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Mike Haupt – Mortgage Adviser
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Cob House Mortgage
We talk about cob house mortgages with Mike from Tomorrow mortgages
What is a cob house?
A cob house is a property that is built in a traditional style. It’s got stone foundations and a mixture of sand, clay and straw is layered up to build the walls. The roof is typically tile or thatch.
A cob house is deemed non-standard construction by a mortgage lender – but it is a very traditional way of building houses and fairly common within the UK.
Can it be difficult to get a cob house mortgage?
It is possible to get a mortgage on a cob house but sometimes it can be difficult. Plenty of lenders will look at cob properties and other non-standard construction properties. Many lenders will say that their decision will be based on the valuation of the property. They’ll look at what the valuer says after visiting it.
It also means you can get multiple requests to surveyors for different reports. So it can be done but it can also be a bit tricky at times.
Do you know anyone who has bought a cob house? What advice would they give to a potential buyer?
Several of my clients have bought cob houses. Where I am in Wiltshire, cob construction is relatively common.
The advice I would give is do your research. If you are looking at potentially buying a cob house, make sure you know what’s available within the market and be prepared for surveys. You will probably want to get a structural survey done. The lender may request specific surveys as well, potentially damp/rot and timber reports. They may even request a full structural survey themselves.
Another piece of advice is to be patient. You’re not going to get a mortgage on a cob house within a matter of a couple of weeks like you would on a traditional build. It will take time. The lender will look at things in a lot of detail and want to make sure they’re comfortable lending on that property.
It can take a while to move from the mortgage application stage through valuation through to mortgage offer. I always try to make sure you’re fully up to date with what is going on. So if there’s a question from the lender, or if things aren’t moving at a certain pace, I will find out why and what we need to do to move things forwards.
Can I get a mortgage on a cob house as a First Time Buyer? What if I’m moving home?
You absolutely can get a mortgage on a cob house as a First Time Buyer and again, if you’re moving home. It’s very much the same process.
There would be the normal mortgage application – you will need to fit that lender’s criteria for affordability and income. Then it would be very much down to the valuation surveys. As a broker we would make sure we match you up with the most suitable lender for your specific situation and the property.
Can I remortgage a cob house to make home improvements? Are there any issues remortgaging a cob house?
Remortgaging a cob house is very similar to getting a mortgage as First Time Buyers or home movers. If you are remortgaging from one lender to another, typically a lender would instruct a valuation or mortgage survey on your behalf and pay for it. Again, there could be requirements for additional surveys.
You would also have the option to stay with your existing lender – they would need to offer you a product if your current deal was coming to an end. Within the lender’s criteria you can often raise money on your mortgage for home improvements, with your existing lender or moving to another.
With doing home improvements, cob houses typically tend to be listed buildings, so there are some additional requirements on that side of things.
Can I get a Buy to Let mortgage on a cob house?
Yes, usually. It’s not one I’ve come across before in fact, but knowing the products the way I do, there will be property criteria to meet. We just need to make sure we approach the right lender that will accept the property.
Then that property would need to fit the criteria from an affordability point of view – that is, the rent needs to cover the mortgage comfortably. As long as you fit that lender’s criteria there’s no reason why you couldn’t get a Buy to Let mortgage on a cob house.
Will many mortgage lenders lend on a cob house?
Yes, there are plenty of lenders that will lend on cob houses. I work with just over 90 different lenders and a good number will lend on a cob house.
As I mentioned earlier, they will always say that lending is based upon the valuer’s comments. Once the survey’s been done and the valuers are happy with the property, they will move forward. They might request additional reports. They may possibly say no at that stage but there should still be plenty of good options out there for you.
What if I have bad credit?
As with any mortgage, if you’ve got bad credit there are niche lenders that will support you, depending on what your credit issue is. Very early on, if you had found a cob house that you like and you do have bad credit, we would do some research with the lenders. We would check whether you would fit their criteria, that they’d be happy to lend on a cob house and feedback to you from there.
What if I’m self-employed? Does this affect the process?
Again, not necessarily. It will come down to the lender and whether they’re comfortable to lend on that cob house. We would just make sure that from a self-employed perspective you would fit that lender’s criteria.
That means checking whether you have been trading for one or two years, and having the appropriate accounts in place. Do your accounts support the lending you need to buy that property? As long as you fit the self-employed criteria and they lend on cob houses, there’s no reason why you shouldn’t be able to go ahead.
How do you identify cob house construction?
It’s not always easy. Cob houses tend to be rendered, so you don’t always necessarily know what’s behind that render. Hopefully the estate agent will be aware that it’s a cob house and feed that back to you.
It should say on the property particulars that it is a cob construction house. You’d probably also get a feel once inside that property that it isn’t a standard build – you wouldn’t see the brick and tile construction of a typical home.
Are cob houses energy efficient? Does this affect the mortgage at all?
I’m no expert, but cob houses are thought to be very energy efficient. Because of the way they’re built they tend to keep cool in summer and are well insulated in winter.
