Due to the demand for more affordable property, a new type of property has become increasingly popular. It is called a prefabricated property. Their eco-friendly nature and affordability means they’re a great option for those with lower budgets in a time when the number of affordable houses on the market is low.
However, getting a mortgage for one is not so straight forward; they’re held to different standards of structural integrity, which is something lenders take into account. Fortunately, our Ealing-based mortgage advisors are here to help you understand your options.
What are prefabricated properties?
A Prefabricated property (also known as prefabs or modular homes) is manufactured in a factory and then shipped in parts and constructed on site. They’re much more cost-efficient to build because by leaving construction materials on-site when building a traditional property, building materials are subject to weather, costing the builders time and money when they have to replace damaged materials. By manufacturing the different parts of the property in a factory, multiple sections can be worked on at once, plus the building materials are not subject to weathering and do not need replacing.
While they are produced under controlled conditions, some lenders can be apprehensive about prefabricated property due to concerns about their structural integrity. Prefabricated properties have to conform to strict building codes to make sure they are structurally sound, but unfortunately many lenders are still reluctant to offer mortgages for a prefabricated property.
Can I get a mortgage for my prefabricated property?
Due to this apprehension, some lenders require the builders of the prefabricated property to have been accredited under the Buildoffsite Property Assurance Scheme before they will consider offering a mortgage for it. This gives them the assurance that the prefabricated property will be durable and they will eventually be able to re-sell it in the future to get their money back, making it worthwhile to offer a mortgage for it.
When considering an application for a mortgage, the lender will usually refer to specific guidelines to determine whether the prefabricated property satisfy those guidelines. Examples of what mortgage lenders look for include:
- If the property is on owned land– You are more likely to get a mortgage on a prefab property which is on land directly owned by you. They consider properties on leased land a bigger risk and are less willing to offer a mortgage for a prefab property there.
- If the property is secured to a firm foundation– To ensure structural stability, prefab properties must be firmly secured to a permanent foundation.
- If the property is in a good overall condition
- If the property has up-to-date services– There should be a permanent internal heating source (such as central heating) and the property must be hooked up to water, gas, and electricity supplies. These must also meet government standards.
As said by our senior mortgage advisor, Sam Thomas: ‘It is difficult to give specific information regarding whether lenders will offer prefabricated property mortgages, as they all have different policies and would need to assess the characteristics of the specific property, such as if it is built on a secure foundation. However, we are happy to have a no obligations consultation and give you the best advice possible”.
How Starck Uberoi can help
Our conveyancing solicitors have vast experience helping people buy prefabricated property. Our in-house mortgage advisors can also arrange finance for those buying a prefabricated property.
For more information, please see the mortgage and conveyancing page on our website, or to book an appointment please call 020 8840 6640. Our offices are based in Brentford, Ealing, Chiswick, Canterbury and London Victoria. We can also provide a professional Notary Public service at all our offices. For an appointment at any of our offices, email us at solicitor@starckuberoi.co.uk or call 0208 840 6640.
