What are Non-Standard Construction Properties and How to Identify Them?

When investing in property, understanding construction types is essential, especially in the UK, where homes come in various shapes, sizes, and, importantly, building methods. While most properties fall under the category of "standard construction", a significant number are classified as "non-standard."

In fact, there are around 1.5 million non-standard construction homes in the UK. These can often present unique opportunities but also challenges for investors. Therefore it’s important to understand how they can affect your property investing strategy and how you can leverage it to benefit you.

This article explores what non-standard construction properties are, how to identify them, and how they impact property investment, particularly when securing a mortgage.

Quick links: > What Is Non-Standard Construction? > Standard vs. Non-Standard Construction > Types of Non-Standard Construction Properties

> How to Identify a Non-Standard Construction Property

> Challenges for Investors > Non-Standard Construction Mortgages > Benefits and Risks of Investing in Non-Standard Construction > Should You Invest in Non-Standard Construction Properties? > FAQs

What Is Non-Standard Construction in the UK?

In the UK, a property is classified as non-standard construction if it is built using materials or methods outside of what is typically considered "standard." Standard construction homes usually consist of brick or stone walls with a slate or tiled roof. These homes are built using traditional methods that are widely accepted and easily insurable.

On the other hand, non-standard construction properties may feature unconventional materials such as timber frames, steel supports, concrete panels, or even thatched roofs. While these properties are often structurally sound, their construction methods can make them more challenging to finance, insure, and maintain.

For property investors, understanding the distinction between these two categories is crucial, as it directly impacts not only the purchase process but also long-term profitability.

Standard vs. Non-Standard Construction

The construction type of a property can affect its longevity, maintenance costs, insurance premiums, and mortgage options. Therefore, it’s important to understand the differences between standard and non-standard construction when assessing investment opportunities.

	Standard Construction	Non-Standard Construction
Materials Used	Brick, stone, slate or tiled roof	Timber, steel, thatched roof, concrete panels
Durability	High, with minimal ongoing maintenance	Varies; can require more frequent or specialized maintenance
Mortgage Availability	Easy to secure with multiple lenders and lower interest rates	Very limited, often requiring specialist lenders and higher deposits and interest rates
Insurance Availability	Readily insurable	More difficult to insure, often with higher premiums
Resale Value	High demand and easy resale	Potentially lower demand, with resale limited to niche markets
Popular Examples	Modern brick houses, Victorian terraces	Timber-framed cottages, post-WWII prefabricated homes

Types of Non-Standard Construction Properties

Understanding the types of non-standard construction homes can help you make informed investment decisions. Some of the most common non-standard construction types in the UK include:

Timber-Framed Houses

Timber-framed properties are lightweight and quick to build but can be more vulnerable to moisture and pests. They can require specialized maintenance and are often more difficult to insure.

Steel-Framed Buildings

Popular in the mid-20th century, steel-framed homes are durable but can suffer from corrosion over time, making them more costly to repair. Many lenders consider these properties risky.

Concrete Panel Houses

Many post-war homes were built using prefabricated concrete panels (e.g., Airey, Laing, and Wimpey No-Fines houses). These properties can be sturdy but may have structural issues that deter lenders and insurers.

Thatched Roof Cottages

Picturesque but high-maintenance, thatched roof cottages are commonly found in rural areas. The upkeep of these roofs is labor-intensive, and insurance premiums are usually higher due to fire risks.

Flat Roofs

Flat roofs are another example of a non-standard roof type. They are more common in modern or commercial buildings but are also found in some residential homes, particularly in mid-century properties. The problem with flat roofs is their tendency to suffer from drainage issues, leading to leaks and water damage. These maintenance risks make flat-roofed properties harder to finance, as many lenders and insurers view them as less durable than pitched roofs.

Prefabricated Homes (Prefabs)

Built quickly during housing shortages, especially post-WWII, these homes can be economical but are often seen as temporary solutions. They may have structural weaknesses, making financing more challenging.

Examples of non-standard construction houses:

How to Identify a Non-Standard Construction Property

Identifying a non-standard construction property may not always be straightforward. While some features, like a thatched roof, are obvious, others, like steel or timber framing, might not be immediately apparent. Here's how you can spot non-standard construction properties:

External Clues

The most obvious one is to look at the external clues: timber cladding, steel frames, flat roofs, or non-brick walls.