But I would always talk to a specialist if you were looking at ways of improving the energy performance of any house – they’d be able to support you.
What are the pros and cons of a cob house?
A big pro is that this could be your dream home. You’ve fallen in love with it, it ticks all the boxes for you. It’s got character. There are lots of great things about cob houses.
On the more negative side, they’re not always the easiest to mortgage. You will have fewer options because they are of non-standard construction. Cob houses do take a little bit of maintenance – there will always be things you need to do with them. If they are a listed building there are rules to be aware of in terms of updates and improvements.
As with any property there’s always a risk of property price fluctuations. When you come to sell it you might have a slightly narrower market than if you had bought a standard construction property. But there are always options out there.
Don’t be put off, though – as long as you’ve done your research and you know your options then you can get that dream home.
How can a mortgage broker help?
I’ve had a few clients who have bought cob houses and we’ve successfully mortgaged all of those properties. My advice if you’re thinking of buying a cob house is to work closely with a mortgage broker from the outset.
It’s really important to research the lenders available to you, the criteria that might come up and what requirements they may have. Being patient is also important. Lenders may come back and ask for additional surveys and reports. There may be other things they might ask about to be comfortable lending on that property.
A mortgage broker makes things easy. If you try and do it yourself, you will struggle – it would take you hours going up and down the high street trying to look at the options. Instead, come and talk to someone independent like myself, who’s got access to multiple lenders and can do all of that legwork for you. We should be able to come back with some really good options that are right for you.
Think carefully before securing other debts against your home.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up with your mortgage repayments.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages.
Does It Cost For An Initial Chat?
Please don’t be afraid to pick up the telephone. Contact us with any questions or any conversations you want to have. There’s no commitment, there’s no silly questions. I’m here to try and help put your mind at ease, so let’s have a conversation and answer your questions.
Cob House (Part 2)
We continue the conversation about cob houses with Mike Haupt.What is the typical interest rate for a mortgage on a cob house?
There’s no specific or specialist kind of mortgage rates for cob houses. You’d be picking from typical interest rates available from the lenders. In some ways that’s really good – you’re not being disadvantaged by having a specialist type of property.
While it might be nice to have a few specialist products available to you, it’s good that you’re getting the best products available in the market from those lenders at the time.
Are there any unique considerations when applying for a mortgage on a cob house?
A cob house is a non-standard construction property. It’s not brick built with a slate or tile roof. So there are definitely extra considerations to look at, particularly around the condition of the property. What does the surveyor say? Do we need to get any specialist reports like damp reports or timber reports ?
We then need to find the right lender for that property. As we said in the previous episode around cob houses, not every lender will accept a cob house. It’s really important to understand the condition of the property from the outset so we can absolutely choose the right lender from the very beginning.
Do mortgage lenders view cob houses as a higher risk compared to traditional houses?
Some lenders will, yes. Not every lender lends on cob houses. Every lender will have their own property criteria and some just won’t lend on anything that is non-traditional construction.
But there’s a number of other lenders that will lend on non-standard construction properties like cob housing. They don’t necessarily see them as a higher risk, but because they are non-standard, there might just be extra questions that we need to go through with that lender to make sure they’re comfortable with the risk they are taking.
What information will I need to provide to a lender when applying for a mortgage on a cob house?
You still need to go through the standard documentation – payslips and bank statements to show affordability for the mortgage. Where the extra documentation might come in is in the form of valuations and surveys.
Mortgage lenders insist on having a mortgage survey done. They might then request extra documentation – more specialist reports, a full structural survey. We’ll just need to supply that information as part of the mortgage process.
Are there any specific lenders or mortgage products that cater to cob house financing?
There are a number of lenders that will definitely lend on cob houses, including some big high street banks as well as some smaller niche lenders. There are good options out there for you to mortgage a cob house, but there just are some lenders that just won’t touch them.
That’s good – because at least we know that from the outset. As we said, there are no specific mortgage products, so you’re choosing from the same rates anyone else would have, which is good news.
What are the potential challenges or limitations in securing a mortgage for a cob house?
The potential limitations come from the build types. Cob housing is non-standard construction, so a lender is always going to do extra due diligence around the property and make sure that they’re comfortable with it.
The valuer will view that property and that may throw up some additional surveys. It may be that the valuer is absolutely happy with the house. But typically you’re going to be asked for some extra surveys on the building to make sure the lender’s comfortable with lending on that property.
How does the construction of a cob house impact the mortgage application process?
With non-standard construction, it’s always going to be down to the valuer and the surveys that come off the back of that. That’s the bit that really impacts the mortgage application process.
The affordability part – whether they will lend to you as a person – is exactly the same as anybody else on any other property. The lender will look at your credit history, income, outgoings etc.
The property is what makes the difference – is it structurally sound? Will the lender be able to readily resell it at a later date if they needed to? Are any specialist reports needed on the property?
Those are the key things valuers will be looking at, that the lender is going to take into consideration when they decide to lend or not.
Is it possible to obtain a mortgage for a cob house if it is self-built?
