You’ve just discovered that the house you want to buy is an “Airey house”. You might be wondering how this is going to affect your mortgage application.
So, can you get a mortgage on an Airey house? Or should you walk away?
Generally, you will not be able to get a mortgage on an Airey house unless it has been repaired to the required construction standard recognised by banks and building societies. Even then, many mortgage lenders will be hesitant to lend because of the additional risks associated with non-standard construction homes.
In this article, we uncover why it is so difficult to get a mortgage on an Airey house. We also look at the importance of obtaining a PRC Certificate from the seller.
Finally, we will give you our seven top tips to improve your chances of getting a mortgage on an Airey house.
Mortgage lenders willing to lend on Airey houses do exist. The trick is knowing where to find them…
We can also help if you're unsure about the best way to sell an Airey home. Our free quiz will help guide you in the right direction if you're looking to sell:
1. Why is it difficult to get a mortgage on an Airey house?
An Airey house is a type of prefabricated house built in Great Britain in the aftermath of World War II. They were one of the many types of houses introduced by the government to address the post-war housing shortage.
Airey houses are made from precast concrete columns, meaning that they are of non-standard construction.
Many mortgage lenders are hesitant to lend on non-standard construction homes for a number of reasons. Let’s take a look at some of those reasons in more detail below…
1.1 Non-standard properties are considered higher risk
Mortgage lenders often categorise houses as “standard” or “non-standard” construction to classify risk. Generally speaking, non-standard construction properties are considered higher risk. This makes them trickier to finance.
1.2 Airey houses are classified as defective
To make matters worse, Airey houses were classified as “defective” in the ‘80s following a review of non-standard properties.
Generally, mortgage lenders will not lend on “defective” homes, unless they are provided with evidence (in the form of a PRC Certificate). This confirms that structural repairs have been carried out in accordance with an approved PRC licence.
1.3 The adjoining home might be ruining your mortgage chances
Even if the home you want to buy has been repaired to a PRC-approved standard, you may still struggle to obtain a mortgage from some lenders if the adjoining Airey house has not been repaired to the same standards.
Not all lenders will be this risk averse. However, it’s worth asking the question before you submit your application if you know the adjoining house has not been repaired. You don’t want to be left with a rejected offer and a knock-on dent to your credit score after all.
1.4 The saleability of Airey homes
Lenders always have an eye on the saleability of a property and the resale market. If the borrower defaults on their mortgage repayments, the lender will look to resell the property to get their money back. Airey houses can be harder to sell, and some lenders might worry they’ll struggle to recoup their losses if forced to repossess the property.
1.5 Changing criteria for lenders
Another factor that makes getting a mortgage on an Airey house so difficult is lender criteria isn’t fixed.
Lender criteria changes depending on the economic landscape and the housing market.
Over my 15 years in the industry, I’ve experienced first-hand the changes in lenders’ attitudes towards perceived risks.
Just because an Airey house is mortgageable now, it doesn’t mean the same house will be in the future. Likewise, the seller may have managed to get a mortgage in the past. But you may now find yourself struggling to find a lender willing to lend on that same property.
1.6 PRC Certificates
As I said above, it’s highly unlikely that a mortgage lender will approve an application without a PRC Certificate for the property.
But what is a PRC Certificate? And what do you do if the seller has lost the original PRC Certificate?
We cover all of this, and more, in the next section…
2. What is a PRC Certificate?
A PRC Certificate is a certificate that legally proves that the pre-cast reinforced concrete (PRC) property in question has been brought up to the required construction standard recognised by banks and building societies for the purpose of mortgage lending.
The PRC Certificate is issued once the fully licensed structural repairs have been completed, inspected, and signed off by a Structural Engineer.
It is important to obtain a certified copy of the original PRC Certificate from the seller as soon as possible for two reasons:
- It will give you peace of mind that the proper repairs have been carried out, and
- It will enable you to apply for a mortgage as you can provide legal evidence of the repair to the bank or building society.
2.1 What if the PRC Certificate is missing or lost?
Problems arise when the seller is unable to provide a copy of the PRC Certificate. This either means that they have lost the original certificate, or one was never issued in the first place.
