virgin Money subject to a satisfactory valuation report and valuer comment.
These include properties falling into the following construction types:
- Prefabricated reinforced concrete (PRC)
- In-situ poured concrete
- Steel framed
- Timber framed
- Craft techniques and period timber framed dwellings
- Mundic properties
- Modern methods of construction (MMC)
If you believe a property is of non standard construction, please contact us for clarification prior to submitting an application.
Unacceptable
Prefabricated reinforced concrete (PRC) homes not repaired under an approved scheme and / or where the adjacent property has not been repaired.
How a mortgage broker can help
Using a mortgage broker can offer several advantages when you’re looking to secure a mortgage, particularly if you’re considering a non-standard property like a PRC concrete house.
Here are some key benefits of working with a broker:
Expertise: Mortgage brokers have extensive knowledge of the mortgage market and the various lending criteria of different providers. They can help you navigate the complexities of mortgage applications, especially when dealing with non-standard properties, and can provide valuable advice tailored to your situation.
Time-saving: Researching and comparing mortgage options is time-consuming. A broker can do the legwork for you, identifying suitable lenders and presenting you with a range of options that meet your specific needs and financial circumstances.
Access to exclusive deals: Mortgage brokers have access to exclusive deals and preferential rates that may not be available to the general public. They can potentially help you secure a better mortgage deal than if you were to approach lenders directly.
Support throughout the process: A broker will guide you through the entire application process, from initial consultation to completion. They’ll help you gather the necessary documentation, submit your application, and liaise with the lender on your behalf, providing support and advice at every stage.
Independent: Mortgage brokers are not tied to any specific lender, which means they can impartially explore the market to find the best mortgage solution for your unique situation. This is particularly advantageous when dealing with non-standard properties like PRC concrete houses, as a broker can identify lenders who are more open to considering these types of homes.
In summary, using a mortgage broker can save you time, provide access to a wider range of mortgage options, and help you secure the most suitable mortgage deal for your circumstances. Their expertise can be especially valuable when dealing with non-standard properties and navigating the unique challenges they present.
CONTACT A MORTGAGE BROKER
If you are ready to take the next step then we can put you in touch with a fully qualified independent mortgage broker.
Mortgage eligibility criteria
The eligibility criteria for mortgages on non-standard properties like PRC concrete houses can vary depending on the lender and their specific policies. However, there are some general criteria that most lenders will consider when assessing mortgage applications for these types of properties:
Property condition
Lenders will require a detailed survey or structural report on the PRC house to assess its current condition and identify any potential structural issues. They will want to ensure that the property is safe, habitable, and has undergone appropriate repairs or refurbishments if needed.
Repair schemes
As mentioned earlier, lenders may look more favourably upon PRC homes that have undergone approved repair schemes, such as those offered by PRC Homes Ltd and then awarded a PRC Certificate. These schemes can improve the property’s overall stability and durability.
Mortgage deposit
Due to the perceived higher risk of non-standard properties, lenders will require a larger deposit, potentially around 20-30% or more of the property value. A larger deposit will reduce the lender’s exposure and make them more inclined to approve the mortgage application.
Affordability
Just like with any mortgage, lenders will assess your financial circumstances, including your income, expenditure, credit history, and any existing debts, to determine your affordability. You will need to demonstrate that you can comfortably meet the monthly mortgage repayments.
Credit score
A good credit score can help improve your chances of obtaining a mortgage for a PRC house. Lenders will want to see that you have a history of responsible borrowing and are likely to meet your mortgage repayments on time. Even so, options are available if you have a small amount of bad credit.
Property valuation
Lenders will require a professional valuation of the PRC home to determine its market value. This valuation will be a crucial factor in deciding the amount they are willing to lend.
Borrower’s age
Lenders have an upper age limit for mortgage borrowers, which can range from 70 to 80 years old, or even higher with some lenders. This maximum age limit refers to the age at which the mortgage term is expected to end, rather than the age at which the borrower applies for the mortgage.
Adjoining properties
Where any adjoining property is also a non-standard construction, like another PRC concrete house, lenders may have concerns about the combined risks associated with both properties. It’s likely that they will need both properties to have had their structural defects rectified under an approved scheme.
Types of concrete construction properties
The fact that a house is made from PRC concrete should be noted on the sales particulars issued by the Estate Agent.
