Steel Framed House Mortgage

What is a steel frame property and can you get a mortgage on a steel frame house in the UK?

The technical definition of a steel frame property is a property that uses steel frame as its structural support. So, instead of timber or bricks it uses a steel frame instead. 

And yes, you can get a mortgage on these types of properties. They are classed as ‘non-standard construction’. They’re not your traditional brick building with a tile roof that you see with the vast majority of houses. Because of that, there is potential that you may need a specialist mortgage to purchase one.

What are the different types of steel framed houses?

I’m no expert in steel framed houses and how they’re all constructed – but I know how to mortgage them. There are a lot of different types of steel framed houses and a few different builders such as Wimpey, Trusteel, Telford, Arrowheads and lots of others. 

There are also slightly different types of construction methods, from wall bearing to skeleton framing to long-span framing. There are a lot of different steel frame properties out there. 

It’s really important that when you’re looking at one to identify when and how it was built and who manufactured that steel frame. Some lenders will have an acceptable list and some will have a non-acceptable list. So whatever the construction, we really need to understand how it was built.

Why are some lenders reluctant to offer mortgages for these properties? 

I live in the middle of the countryside where a lot of steel framed houses were built for the military or for rehousing after World War II.

They were designed to be built quickly but not to have long lifespans. Those properties have come into private ownership and are still going. Often the construction isn’t quite up to the standards and qualities that a lender would expect, and that’s why sometimes it can be tricky to get a mortgage. 

On the flip side, there are also a lot of new-build steel framed properties. We’ve all seen them on Grand Designs, where those buildings are absolutely built to be long-lasting. Sometimes lenders get a bit nervous around these, depending on the type of construction. 

Do many lenders offer a mortgage for a house with a steel frame?

There are multiple lenders. I have done lots of steel frame mortgages – where I live it’s quite a common construction type. Where I can really help somebody who’s trying to buy a steel framed house – or build one – is by talking to all the different lenders. 

I work with 95 different lenders and so I can see who will mortgage that property – we do all the research at the very beginning. Then, when you actually come to apply for that mortgage it’s likely to go through. The valuer just needs to agree to lend on that property.

What are the lending criteria for a steel framed property? What can affect a mortgage lender’s decision on a steel framed house?

Some lenders will absolutely lend on these properties with no issues whatsoever. Other lenders will not be comfortable with them. They have past history or evidence that means they won’t lend on those properties. 

That’s why it’s really important at the outset, when you see that house, to understand how it was built and when. Sometimes it’s hard to know whether a property is steel framed, but the estate agent should tell you. 

Santander has a clear list of the types of property they will and won’t accept. Halifax is very open – it will depend on the property itself. These are examples of two very different approaches. Ultimately, the valuer who visits the property will have the final say. We may need to go to have a look elsewhere depending on what comes back in that report.

How much deposit will I need for a steel framed house? Do I need a higher deposit for a steel frame home?

As we speak in December 2023 you require a minimum of a 5% deposit to get a mortgage. If you hit those criteria, a product is potentially available to you. 

If you’ve got the deposit, you meet the criteria for the product and your property is acceptable to the lender there’s no difference in the deposit for you or anybody buying a traditional build house. 

It’s always beneficial to put it in more deposit if you can, because you will borrow less money, pay less interest and will pay the mortgage back quicker. But overall, deposit and property criteria are two separate issues that we would talk through as part of the mortgage application.

If you’ve got a high deposit it might help swing a lender in your favour, but more generally it will just reduce the interest rate you pay.

How much can I borrow on a steel framed house?

It will always depend on your individual circumstances. It will be affected by how much deposit you are putting down, your age, your income and how long you want to pay the mortgage back over. Your monthly budget and commitments come into it as well. 

It’s such a wide-ranging question. It’s not as simple as just five times your income. It’s one of the first things that clients want to understand, so we will sit down and talk through your budget and what you’re looking to do. 

Then, when we say you can go ahead and buy that property, you really know that it’s affordable and you’re going to get accepted for that mortgage.

What are the pros and cons with buying a steel frame home? What other things should I consider when buying a house with non-standard construction?

I’m no expert in steel-framed houses, but some of the positive things you hear about them are about durability and maintenance. Steel framed properties are potentially cheaper to buy than standard construction properties because of the challenges with mortgaging them. 

The downside, when you do your research into them, is around insulation and energy efficiency. It’s something to have a good look at before you buy. One thing I always say to anybody looking to buy a steel framed house is to make sure you have a full building survey done, so you really understand what you’re buying.

A full survey will allow you to understand the property and any structural issues with it, if there’s going to be any issues moving forward or any maintenance needed. It may cost you a bit of money upfront, but it’s well worth doing so you know what you’re buying and there are no surprises later on down the line.