Without a PRC Certificate, it is highly unlikely that you’ll be able to obtain a mortgage on an Airey house.
Lost PRC Certificate
If the seller has genuinely lost their PRC Certificate, the property can be re-certified.
If this happens, make sure to double check what investigations were carried out to ascertain the standard of the repair. You want to make sure that the seller followed the correct procedures.
PRC Certificate never issued
Where repairs have been carried out, but no certificate issued, an intrusive inspection will need to take place. The inspection should establish the level and standard of repairs undertaken.
The inspection should be carried out by a Structural Engineer. They will either sign off the works and issue a PRC Certificate or provide a report. The report will detail the additional works that are needed to bring the property up to PRC repair standards.
So, it’s fair to say that PRC Certificates are a big factor when it comes to securing a mortgage on an Airey house.
Let’s look at my top tips for improving your chances of securing that all important mortgage…
3. My top tips for improving your chances of getting a mortgage on an Airey house
The good news is there are things you can do to improve your chances of securing a mortgage on an Airey house.
Here are my seven top tips for securing a mortgage on an Airey house:
- Be upfront and honest from the outset. You should always be transparent about the property type with the lender from the outset. The discovery that the house is of non-standard construction later down the line can cost you both time and money. It may ultimately cause the house sale to fall through.
- Speak to a mortgage broker. If you are struggling to find a lender, I would recommend that you speak with a mortgage broker. They will know the banks and building societies who lend on non-standard properties. The broker will be able to recommend the lenders who are most likely to approve your application.
- Ask the seller for a copy of the PRC Certificate. The PRC Certificate proves that the property has been brought up to the required construction standard. Make sure to ask the seller for a certified copy of the original certificate early in the process. Your lender will need to see this before approving your application.
- Speak to local surveyors. All mortgage lenders will require a survey to be carried out on a residential property before they confirm or reject your mortgage offer. Try and speak with a local surveyor who has experience working with lenders on Airey houses in the area. They should hopefully be able to give you a better idea of how lenders view Airey homes, and if they lend at all.
- Lower your loan-to-value (LTV) ratio. Mortgage lenders view Airey houses as greater risk because they are non-standard construction. A way to reduce the perceived risk for the lender is by increasing the deposit you put down on the property. This can increase your chances of securing the mortgage.
- Ask the seller for recommendations. It’s worth speaking to the seller to see if they (or their Airey house neighbours) have any recommendations. Keep in mind though that a lender’s criteria can change. The seller might have been able to get a mortgage with a certain bank a few years ago. This doesn’t automatically mean that bank is still willing to offer a mortgage on an Airey house now.
- Don’t always rely on your estate agent’s word. Keep in mind that a lot of agents won’t have experience selling Airey houses. I’ve sold properties where agents have put buyers off by saying the house is unmortgageable, when it wasn’t. It’s always worth getting a second opinion from a mortgage broker before you walk away from your dream home.
Even if you follow all of my top tips, you may still struggle to get a mortgage on an Airey house.
Remember that there are other factors that affect your ability to get a mortgage, not just the type of construction. Lenders will also consider things like your credit history, employment status and existing debt.
Q1. How much does it cost to brick up an Airey house?
“Bricking up” an Airey house will only improve the overall look of the property. It will not be sufficient to satisfy mortgage lenders’ criteria. Any structural repairs must also deal with the internal load bearing columns and be approved by a PRC Structural Engineer.
The average cost of a full-scale Airey house repair is in the region of £60,000 - £80,000, according to Roy Gibbons from PRC Homes. The works take on average around 10-12 weeks to complete, weather dependent.
Q2. What is the best way to sell an Airey house?
The best way to sell an Airey house will largely depend on whether PRC repairs have been carried out to an approved standard. Unrepaired Airey houses are best sold by auction, as you’ll have an audience of cash buyers and developers. If repaired, your best option is to sell with a local agent who has experience selling this property type.
If you've got an Airey house to sell, use the free quiz I've designed to help guide you in the right direction:
By Matthew Cooper, Co-Founder of Home Selling Expert