Case study: How do you get a mortgage on a 'Grand Designs' home?
At Jordan Lynch, we’ve arranged mortgages on a number of properties that have featured on Channel 4's BAFTA-winning Grand Designs programme. Whilst self-build mortgages are relatively common, the scale and unique nature of the properties that appear on Grand Designs often means that regular self-build mortgage lenders shy away from funding such projects.
Aside from the credit risk to the lender, one of the main issues is the surveyor finding it difficult to place an end value on the property. This is due to the lack of similar properties to compare it to. It’s not uncommon that they value the property lower than what it has cost to purchase the land and fund the build, and in some cases they refuse to value it altogether. When arranging mortgages on unique properties brokers must get creative as out of the 90 + lenders that offer mortgages there will be little more than a handful that will provide a mortgage on such a property.
Underwriters at mainstream lenders use algorithms to assess risk and make lending decisions, and they simply can’t cope with the perceived risks on such projects. Brokers must approach lenders that offer an old-school underwriting process with the human touch, which is only really offered by some of the smaller building societies and private banks these days. It’s also essential that the lender works with their appointed surveyor to establish a fair method for establishing a property value rather than the standard tick box instructions that surveyors receive from lenders on standard property purchases.
“We've had great success in arranging self- build mortgages on properties with an end value from as low as £350k through to £10 million! If you’re thinking of building your dream home, whether it makes it to the Grand Designs TV show or not, we can help you with the financing.”
Tim Lynch, Director
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Our friendly, dedicated team of advisors are on hand to help you with all of your mortgage needs. If you have a more complex lending scenario, we'll take time to understand your situation and map out the best way forward. Due to our ongoing relationships with a variety of lenders as well as our up-to-the-minute monitoring and industry analysis, we can provide the best solution for your needs right now as well as looking ahead to the future.
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