Survey Reports and Home Reports

A property survey can reveal what materials were used in the foundations, walls, and roof. If you are in doubt, you can commission a full structural survey to avoid any surprises.

For those investing in Scotland, you’re in luck as it’s a legal requirement for sellers to obtain a home report for their property before it goes on the market. This is then provided to potential buyers and highlights any property issues as well as construction type.

Consult a Professional and seek documentation

As property investors we often buy houses off market, directly from the vendors. In this case, it’s a good idea to speak with estate agents or look for documentation from similar properties in the area. 

Previous surveys, architectural plans, and renovation documents may indicate whether the property was built using non-standard methods. You can contact your Local Authority’s Building Control department to see if they have any records.

Real estate agents, surveyors and property experts who know the area can provide insights. This is particularly useful for identifying prefabricated homes or properties with less obvious construction methods.

Challenges of Non-Standard Construction Properties for Investors

Investing in non-standard construction properties comes with a set of challenges, particularly when it comes to securing a buy-to-let mortgage. As mentioned above, lenders often view these properties as higher risk due to their unconventional construction, which can have several consequences: 

• Limited Lender Options: Very few lenders are willing to finance non-standard construction homes

• Higher Deposits: Those willing to offer lending ask for a higher deposit (often 30%+) for non-standard properties

• Higher Interest Rates: Even if you secure a mortgage, expect to pay a higher interest rate, which can impact your cash flow and overall profitability

In general, non standard construction reduces your financing options and  sometimes you may not even be able to secure financing from any lender. However, you can use this as a negotiation tool when agreeing a price with the seller. Remember, they are facing the same challenges as you and very likely not able to secure a mortgage / lending on the property. 

Non-Standard Construction Mortgages: What You Need to Know

For investors seeking to finance a non-standard construction property, it's essential to work with a lender who specialises in this niche market. Standard mortgage providers often avoid these properties. 

Here are some tips on getting a non-standard construction mortgage: 

• Speak with a specialist lender who understands the nuances of non-standard construction and is willing to offer a tailored mortgage product

• Expect your loan-to-value (LTV) ratio to be lower, and prepare to put down a larger deposit than you would for a standard property

• Use a mortgage broker experienced in non-standard construction properties. They can help navigate the more complex application process and ensure you're getting the best possible deal

Benefits and Risks of Investing in Non-Standard Construction Properties

While non-standard construction properties present challenges, they also offer potential rewards for investors:

Benefits

Lower Purchase Price: Non-standard construction homes often come with a lower price tag, making them attractive for investors on a budget.

Less Competition: Fewer buyers are willing to take on the risks, which means there’s less competition for non-standard properties.

Unique Appeal: For investors targeting niche markets, such as rural or holiday lets, non-standard homes like timber-framed cottages or thatched roof houses may have a unique charm that attracts specific renters or buyers.

Risks

Maintenance Costs: Non-standard materials can require specialized (and often expensive) maintenance. For instance, timber-framed homes may need regular treatment to prevent wood rot, and thatched roofs require regular re-thatching.

Financing and Insurance Challenges: As discussed, securing a mortgage and insurance can be difficult. This adds complexity to the investment process and can affect your cash flow.

Resale Value: Some non-standard homes may be harder to sell, especially if mortgage options are limited for potential buyers.

Should You Invest in Non-Standard Construction Properties?

Investing in non-standard construction properties can be a profitable venture, especially if you’re able to secure them at a lower price and rent them out to a niche market.

However, it's crucial to weigh the risks, such as higher maintenance costs, limited mortgage options, and potential difficulties with resale. Working with a specialist lender, broker, and surveyor is key to ensuring that your investment is sound.

Non-Standard Construction Properties: FAQs

1. What does non standard construction mean?

Non-standard construction refers to properties built with unconventional materials like timber, steel, or concrete panels instead of brick or stone.

2. Can I get a mortgage for a non-standard construction property?

Yes, but you'll likely need a specialist lender, and the mortgage terms (deposit, interest rate) may be less favorable.

3. Are non-standard construction homes cheaper?

Yes, they tend to be more affordable to purchase, but the additional costs of maintenance, insurance, and financing can balance out the savings.

4. Is it worth investing in a non-standard property?

It depends on your investment goals. Non-standard properties can offer lower prices and less competition, but they come with higher risks and potential difficulties with financing and resale.