Converting a redundant church can be a unique and exciting opportunity. Thanks to a change in law back in 1969 (Redundant Churches and Other Religious Buildings Act 1969), hundreds of dis-used and otherwise redundant churches have since been converted into alternative purposes.
While substantial external alterations of the building are not likely to be permitted, existing windows and doors can be retained and restored with sensitivity and new conservation rooflights may also be installed for additional light.
Church conversions are becoming an increasingly desirable option to live in due to their distinctive features such as high ceilings, tall windows, and original characteristics. These types of properties are often located in sought-after, rural areas which may appeal to many potential buyers. However, the main concern a lot of buyers face when considering buying a converted church is how to obtain a suitable mortgage for the property.
This guide will provide an overview of the various approaches to purchasing a converted church, the requirements for conversions, and the mortgage options available.
There are two main ways to live in a converted church
Buy a Previously Converted Church
One option is to purchase a church that has already been converted into a residential property.
In the UK, it’s estimated that over 2,000 churches have been sold and converted. However, due to the smaller number of churches compared to other property types, finding one that is for sale may take some time, and competition for the property could be high.
Convert one Yourself
Every year, more of these beautiful buildings are being sold. You could purchase a dis-used church building yourself, and then convert it into your ideal home.
Are mortgages available?
In general, obtaining a mortgage for a converted church can be fairly straightforward.
Since many churches have already been converted to residential properties, lenders have some experience of dealing with them.
A lot will depend on where it is, and what it is made from.
As with any property, the specific mortgage you need will depend on its intended use.
These uses include residential, second home, buy to let, holiday let, and commercial mortgages, each with its own criteria, deposit amounts and interest rates.
Some converted churches may be considered “non-standard construction” due to the use of materials and building methods that differ from standard construction methods.
As a result, you may need to obtain a specialist mortgage to finance the purchase of a converted church, which often requires help from a specialist mortgage broker. Additionally, proof of stable income and affordability checks remain among the standard requirements when applying for any mortgage.
Doing your own conversion
If you’re contemplating the purchase of a church property to convert into a home, you’ll need to apply for a specialist mortgage, such as a self-build mortgage.
Converting a church is perceived as a high-risk project by mortgage lenders and requires a detailed plan of work. Despite the challenges, getting a mortgage to convert a church is still possible, especially if you work with a specialist mortgage broker.
Some of the requirements to successfully convert a church include obtaining outline planning permission and approvals from the Church that it is part of. Before the building can be transformed, it must first undergo a process of deconsecration.
For listed buildings, additional consent is also needed if the modifications will change their appearance. A detailed architectural plan, time-frame, and a contingency fund are necessary to provide clarity to mortgage lenders.
Lenders also require surveys of the property to identify any structural issues and non-standard construction materials.
Additionally, having an accurate estimate of the total conversion cost is a must, and it should include all material and labour costs, as well as expenses for additional surveys, contingency, and any other costs.
While there are several requirements to be met, having a thorough plan of work and contingency arrangements may increase your chances of achieving your desired outcome and securing a mortgage to convert a church.
Using a self-build mortgage
Financing your church conversion can be complex, and self build mortgages are the most common way to do it.
However, due to the non-standard construction of many churches and any listed building status, you may be limited in your choice of lender and may need extra assistance from a broker.
A self-build mortgage is a type of mortgage that is taken out for building a home or renovating an existing property.
It differs from a standard mortgage in that the funds are released to you in stages throughout the conversion process, rather than as one lump sum at the outset.
For larger conversions these instalments are dependent on the completion of specific stages of the building work, with each stage needing to be checked and signed off before the next release of funds.
The deposit requirement for self-build mortgages is generally higher than for standard mortgages, with a minimum requirement of around 20-25%.
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.
Finance alternatives
A mortgage is normally the best option to finance a church conversion, and a whole of market mortgage broker can help you find the right deal.
However, there are other ways to finance a church conversion, such as a capital raising remortgage, bridge loans, and development finance.
Remortgaging another property involves raising the extra funds from your existing home (or investment property) to fund the conversion.
Bridge loans provide short-term financing for situations where you need money before you get a mortgage or between different stages of a self-build loan.
Development financing is generally used for commercial projects or buy-to-let properties and can cover ongoing costs during construction.
It’s also possible to mix and match some of these.
What about first time buyers?
A first-time buyer can generally get a standard residential mortgage for a church that has already been fully converted.
However, it might be more difficult to get a non-standard construction mortgage, self-build mortgage or commercial mortgage.
Unmortgageable churches
Your lending options will be reduced if the church has a Grade 1 Listed Building, a graveyard attached to it, or has restrictive covenants limiting what modifications you can make.
Many lenders will deem these too risky to lend on.
How a broker can help
Mortgages for church conversions can be tricky but not impossible.
If the church has already been converted, it’s relatively easy to get a mortgage.
However, self-build mortgages or development finance for churches that need converting are more difficult to obtain and require detailed planning.
Working with a broker can be extremely helpful when it comes to financing a church conversion. They will be able to assess both your wider financial circumstances and the specific requirements of the project, giving you access to niche lenders that may be difficult to find on your own.
And not just that –
Brokers can also negotiate rates on your behalf and help you ensure that all documentation is in order for a successful finance application.
