Mortgages for Steel Framed Houses: How to Secure Finance Quickly

Mortgages for Steel Frame Homes: Everything You Need to Know​

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1. Understanding Steel-Framed Houses

2. Challenges of Getting a Mortgage on a Steel-Framed House

3. How to Improve Your Chances of Mortgage Approval

4. Valuation and Surveys for Steel-Framed Homes

5. How a Specialist Mortgage Broker Can Help

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1. Understanding Steel-Framed Houses

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Steel-framed houses are built around a skeleton of steel beams and columns, as opposed to the brick-and-block structure of a typical UK home. In this type of construction, the steel frame supports the floors, walls, and roof, while external materials - such as render, metal cladding, or timber, cover the framework. From the outside, these homes can sometimes look very similar to brick houses, which is why you might only discover a property is steel-framed after a more detailed survey.

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These homes became prominent in Britain, particularly after World War II, when there was a huge demand for fast, cost-effective housing. Many different systems emerged, some using only steel frames, others combining steel with concrete or timber elements. One of the most famous examples is the British Iron and Steel Federation (BISF) house, constructed in large numbers across the country to address post-war housing shortages. A range of additional designs also appeared, Trusteel, Atholl steel, and others - leading to a diverse catalogue of steel-built properties still on the market today.

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Because these properties don’t use the same materials or building methods as a traditional masonry house, they’re commonly referred to as “non-standard construction.” This can prompt extra caution from mortgage lenders. Over the decades, certain steel-framed systems (especially older ones) gained a reputation for possible corrosion, poor insulation, or difficulties obtaining insurance, all of which can complicate financing. However, it’s vital to distinguish between genuine structural concerns and outdated misconceptions. Many steel-framed houses have been properly maintained, upgraded, and continue to offer sturdy, comfortable living spaces.

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A misconception that still lingers is that most steel-framed houses were only ever intended to be temporary. In truth, many were built to be permanent dwellings, with an expected lifespan on par with brick homes, provided they receive appropriate upkeep. Like any house, a steel-framed property can suffer wear and tear, but properly maintained steel beams can last for decades. Another misconception is that these properties are uniformly labelled as “defective,” which is not the case. A specific set of concrete-based non-standard houses were officially designated defective in past legislation, but steel frames never fell under the same government categorisation. That said, because steel-framed homes are grouped into the wider bracket of non-standard construction, you’ll often find fewer lenders willing to finance them unless additional assurances are provided.

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Most genuine issues revolve around corrosion (if moisture penetrates the steel), inadequate insulation in older models, or the presence of asbestos components in original post-war structures. Corrosion can be prevented by ensuring the house remains weatherproof and that any protective coatings on the steel frame are maintained. Asbestos, if discovered in elements such as roofing or insulation, typically needs professional handling or removal, but that doesn’t necessarily mean a mortgage is impossible. It just requires an added level of due diligence.

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If you’re interested in purchasing a steel-framed house, it’s essential to understand this background. While you might find a desirable home at a price below an equivalent brick-built property, you’ll likely face a more complex mortgage journey. This guide clarifies those complexities and shows you how to increase your chances of success.

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2. Challenges of Getting a Mortgage on a Steel-Framed House

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Steel-framed houses are typically labelled non-standard, which raises a host of concerns for mortgage lenders. The main challenges stem from structural risk, resale uncertainty, and market perceptions.

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1. Higher-Risk Classification
Lenders evaluate properties as either standard (e.g., traditional brick or stone) or non-standard (e.g., steel, timber, thatch). Non-standard constructions represent a smaller slice of the housing market and often come with unknown long-term performance. This leads to concerns about structural robustness and future resale, making many lenders cautious. If a property type is deemed higher risk, lenders sometimes respond by restricting the maximum loan-to-value (LTV) ratio or charging slightly higher interest rates.

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2. Structural Durability Concerns
Although many steel-framed houses remain in good condition, a few post-war systems did develop corrosion issues. If water seeps into the steel frame through poor cladding or roofing, rust can form over decades, weakening the structural integrity. Lenders naturally worry about inheriting these risks. They don’t want to offer a large mortgage on a house that might later require expensive, specialised repairs. A thorough survey or structural engineer’s report can help ease these concerns if it confirms the steel frame is sound.

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3. Limited Mortgage Options
Some mainstream lenders have blanket exclusions on certain non-standard constructions, including steel-frame. Even those open to lending may require larger deposits. For instance, they might only agree to 75% or 80% LTV for a steel-framed property, instead of the 90% or 95% they’d allow for a standard home. This means you, as the buyer, might need a bigger deposit. Additionally, you could face stricter underwriting and more questions about the property’s condition, which can draw out the application process.