When looking into the mortgage options it is really important to identify when it was built, exactly which type of construction was used and who was the original builder. Surveyors are well aware of the different types and some are definitely better than others!
Here are just some of the different types:
Woolaway houses were built between the 1940s and 1960s as a response to the post-war housing crisis in the UK. They are prefabricated reinforced concrete (PRC) homes consisting of concrete columns and beams with infill panels. Known problems include deterioration of the concrete due to water ingress, corroded steel reinforcements, and poor thermal insulation.
Developed by George Wimpey & Co., Wimpey No-Fines houses were constructed between the late 1940s and the 1960s. They feature a unique no-fines concrete, which is a mixture of cement and aggregate without sand. This creates a porous structure with good thermal insulation. However, issues with moisture penetration and difficulty in retrofitting modern insulation have been reported.
Airey houses were built in the post-WWII era, mainly in the 1940s and 1950s. They are made up of precast concrete columns and panels. Known issues include concrete deterioration, steel reinforcement corrosion, and thermal inefficiency.
Developed by John Laing & Son in the 1920s, Laing Easi-Form homes were constructed until the 1960s. They use a cast-in-place concrete system with removable formwork. Issues include concrete degradation, insufficient thermal insulation, and potential difficulties in obtaining mortgages.
Reema was the trading name of Reed & Mallik.
Reema houses were built in the 1950s and 1960s, and featured large precast concrete panels as their primary structural component.
There were two main types of Reema houses: Reema Conclad and Reema Hollow Panel.
Reema Conclad:
The Reema Conclad system consisted of storey-height precast concrete panels, which were joined together using steel brackets and bolts. The panels were made of dense aggregate concrete and featured a decorative exposed aggregate finish on the exterior surface. The interior surface of the panels was plastered for a smooth finish. The panels were load-bearing, and timber or steel roof trusses were used to support the roof structure.
Reema Hollow Panel:
The Reema Hollow Panel system was a later development and featured precast concrete panels with a hollow core. These panels were lighter than the solid Conclad panels and were designed to improve the thermal insulation of the house. The panels were connected using a tongue-and-groove joint, and the gaps between the panels were filled with grout. The exterior surface of the panels had a roughcast render finish, while the interior was plastered.
Both types of Reema houses share common issues associated with PRC homes, such as concrete degradation, steel reinforcement corrosion, and poor thermal performance. Over time, these issues have led to structural concerns, mortgage difficulties, and increased maintenance costs for the owners.
Repair and refurbishment schemes have been developed to address these problems and restore the structural integrity and energy efficiency of Reema houses.
Built in the late 1940s and early 1950s, Smith’s Dock houses are constructed with large precast concrete panels. They face similar issues as other PRC homes, such as concrete deterioration, corroded steel reinforcements, and inadequate thermal insulation.
Constructed between the 1940s and 1950s, BISF houses combine steel framing with prefabricated concrete components. Despite their robust structure, they can suffer from corrosion issues, poor thermal insulation, and difficulties in securing mortgages.
The Cornish Unit is a type of non-traditional housing built in the UK, primarily in the 1940s and 1950s, to address the post-war housing shortage. These houses were designed by the Central Cornwall Concrete & Artificial Stone Co. and were constructed using prefabricated concrete components. There were two main types of Cornish Units, which differed in their construction methods: Cornish Type 1 and Cornish Type 2.
The Cornish Type 1 houses featured a cavity wall construction, which consisted of an inner leaf of precast concrete panels and an outer leaf of load-bearing concrete blocks. The two leaves were tied together using metal wall ties. This design provided some insulation and resistance to moisture penetration. However, the metal ties were prone to corrosion, and the concrete components could degrade over time, leading to structural issues.
The Cornish Type 2 houses were an improvement over Type 1, featuring a solid wall construction instead of a cavity wall. These houses used large precast concrete panels as the main structural component, with the exterior finished in a roughcast render. The solid wall construction provided better structural stability but offered less insulation and resistance to moisture penetration compared to the cavity wall design of Type 1.
Both types of Cornish Units share common issues associated with prefabricated concrete homes, such as concrete degradation, steel reinforcement corrosion, and poor energy efficiency. To address these problems, repair and refurbishment programs, such as the PRC Homes Ltd. licensed repair scheme, have been developed to restore and improve the structural integrity and energy performance of Cornish Unit houses.
