Getting a Mortgage on a Steel Framed House

If you’re planning to buy a steel framed house with a mortgage, the process can be challenging since most lenders class it as ‘non-standard construction’. Here we’ll cover why it’s harder to get a mortgage on these properties - including homes with steel beams or extensions - and the best approach to take.

Can you get a mortgage on a steel framed house?

Yes, getting a mortgage for a steel frame house is usually still possible, but you’ll likely have a smaller pool of lenders to choose from. Providing a mortgage for this type of property can involve more risk for lenders, so not all UK lenders would be willing to offer a home loan.

Why it’s harder to get a mortgage

Here are the key reasons why it’s more difficult to get a mortgage on a steel framed house:

• Structural risks: The steel used can be susceptible to corrosion, especially when exposed to moisture. Steel framed houses can also face rusting issues, and without proper insulation and maintenance, the steel construction can weaken over time. 
• Resale value: Some lenders will be concerned about the resale value of steel framed houses, especially in case of repossession. Typically, there’s a smaller resale market for non-standard construction properties, limiting the number of potential buyers. This is partly why certain lenders are stricter with eligibility criteria compared to standard constructions.
• Insurance difficulties: Another key issue is that you may need a specialist insurance policy for a steel frame house in case of any structural problems now or in future. These policies can be harder to find or come with higher premiums that could even have a knock-on effect on your mortgage affordability. 

British Iron and Steel Federation (BISF) home mortgages

A common variety of steel framed homes are the British Iron and Steel Federation (BISF) houses. This type of construction was particularly popular across the UK after World War Two. It was a national initiative to quickly build homes and coordinate steel production.

Sadly it’s difficult today to get a mortgage for a BISF house. Often, you’ll need a larger deposit. This is due to concerns with the structural integrity and materials used at the time. It’s often best to get expert advice if you’re considering purchasing a BISF steel frame home to ensure you still get competitive rates and terms.  

Lending criteria for these properties

Here are some of the key factors that will be looked at when it comes to eligibility criteria for mortgages on steel frame houses:

• Property age: Newer steel framed houses built to modern standards are often considered more favourably. Whereas, older steel frame constructions, like the BISF houses built quickly after World War Two, can be harder to get a mortgage on. 
• House location: Lenders will also look at where the house is situated, and may be hesitant to offer a mortgage if it’s in an area where dampness, flooding or other weather-related issues could lead to a greater chance of rust or moisture problems. 
• Type of construction: The exact method of steel construction and additional materials used for things like cladding can all play a factor. For example, whether it’s a property with steel beams - or the house is only partially built using steel - can influence a lender’s decision. 
• Survey results: Most lenders require a specialist survey is carried by a structural engineer (or building surveyor) to check the condition of the steel. The results will help inform whether they’ll be willing to offer a mortgage or impose stricter terms/deposit requirements. 
• Deposit and LTV: Certain lenders will have higher deposit requirements if you want a mortgage for a steel framed house. A higher deposit will mean a lower loan-to-value (LTV) ratio; and it’s not unheard of for mainstream lenders to have 50% LTV limits for steel frame houses, which would mean needing a 50% deposit.

What if only part of the property uses steel?

For some properties, the entire construction isn’t built using steel, but steel might be used for extensions, beams, or outbuildings. Here’s how partial use of steel can affect a mortgage:

• Steel extension: Houses with steel frame extensions or partial renovations can face fewer mortgage restrictions compared to full steel frame properties. However, it still depends on a host of factors like the type of construction and other materials used. Lenders will still usually want a structural survey to check any steel extensions.
• Steel outbuilding: If the property has something like a steel-framed garage, shed, or other outbuilding - this may not affect your mortgage eligibility as these structures usually don’t have much of an impact on a property’s overall value and less chance of hindering a sale. However, treatment can vary between lenders. 
• Steel beams: If the house uses structural steel beams, this can actually be a positive if the rest of the property uses standard construction methods. However, this isn’t always the case and some lenders won’t be willing to consider the possible benefits of steel beams. 

How to get a mortgage on a steel framed house

Here are some straightforward steps to follow if you want to get the best deal for a steel frame house mortgage:

1. Gather your details: Along with your personal documents (proof of address, identification, and 3 months of payslips and bank statements), you should get as much information as you can relating to the steel frame house you want to buy. This will ideally include a survey with the construction material specifics and the property’s age.

2. Get expert advice: It’s hard to get a mortgage for a steel frame construction without advice from an expert mortgage broker. Getting specialist advice is worthwhile because it will prevent unnecessary rejections or unwanted marks on your credit file. It will also ensure you get the best terms and rates for a steel frame house mortgage.

3. Apply for a mortgage: Once your broker has checked over your personal details (including a review of your credit reports), and assessed the construction details of the steel framed house, they’ll introduce you to the right lender for your circumstances. Your broker will also help walk you through the application process from start to finish.

If you want to speak to one of our experienced brokers who specialises in mortgages for steel frame houses, you can get started here with a free, no obligation chat:

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Available mortgage lenders

Some banks and major lenders are open to offering mortgages on steel frame houses. However, they can be extremely strict with their eligibility criteria, with no flexibility or room for manoeuvre which can lead to difficulties. 

For example, here are some of the rules for banks and high street lenders who might consider a mortgage on a steel frame house:

• Halifax: Will consider steel frame houses on a case-by-case basis, but Halifax will decline a mortgage if it’s a metal framed building where the cavity, between the steel frame and cladding, has been retrospectively filled with insulation. 
• Accord Mortgages: If any part of the property is built using steel from 1980 or older, Accord Mortgages requires you to get an Intrusive Structural Report (in accordance with BRE113) before it will consider offering a mortgage for a steel frame house.
• Coventry Building Society: Although Coventry Building Society will consider steel framed properties built after 1st January 1990, there are additional criteria. Cladding must be over 67% brick or stone (at all levels). Outer cladding excluded includes concrete panels, timber, plastic, metal sheets, or tiles.

If you want to see the full range of lenders who can provide the most flexibility for your steel frame house mortgage, while still offering the best rates, it’s well worth getting one of our advisers to introduce you to a suitable specialist lender.

Why choose Teito for a mortgage on a steel frame house

Our brokers specialise in securing mortgages for challenging situations, including steel framed houses. To get a mortgage for a house with a steel frame, you’ll often need to approach niche lenders who can be more flexible.

Because our brokers specialise in non-standard construction properties like steel frame buildings, they can help you arrange any necessary surveys, evaluate your finances, and introduce you to the best lender for your circumstances.

Here are some more of the reasons people choose us when getting a mortgage for a steel frame house:

• Our brokers specialise in all types of steel construction 
• We can introduce you to niche lenders with great rates
• Your first chat is free with no obligation to proceed
• We are 5-star rated on leading review sites

Ready to take advantage of a free, no-obligation chat with a broker who specialises in steel frame house mortgages? Get started here.