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4. Perceived Market Value and Resale
A steel-framed house might sell for less than a comparable brick house in the same street, largely due to market perception. Buyers can be wary of non-standard construction, so these homes sometimes sit on the market longer. Lenders know this, and it can impact their view of the property as adequate security for a loan. They question whether they can resell easily if they had to repossess, and any perceived risk may influence mortgage decisions. While this can be advantageous when you’re buying (since the house may be cheaper), it also means you should be realistic about future appreciation and ease of resale.

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5. Insurance Complications
Obtaining buildings insurance on a steel-framed house isn’t impossible, but it can be trickier. Insurers often apply more rigorous criteria or higher premiums to non-standard properties. If the building is older and in original condition, some insurers might refuse outright or require specialist cover. Since lenders insist on adequate buildings insurance as a condition of the mortgage, a refusal from insurers could kill a deal before it starts. Furthermore, if the insurance premium is especially high, it might affect the lender’s affordability calculations.

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3. How to Improve Your Chances of Mortgage Approval

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Navigating the mortgage market for a steel-framed house may be more challenging, but it’s far from impossible. By taking these proactive measures, you can substantially increase your odds of securing finance.

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a) Research the Construction Type and Condition
Before committing to a purchase, identify the exact type of steel-framed house you’re buying (BISF, Trusteel, or another) and understand its known quirks. Check if it has been modified over the years, for instance, adding external cladding or replacing the roof. Knowing the home’s history lets you address lenders’ concerns more convincingly. Look for any signs of damage or corrosion, and learn if previous repairs or improvements were properly documented.

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b) Obtain a Full Structural Survey
A basic mortgage valuation usually won’t dig into the potential pitfalls of a steel-framed property. A full structural survey (often called a Level 3 survey) or an inspection by a structural engineer is one of the most powerful steps you can take. This report can uncover hidden corrosion or highlight specific work needed to maintain the structural frame. Many lenders will demand such a thorough review before they approve a loan. By having it done early, you can demonstrate the property’s stability or negotiate repairs with the seller if issues are found.

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c) Address Repairs and Upgrades
If the survey or engineer’s report flags any problems, like roof leaks, asbestos, or rust in the steel, make a plan to deal with them. You may request the seller to complete essential fixes pre-purchase or negotiate a reduced price to cover the cost of your own repairs after completion. Having a clearly documented plan or proof that the repairs can (and will) be done often reassures lenders. Modernising areas like roofing, insulation, and cladding not only helps secure a mortgage but can also boost resale value and comfort in the longer term.

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d) Prepare a Larger Deposit
Because many lenders cap the LTV on steel-framed houses, you might need at least 10% to 20% down. If you can afford a more substantial deposit, such as 25% or 30%, it opens doors to more lenders and better rates. Having a lower LTV also signals you’re sharing more risk, which can make lenders more amenable.

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e) Target Lenders and Products Strategically
Rather than applying randomly, focus on the lenders that are known to consider non-standard construction. Doing so prevents multiple rejections from the wrong institutions. Each rejected application can harm your credit score, so it’s important to be strategic. Before applying, try to confirm (via their lending criteria, or through a broker) that they accept steel-frame properties. Having a structural survey in hand and a clear explanation of the house’s condition can strengthen your application package.

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f) Maintain a Strong Personal Profile
Your personal financial situation still matters immensely: credit history, income stability, debt levels, and other standard checks all come into play. If you’re dealing with a non-standard property, you don’t want additional red flags like missed payments or high unsecured debts. The more robust your personal finances, the easier it is to persuade a lender to consider the property itself.

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g) Seek Specialist Mortgage Advice
An experienced mortgage broker can be the single biggest factor in success. They already know which lenders are open to steel-framed houses and what documents underwriters typically demand. They can also package your application carefully, highlighting your strengths and pre-empting any concerns, which can be a game-changer when dealing with a risk-averse market.

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Following these steps sets you up for a smoother path through the mortgage application. Many people successfully finance steel-framed homes every year, and those who do usually share a common factor: they’re informed and prepared. By taking action early, especially with surveys and potential repairs, you can demonstrate to lenders that, despite the non-standard label, your chosen property is a solid security for a mortgage.

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4. Valuation and Surveys for Steel-Framed Homes

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Valuations and surveys can make or break a mortgage on a non-standard property. Here’s how the process typically unfolds and what you can do to navigate it effectively.

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Lender Valuations vs. Private Surveys
Any mortgage lender will at least want a standard valuation for the property. For steel-framed houses, the valuer is often asked to comment on the construction, condition, and potential resale challenges. This basic valuation doesn’t involve a deep dive behind walls or under floors, so it may not detect issues with the frame if there are no visible external symptoms.

 

Consequently, some lenders will insist on a more detailed inspection by a qualified surveyor or structural engineer, especially if the house is older or has had minimal upgrades.