Unity houses were built during the 1950s and 1960s and consist of precast concrete panels. They suffer from issues such as concrete degradation, steel reinforcement corrosion, and poor energy efficiency.
Orlit homes were constructed in the 1940s and 1950s, made up of precast reinforced concrete columns and panels. Known problems include the deterioration of the concrete, corrosion of steel reinforcements, and inadequate thermal insulation.
Built in the 1940s and 1950s, Hawksley houses are prefabricated aluminium/timber framed bungalows. They are often mistaken for traditionally constructed buildings as they have a brick facing. Despite being lightweight and quick to construct, they are prone to issues with thermal insulation, structural rigidity, and mortgage difficulties.
Wates houses were built between the late 1940s and early 1960s, featuring large precast concrete panels. Some of the known problems include concrete degradation, corrosion of steel reinforcements, and poor thermal performance, which are common issues among PRC homes.
Calder houses were built in the 1950s, featuring precast concrete panels connected by steel joints. Common problems include concrete degradation, corrosion of steel components, and poor energy efficiency due to insufficient insulation.
Constructed in the 1940s and 1950s, Stent houses consist of prefabricated concrete components, including panels and beams. They face similar issues as other PRC homes, such as concrete deterioration, corroded steel reinforcements, and inadequate thermal insulation.
Getting the right advice
When it comes to getting mortgage advice for a concrete house, you’ll need to speak with a specialist mortgage broker who is experienced with non-standard construction.
They will know which lenders to approach for the type of concrete house you are interested in.
Respect Mortgages works with a leading independent mortgage broker who has a wealth of experience in dealing with these types of loans.
If you’re looking for a concrete house mortgage they can definitely help.
So please use the button below or call 0330 030 5050 so we can put you in touch with a mortgage expert.
FREQUENTLY ASKED QUESTIONS
Yes, it is possible but there tends to be additional considerations for these properties.
The internal design, or layout, can mean that the overall space is quite small or the kitchen area is within the living room. Many ex-council houses will be leasehold. If the remaining years left is too low then lenders won’t be interested. You can extend the term of a lease but it can be quite expensive to do so.
PRC concrete houses were built in the UK primarily as a response to the severe housing shortage that followed World War II. The war had led to significant destruction of housing stock, and there was an urgent need to provide affordable and rapidly-constructed homes for the growing population. PRC houses were seen as a solution to this crisis.
There was a scarcity of traditional building materials like bricks and timber due to war-related disruptions in supply chains. Concrete, on the other hand, was more readily available and easier to produce, making it a practical choice for mass housing construction during this period.
At the time, PRC homes were seen as a modern and innovative solution to the housing crisis. Post-war Britain was a period of experimentation in architecture and construction techniques, and PRC houses were part of this broader trend towards embracing new materials and methods.
Despite their initial appeal and advantages, the long-term issues associated with PRC concrete houses, such as structural concerns, mortgage difficulties, and maintenance costs, became more apparent over time. As a result, the popularity of PRC homes declined, and they were eventually phased out.
Concrete houses are more affordable than traditional properties, offering a budget-friendly option for first-time buyers. Their unique mid-century modern design may appeal to those who appreciate distinctive architecture. With the right investment in repairs or renovations, these homes can be transformed into comfortable living spaces, potentially increasing their market value.
PRC properties also present an investment opportunity for those with the resources to carry out the necessary work, possibly resulting in a profit upon resale. Additionally, since there may be less competition from other buyers due to mortgage and insurance challenges, you could have more negotiating power and secure the property at a favourable price.
However, it’s crucial to remember that PRC homes come with potential risks and challenges.
The mortgages are much harder to find, due to the limited number of lenders. The mortgage deposit required will be higher than normal, expect to pay 20-30%. Some lenders may offer loan terms at a higher rate of interest, due to the extra risk.
Buildings insurance will also cost more than a standard house.
The main way to do this is to have the property repaired by an approved company. Once the work has been completed you will be given a PRC Certificate which can be shown to prospective lenders as proof.
Yes, mortgages are available for employed, self-employed, company directors, CIS workers etc.
You will need to provide proof of your income and pass the affordability checks.
