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Uninhabitable Property Mortgages

Wondering if you can get a mortgage on an uninhabitable property? Check this informative guide as we discuss lending options, eligibility, application process, and more.
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An unfinished or uninhabitable property may seem like a bargain for an aspiring homeowner on a budget. 

But here’s the catch – lenders typically prefer financing properties that are in good condition and perhaps promise a high resale value. As such, getting a mortgage on an uninhabitable property is quite a Herculean task.

Unlike traditional mortgages, this type of mortgage is catered specifically to properties deemed uninhabitable in their current state due to structural deficiencies or other substantial issues. 

Not to forget, each lender has their own definition of “uninhabitable,” adding another layer of complexity to an already dicey situation.

However, securing uninhabitable property mortgages is not impossible. With an increasing number of buyers for properties with “potential,” there are specific lenders who may be willing to accept your mortgage application.

So, to understand the unique circumstances of uninhabitable property mortgages, read till the end… 

What Makes A Property Uninhabitable In The UK?

In the UK, a property is deemed uninhabitable if it lacks essential facilities required for basic living, as defined by the Housing Act of 1967

It specifies that a property is considered habitable if it possesses a fully operational bathroom and kitchen or cooking area. 

Conditions that may lead to a property being classified as uninhabitable include:

  • Property features non-standard roof (tin, flat, felt, thatched) or it needs a new roof due to damaged slate or tiles
  • Limited access to clean running water
  • Infestations of animals, insects, or plants
  • Inadequate electrical or plumbing systems
  • Insufficient weatherproofing or any other structural damage
  • Presence of hazardous materials, such as mould or asbestos
  • No functional kitchen or bathroom
  • Absence of a heating system
  • Exposure to harmful chemicals
  • Property is fire damaged 
  • Property fails to comply with building regulations or faces challenges related to solar panel ownership

It is important to understand that if properties bought for renovation are considered habitable at the point of purchase, they will not qualify for stamp duty refund. 

Hence, it is imperative to verify the condition of the property and the eligibility criteria for a stamp duty refund before completing a purchase.

Why Is It Difficult To Get A Mortgage On Uninhabitable Property?

Securing a mortgage on an uninhabitable property poses challenges as lenders usually favour financing properties in good, immediately occupiable condition. 

Uninhabitable structures often present structural issues, safety hazards, or code violations requiring resolution before being deemed safe for habitation.

Coming to mortgages, these financial tools use the property as collateral. Failure to meet mortgage payments grants lenders the right to repossess and sell the property to recover losses, a standard risk mitigation practice.

As such, lenders hesitate to finance such properties due to the reduced collateral value, potentially insufficient to cover the loan amount in case of default. But, fortunately, not all uninhabitable properties are categorically ineligible for mortgages. 

With plans for refurbishment, it is possible to secure a mortgage for such properties, making them suitable for habitation.

How To Get Uninhabitable Property Mortgages?

To secure a mortgage on an uninhabitable property, the initial step involves rendering it habitable by addressing issues that deter mortgage lenders from considering it as collateral. Here are some steps to get your started…

1. Identify The Issues

If your mortgage application has been rejected, seek feedback from the lender on why they deemed the property uninhabitable. It might be something that can be easily fixed, like a mild subsidence or damp. 

For properties yet to undergo valuation, consider obtaining a homebuyer’s report or a comprehensive structural survey to uncover potential issues and associated costs.

2. Assess The Feasibility Of Repairs

Following a thorough structural survey, you’ll have insights into the necessary work to make the property habitable. Thereafter, evaluate whether you can manage the project or if seeking an alternative property is a more viable option.

3. Explore Lending Options

If opting for repairs, consult a mortgage broker to explore lending options. 

4. Negotiate Repair With Seller

Depending on the scenario, you may even discuss with the seller the possibility of them undertaking the necessary repairs. Once completed, you can resubmit the mortgage application or initiate a new one, positioning the property as habitable and eligible for mortgage consideration.

How Can A Mortgage Broker Help?

When seeking a mortgage for an uninhabitable, or incomplete property, you can enhance your chances of securing a mortgage by contacting a specialised mortgage broker. 

Here’s how they can assist you in this complex mortgage application process-

1. Getting Information 

An experienced mortgage broker can help compile comprehensive information about the uninhabitable property you wish to purchase. With their expertise, you can pinpoint potential problems that lenders may scrutinise, significantly reducing the chances of rejection.  

2. Finding Out The Eligibility Criteria 

Thanks to the years of experience, mortgage brokers can offer guidance on the eligibility criteria that mortgage lenders seek for these property types. They can also help you collect additional documentary evidence required for a thorough application.

3. Identifying The Right Mortgage Lender

A specialised broker can connect you with suitable mortgage lenders with prior experience in dealing with uninhabitable structures. According to the lender, they can help prepare your application meticulously for submission. 

By proactively engaging with a specialist mortgage broker, you can navigate the complexities associated with mortgages for such properties. 

Which Lenders Offering Uninhabitable Property Mortgages?

When it comes to obtaining a mortgage for properties requiring renovation, your options may be restricted based on the condition of the property and the extent of renovation required. 

And while it’s not impossible, many mainstream lenders may shy away from uninhabitable property mortgages.

However, certain lenders are receptive to offering mortgages for partially renovated properties originally claimed non-habitable by a surveyor. Check them out below-

  • The Loughborough Building Society: Open to the possibility but offers specific mortgage renovation products, which may entail different terms and rates.
  • Earl Shilton Building Society: Considers mortgage applications, depending on the valuer’s positive comments, and may involve a self-build mortgage in case of remaining renovation work.
  • Newbury Building Society: Accepting applications with full plans, planning permission, and relevant consents already obtained.

Overall, lender rules may vary, depending on the present condition of the property. For a comprehensive understanding of your options, consulting with a mortgage broker is your best bet. 

Their guidance can help identify a suitable lender and align your plans with the most suitable mortgage solution.


1. What should you do if you’re also purchasing land?

If you want to purchase land along with an uninhabitable property, consider bridging loans. This form of short-term, interest-only financing offers swift access to funds, and the sale of the land can serve as your exit strategy. 

Moreover, the funds obtained through the loan can be utilised to address specific areas of the property. 

2. Can you get a mortgage on a house without a kitchen or bathroom?

Most lenders are unlikely to provide a mortgage for a property without an operational kitchen or bathroom facilities. In such cases too securing specialist financing like bridging loans is imperative. 

3. Can you get a mortgage on properties with asbestos?

Until the 1990s, asbestos was commonly used in UK properties. However, with more awareness regarding its health hazards, nowadays, its removal has become fairly easy and safe, if performed by an expert.  

Notably, mortgage lenders mandate an asbestos report from an accredited surveyor to assess the risk. If removal is recommended, the lender evaluates the surveyor’s findings before deciding on a mortgage offer.

That said, asbestos used on roofs is not as problematic if the house is in a good condition.

To Sum Up

Overall, uninhabitable property mortgages offer a unique opportunity for those looking to invest in properties with substantial renovation requirements. While navigating through the complex eligibility criteria and lender considerations, prospective buyers can take advantage of specialised mortgage brokers.

With careful planning, they can transform uninhabitable and unfinished structures into warm and welcoming houses while securing financial support.

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.

Mortgage & Protection Advisor | 03337892035

I am CeMAP (Certificate in Mortgage Advice and Practice) qualified mortgage adviser with a strong background in Finance. I specialise in providing expert advice on a range of mortgage products, including first-time buyers, remortgages, buy-to-let mortgages and bad credit mortgages.

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