Damian Youell

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Mortgage on Listed Building

If you are considering getting a mortgage on an older property, it could be a listed building and arranging a mortgage loan for this type of building may not be as straightforward as a normal standard property.

Post Topics

What is a listed building?

Can you get a mortgage on a listed building?

Grade 2 Listed Building

Grade 2 Property for Buy-to-Let

Next steps




What is a listed building?

A property that is a listed building are usually considered of historical or architectural importance and will be put on a register on The National Heritage List for England (NHLE) to preserve the property for future generations. Anyone can nominate for a building to be listed but buildings that are not more than 30 years old are unlikely to be classified as a listed building as it hasn’t stood the test of time. Generally, properties built before 1700 and between 1700 and 1850 are likely to be considered listed buildings providing, they are close to their original conditions.

There are three different gradings for listed buildings, Grade I, II and III. Only 2.5% of listed buildings are Grade I, and properties in this category are considered to have significant national importance. Grade II buildings are considered important buildings of more than special interest, and only 5.8% of listed buildings are in Grade II. Grade III listed properties are more common, with 91.7% of listed buildings classed as Grade III. Therefore, it is more likely a borrower would be looking to get a mortgage loan on a Grade III listed building.



Can you get a mortgage on a listed building?

The good news is, it is possible to get a mortgage loan for a listed building, but it is more difficult when compared to a standard property as mortgages are secured loans and the loan is secure against the property. It provides lenders with security if, in the instance, they need to repossess the property and sell it. However, lenders are more cautious about listed buildings as finding a buyer for listed buildings can be more difficult as it is a limited market.

Listed properties are protected by law, and to preserve the property; you will be required to gain listed building consent before any building work can be carried out and this is different from planning permission. This includes inside the property and possibly the grounds surrounding it unless there are exclusions listed on the database. Usually, you will not be able to make changes to the property that aren’t in keeping with the original building or your consent may be refused to avoid causing any damage to the building. Lenders will check and if any unpermitted work has been carried out on the property previous, they may refuse to lend.

Not all lenders will lend on listed properties, but lenders with more experience with this type of loan will be more willing to consider a mortgage application for a listed building. They may stipulate certain requirements and criteria’s before agreeing to a loan. You may find lending terms may be shortened to reduce the risk of their security due to the property degrading overtime. They may also require a higher deposit to lower the loan to value ratio due to the increased risks of loaning on a listed property. Applications will usually be assessed on a case-by-case basis.



Grade 2 Listed Building

Grade 2 listed buildings are defined as the “buildings of special interest”. Grade two buildings are much more mortgageable than grade 1 listed buildings, but still, an individual could struggle to find a mortgage lender for a grade II building. Grade II listed buildings are the most common properties in listed buildings of the UK. Around 92% of buildings fall under the Grade II category. Grade II buildings comes constructed of different types. Suppose the grade II property has a significant amount of land attached or used for commercial purposes. In that case, it is better to contact a specialist lender who can provide you with a better mortgage deal.

Similarly, suppose you are interested in short term finance for a Grade II listed property. In that case, you may not be able to find a mortgage lender without any help from a specialist mortgage broker. Buying a grade II property needs a lot of things that you may need to consider, such as contact the local authority’s conservation officer and similar conservation organisations. A local conservation officer will be able to guide you through the complete process. The main thing is to ensure that the building meets the current regulations and standards set by the government. While buying a mortgage for a grade II home, it is important to note that only limited high street lenders will approve your application with better mortgage deals.

Grade 2 Property for Buy-to-Let

While getting a property for buy-to-let purposes, mortgage lenders require seeing the evidence that you have some previous experience maintaining a grade 2 building. So, it is always better not to create high hopes to get the mortgage for the first time from any lender. You may have a better chance if you have previously lived in a grade 2 building as a tenant. Contact a buy-to-let specialist adviser before purchasing a grade 2 building and searching for the best deal per your profile.       

Next steps

Finding a lender for a mortgage for listed buildings can be tricky, but getting professional advice from a mortgage broker can help make the process easier and save you time. A mortgage broker will be able to use their experience and expertise to direct you to lenders most appropriate for your personal circumstances and find you the best deal possible.


Can you get a mortgage on a Grade 2 listed building with bad credit?

Yes, you can get a mortgage on grade 2 property with bad credit. But if you have bad credit, you may need to contact a broker for financial advice. 

Can adverse credit affect my listed building loan application?

If you have an adverse credit history, then there might be chances that you won’t qualify for a loan even though you own a grade 2 listed building. However, this doesn’t mean that you cannot apply for a mortgage. It depends upon how many years you have been living in the house and what type of loans you already had taken out. For example, if you have never applied for a mortgage before, then you should try applying again after six months.

Can you get a mortgage on a grade 2 listed building if you are self-employed?

You can get a mortgage on a listed building if you are employed or self-employed. In fact, you can also take up a part-time job while working full-time. This way, you can earn extra money, which helps you pay off your monthly instalments faster.

 How long does it take to sell a Grade 2 listed buildings type of property?

It takes anywhere between one month to three months, depending on the location of the property. Generally speaking, the longer the period, the higher the price tag.

What happens when I want to move to another place? Can I rent out my old house?

When you decide to leave your existing residence, you must inform the local council office within 14 days.

 How do I know whether my Grade 2 listed buildings are insured?

The good news is that all listed buildings are protected by law, so they are automatically insured against fire damage and theft. Therefore, you don’t need to worry about insuring them yourself. All you need to do is check the condition of the building and its contents. Make sure that everything inside the building is safe and secure. Also, check the roofing materials and other parts of the building.

Should I seek professional advice before applying for a listed building’s mortgage?

Yes, because an independent mortgage broker can provide valuable information regarding mortgages available for purchase and sale properties. They can guide you through the entire procedure and ensure that you receive the right kind of service at an affordable cost.

What are the different grades, and how do they impact mortgages?

Grade 1 – The first category includes residential houses built prior to 1875. These types of homes usually come under the Victorian-era architecture style. You can easily buy these kinds of properties without any problems.

Grade 2 -This second group consists of residential houses constructed during the 19th century. Most of these structures were designed using traditional styles such as Georgian, Tudor, Gothic, etc. If you choose to invest in a Grade 2 home, you would require some renovation work.

Grade 3 – Houses from the 20th century include those made with modern architectural designs. Some examples of these include Art Deco, Modernism, Streamline Moderne, etc.

Grade 4 – Properties from the 21st century are known as postmodernist design. Examples of these include Brutalist, Postmodern, Minimalist, etc.

How much will it cost me to renovate my Grade 2 listed building?

Renovating a Grade 2 structure may not be cheap, but it isn’t too expensive either. Various factors determine the final costs, including the size of the project, number of rooms, floor area, etc. To find out more details, contact a reputable builder who specialises in renovations.

What are the benefits of buying a Grade 2 property?

There are several reasons why people prefer purchasing a Grade 2 property over others.

First, there are many advantages associated with this type of housing. For example, most of these properties have been well-maintained throughout their history, making them very attractive to buyers. In addition, they offer great value for money since they tend to sell faster than other types of real estate. Furthermore, if you plan to live in the same city where you purchased the property, you won’t face any commuting or moving around issues.

Why are Grade 2 properties a problem for lenders?

Lenders often refuse to lend funds for Grade 2 projects due to the high risks involved. This happens mainly because of two main concerns: lack of documentation; and poor quality construction. However, if you hire a qualified contractor to carry out repairs and improvements, your chances of getting approved for a loan increase significantly.