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PRC and Non-traditional construction

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This is a very loose term, and covers a wide variety of building styles, some of which are well-established and unlikely to cause lenders to seek additional information. However, some kinds of non-traditional construction (some types of PRC reinforced concrete, for example) have proved problematic, sometimes affecting the structural integrity of buildings.
Lenders will have different policies about which types of non-traditional construction they see as suitable for mortgage purposes. In addition, they will often take account of other factors that might affect the future marketability of the property when deciding whether to lend on a specific property of PRC and non-traditional construction.

If you want to buy a property of non-traditional construction, it is sensible to use a PRC Mortgage Adviser who will know the usual lending policy of any lender and can often help you with this before making an application on your behalf. You should also be prepared for the lender to want additional information including, potentially, specialist reports on any unusual property type.

Issues affecting lending decisions

When lenders receive a mortgage application from someone who wants to borrow, they take account of the borrower’s financial circumstances and also the condition of the property.

A mortgage is a combination of the borrower’s “personal covenant” (their promise to repay), and the “security” of the property (so if the borrower does not repay, the lender can fall back on the value of the property and require it to be sold to repay the money due).

So, it’s not surprising that lenders take a close interest in the property itself, relying on information from PRC Mortgage Advisers, Valuers and Conveyancers to decide whether it offers suitable underlying security for the loan.

Most properties are mortgageable, even if there is a specific factor that may affect a lender’s assessment of risk. If lenders believe that a property would be harder to sell than other similar properties because of a specific factor affecting it, this will affect the lender’s assessment of risk, and may be a factor affecting the decision on whether and how much to lend. Lenders are likely to have specific requirements on the following aspects and others:

• Properties of non-traditional construction
• Leasehold properties with short leases
• Properties liable for unknown future costs
• Properties subject to unusual leases (such as solar panel leases)
• Properties containing hazardous materials (such as asbestos)
• Properties close to mineshafts
• Properties where invasive plants (such as Japanese knotweed) are present or close by

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