Owning a listed property can be a dream come true for many homeowners, with their historical charm, architectural significance, and unique character. However, one common question that arises for prospective buyers is whether they can obtain a mortgage on a listed property. In this article, we’ll explore the answer to this question, understand the process involved, and discuss the considerations that come with financing this type of property purchase.
Understanding Listed Properties
Listed properties are buildings or structures that have been recognised and protected for their special architectural, historical, or cultural significance.
In England and Wales, listed buildings are classified into three categories: Grade I, Grade II*, and Grade II, with Grade I being the highest level of protection.
| Grade | What’s included in this category? |
| Grade I | Buildings of historic interest. This includes castles, forts and palaces. Examples include: Buckingham Palace, the Tower of London, and Bamburgh Castle. |
| Grade II* | Buildings of particular importance that may extend beyond local interest. Examples include the Coliseum Theatre in London and the Manchester Town Hall Extension. |
| Grade II | Most listed buildings in England and Wales – 92% of them, in fact – fall into the Grade II category. This makes it the most likely category for a homeowner. |
Can You Get a Mortgage on a Listed Property?
The short answer is yes; it is possible to get a mortgage on a listed property. However, securing financing for a listed property purchase comes with its own set of challenges and considerations compared to non-listed properties. We’re outlining these below.
Process and Considerations
Finding a Lender: Is it harder to get a mortgage on a listed property?
Not all lenders offer mortgages for listed properties, as they are considered a higher risk investment.
Specialist lenders or those with experience in heritage properties are more likely to consider financing a listed property purchase. A specialist mortgage broker could make the process of finding a suitable mortgage much easier – with their help, you can save time locating and comparing lenders yourself.
Some of the mortgage terms may be more restrictive than those for non-listed properties. For instance, you may not be eligible for government mortgage schemes, or you may be restricted on how much of the property value you can borrow. While it’s not impossible to find 95% mortgages, you are more likely to see lower loan-to-value rates of 75% – 80%. You will also be expected to pay a higher deposit amount.
Valuation and Survey
Lenders will typically require a specialist valuation and survey of the listed property to assess its condition, historical significance, and any potential repair or conservation issues. It’s crucial that checks for any unauthorised work by previous occupants are carried out; otherwise, you could become liable for criminal damage. The law sees the owner of the property as liable for the damage, so extra caution should be taken. The valuation may take longer and be more detailed compared to non-listed properties.
Conservation Restrictions
Listed properties are subject to strict conservation regulations to preserve their historical and architectural features. Lenders may require additional documentation or assurances regarding compliance with conservation requirements before approving a mortgage.
Insurance Requirements
Listed properties may require specialised insurance coverage due to their unique characteristics and potential risks. Lenders may stipulate specific insurance requirements as a condition of the mortgage agreement.
Cost of Repairs and Maintenance
Listed properties often require ongoing maintenance and periodic repairs to preserve their heritage value. Buyers should factor in the cost of repairs and maintenance when budgeting for a listed property purchase and ensure they have the financial means to cover these expenses.
Legal Considerations
Buyers should seek legal advice to understand the legal implications of owning a listed property, including any restrictions on alterations, renovations, or extensions. It’s essential to ensure compliance with planning and conservation regulations to avoid potential legal issues in the future.
Historic England or Local Authority Consultation
In some cases, lenders may require consultation with Historic England or the local planning authority to obtain the necessary approvals or permissions for alterations or renovations.
While obtaining a mortgage on a listed property may involve additional complexities and considerations compared to non-listed properties, it is certainly possible with careful planning, research, and assistance from specialist lenders and professionals.
Prospective buyers should thoroughly assess the financial, legal, and regulatory aspects of owning a listed property and seek expert advice to navigate the process successfully. With the right approach and due diligence, owning a listed property can be a rewarding and fulfilling investment for homeowners who appreciate heritage and history.