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As a buyer, you can either wait for the lender’s valuation or commission your own comprehensive survey up front. Doing the latter can save time if the lender is likely to request it anyway. A full structural survey can specifically address whether there is any corrosion to the steel skeleton, how well the external cladding is functioning, whether the roof is sound, and whether any further specialist inspections (such as an asbestos survey) are advisable.

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Key Areas of Focus

• Structural Soundness: Surveyors look for signs of movement, sagging, or cracking around walls that might indicate a failing frame. Corrosion can start at the base of steel columns or in areas where water has penetrated.

• Roof Condition: Many steel-framed houses originally had lightweight or asbestos-based roofing materials. Surveyors note any potential leaks or the presence of asbestos, which can have implications for mortgage lending and insurance.

• External Cladding and Insulation: If the home has been upgraded with external wall insulation or new cladding, the surveyor checks whether it’s been done to a suitable standard. Poorly fitted cladding can trap moisture.

• Marketability and Comparables: For valuation, the surveyor looks at comparable non-standard properties in the area to gauge an appropriate figure. Since steel-framed homes can attract lower offers, there’s a risk of “downvaluation.”

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Dealing with a Downvaluation
A common scenario is that the surveyor values the steel-framed house below the agreed purchase price. This is sometimes due to a perceived difficulty in reselling a non-standard property. If that happens, you could attempt to renegotiate with the seller to match the valuation, put more money down, or (less commonly) challenge the valuation if you have strong evidence it’s out of line with local sales. However, downvaluations aren’t unusual for properties classed as non-standard, and lenders tend to be conservative.

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Conditions or Retentions
In some situations, a lender might offer a mortgage in principle but insist on certain repairs being completed before releasing funds. This is known as a retention. For example, if a survey highlights corroded steel beams, the lender may set aside a portion of the loan until remedial work is completed and signed off by a structural engineer. Be ready for this possibility and have a plan in place—whether that’s negotiating with the seller to do the work or setting aside savings of your own for immediate repairs after completion.

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Reading the Report Thoroughly
If you have arranged a private survey, read the findings in full rather than just skimming for a thumbs-up or thumbs-down verdict. It might include detailed recommendations on ventilation, insulation improvements, or minor preventative measures to avoid future rust. These insights can help you maintain the property effectively once you own it.

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Overall, be prepared for the reality that valuations and surveys are more involved with steel-framed houses. You may have to pay more than the standard fee if a lender wants a specialist report. Nevertheless, it’s far better to identify and handle issues early than to discover them mid-application when you’re hoping for a quick completion.

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5. How a Specialist Mortgage Broker Can Help

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The journey to secure a mortgage on a steel-framed house can be smoother when you work with a specialist mortgage broker. As a professional mortgage broker ourselves, at Manor Mortgages Direct, we understand the intricacies of dealing with non-standard construction and have substantial experience helping clients navigate this market. Here’s why that matters:

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1. Expert Navigation of Lender Criteria
Many high-street banks either don’t lend on non-standard properties or impose strict conditions. A specialist broker closely tracks which lenders currently consider steel-framed homes, how they view each construction type, and what deposit or survey requirements they have. Rather than taking a trial-and-error approach, we can present your application directly to those most likely to say “yes,” saving you time and credit checks.

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2. Access to a Wider Range of Deals
Smaller, more niche lenders often work only through brokers, meaning you can’t just walk into a branch or request a product online. By partnering with a broker, you gain access to this broader pool of potential lenders, some of whom may offer more flexible terms for steel-framed homes.

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3. Tailored Advice and Packaging
When a property is unusual, the mortgage application typically requires careful presentation:

• You may need a thorough structural survey to show the frame is in good shape.

• You might need evidence of suitable buildings insurance.

• You could have to present details of repair or improvement works.
  A broker with non-standard experience knows which documents a lender will want and in what format. This early preparation often speeds up the underwriter’s review.

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4. Higher Success Rates
If you apply on your own to a random lender, there’s a risk of immediate rejection simply based on the house’s construction. Repeated rejections can damage your credit profile. In contrast, a broker who already knows the market will focus on lenders with a proven track record of accepting steel-framed houses. This increases the likelihood of an approval on your first or second try, rather than the fifth or sixth.

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5. Reassurance and Time Savings
The mortgage approval process can be nerve-racking, especially with a non-standard property. A broker is there to answer your questions in plain English, track your application’s progress, and communicate promptly with underwriters on your behalf. Rather than spending hours calling around or waiting on hold, you can rely on us to keep the process moving and keep you informed.

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By choosing a specialist broker, you sidestep much of the confusion and frustration that comes from the unique demands of financing steel-framed properties. With our experience at Manor Mortgages Direct, we can show you the most straightforward path to approval, help you compile the strongest possible application, and give you a clearer idea of the timeline and costs involved. This comprehensive approach can make all the difference in ensuring your dream of owning (or investing in) a steel-framed house becomes a reality.