Potentially, yes – a number of lenders will look at self-build mortgages. They will look at the building plans, where you’re looking to build how you’re looking to build it.
If it’s that you’re wanting to finance the property at the end of the build – so say you’ve had the money to build it, but it’s now finished, you’ve potentially got things like building regulations that the lender will want to see, and your Insurance Certificate to make sure the property is protected and guaranteed for at least the first ten years of construction.
Are there any specific certifications or qualifications that can help in obtaining a mortgage for a cob house?
I don’t believe so. I’ve done a bit of research into this because it’s not a question I’ve come across before. I can’t see that there are any special certifications. The key bit is always going to be around valuation.
Does the valuation of that property meet the criteria for the lender? That’s what they are interested in, rather than any certifications or qualifications around it.
Can you explain the overall affordability and long-term cost benefits of owning a cob house compared to a traditional house?
Cob houses have their unique benefits. They are quite thermally efficient and fairly environmentally friendly in the way they are built. Theoretically they should use a little bit less energy and be more cost-effective to run.
Look on some of the cob building forums on the internet. There are some really good examples around the running costs – that’s a helpful source for more information.
What are the resale value trends for cob houses? Are they a good investment?
Whether they are a good investment or not will very much come down to the area you’re living in and the type of property you’ve got.
Loads of factors will play into that. The challenges with mortgaging a cob house will always be the same in the future, so that’s one element to consider. I suggest talking to local estate agents with a history of selling cob houses. They’ll be a really good resource because they’ll know the local area, they know the demand for those kinds of properties and will help you out with understanding whether it’s a good investment or not.
Are there any government schemes or incentives available for financing cob houses?
It’s a really short answer. Unfortunately not – a simple one!
What advice do you have for someone considering a cob house in terms of mortgage options and financial planning?
Start early. If you know you’re going to be looking at a cob house, we need to understand that quite early on. Then we can start picking and choosing the right type of lenders for you.
It’s really important to do your research on the property – have there been historical surveys? The estate agent selling that property might be able to give you some guidance and even show you previous surveys if the current owners kept hold of them.
Do some research both on the mortgage side and on the property side early on. Consider the surveys you would want done – a full structural survey perhaps. Do you want other specialist reports done on damp or timber, and are you prepared to pay those costs out early on without a guarantee of potentially getting a mortgage?
Those are things to consider early on. It’s definitely worth having a conversation with us here at Tomorrow Mortgages early on to really understand the process and the options available to you at that stage.
Are there any specific insurance considerations for cob houses to be aware of?
Yes, absolutely. You will need a specialist insurance policy to protect the building. They are readily available, it’s not difficult to find them. Because it’s non-standard construction, it won’t fall into the typical home insurance policy – the insurer needs to know that it’s a cob construction. It’s just something to spend a bit of time researching.
What percentage of the property value can I typically borrow for a cob house mortgage?
It will depend on you as an individual and your credit score, affordability and deposit. You don’t necessarily have to have X amount of deposit – but the more deposit you’ve got is always better. It will very much depend on you as the individual.
Is it important to find a broker that specialises in cob house financing?
Where I’m based in Wiltshire cob houses come up on a very regular basis. So we’ve got a lot of experience of working with these properties and the lenders. We know the things you’re going to need to consider as you go through the process.
We’ve got a good idea of the lenders we can approach and the process. So we’re a really good place to start – talk to us and get a good understanding of what you can and can’t do.
How does the valuation process work for cob houses compared with traditional houses?
The mortgage lender will always request a mortgage valuation – this is very much for their purposes. It confirms that the house is worth X amount of money and it meets their lending criteria.
The difference with cob housing is that on the back of that mortgage valuation the lender is likely to request additional reports – a full structural or some specialist reports. That’s the big difference from traditional houses.
Are there any specific planning and building regulations that borrowers should be aware of when financing a cob house?
It is definitely worth looking at whether it is a listed building. Typically, that would be in the property particulars from the estate agent. Listed buildings can impact lender availability.
Whether it’s grade I or grade II listed might change your opinion or make the mortgage side slightly trickier.
In terms of building regulations, this will depend on when the property was built. Many cob houses in the UK are up to 300 years old, so regulations will have potentially changed.
So make sure you’re comfortable with that. Additional surveys could really be beneficial at that point to make sure that you’re happy with the building, the regulations and that everything’s up to date the way you want it to be.
It’s worth really talking to a broker early on, making sure you’re really comfortable with the property you’re buying, with surveys and information you’ve gathered before you go ahead and purchase.
What other things should we consider with cob houses?
This is a really niche area. This is a fantastic way to build a house and while we call it non-standard construction, it’s a very traditional way of building a property. I’ve helped customers buy stunningly beautiful cob properties, especially if they are well looked after and well maintained.
Yes, it can be a little bit challenging in terms of mortgages and getting through to completion, but they can be wonderful homes. It’s worth the effort and stress – there’s a big reward at the end of it all.
Your home may be repossessed if you do not keep up with your mortgage repayments.
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