What is a Grade II listed building?

Historic Buildings with special architectural interest and requires preservation are known as grade 2 listed buildings in England. Historic buildings built before 1700 and close to the original condition are considered grade 2 buildings. If you own a historic building considered a grade 2 property, this article will help you in the mortgage guidance for such buildings. At needingadvice.co.uk, Ltd, we have received many queries related to a mortgage on a grade 2 listed building in England and Wales.

Can you get a mortgage for a Grade 2 listed property?

Yes, you can get a mortgage on a grade 2 listed building, but you need to consult a mortgage lender who can provide you with the best mortgage deal. Living in a grade 2 building is the dream of many homeowners, but most individuals are not aware of the merits of historic structures in our country. Currently, there is only limited information is available in the calculation of costs of a historic structure. Therefore, read this article until the end to learn about all the important information related to loans on grade 2 buildings.

Why are Grade II listed buildings a problem for lenders?

As grade II listed buildings are an unusual type of home, which represents a higher risk than a standard home purchase for mortgage lenders. One reason is the limited availability of interested buyers, which could affect the property’s future value. It is also important to note here that rates offered on grade II constructions are higher than a standard home.

Maximum Loan to value on listed property mortgages

Most lenders will offer a low high Loan to Value (LTV) on a grade 2 listed property because of the increased risk factor involved. The maximum Loan to value cap will depend on the listing status and the mortgage lender. However, in some circumstances, lenders could also lend you 90-95% of the amount. Some lenders may cap the maximum Loan to value in which borrowers will only need a 20 or 25% deposit to secure the listed building mortgage. At last, it also depends on your building mortgage application process, so its advisable to contact a known specialist broker at the start.

Mortgage term on Grade II Listed buildings

The mortgage term on Loan for grade two listed building varies from lender to lender. According to an article on trinityfinance.co.uk, there are almost 35 lenders providing grade 2 listed building mortgages which do not even include the private banks and specialist lenders who can provide you with the best mortgage deals on these historic buildings. If your property has big land, outbuildings or any form of commercial premises, you may need to contact the smaller loan providers or private banks for your loan application. Some lenders may cap your mortgage term on a second-grade house to 20-25 years to account for the property age and limit the risks related to the property condition.

What else should I look out for with regards to grade 2 listed property mortgages?

There are many other important requirements for a grade 2 listed building, such as restrictive covenants applicable that need to declared by the vendor ahead of a sale. All the street lenders will consider these restrictions carefully, so its better to consult a market broker before planning an application for a mortgage. The second important consideration is the cost of insuring your grade II building. Some grade 2 properties are very costly to insure because of the heritage value. At needingadvice.co.uk Ltd, we have whole-of-market brokers who can help you with your mortgage application for a grade 2 listed building.

Another thing to consider is the building consent gained before applying for the mortgage application. For example, if the property is listed as the loss of any historical feature, it may consider as a criminal offence unless building consent has been obtained before.

Some high street lenders and building societies could also offer competitive interest rates for grade 2 buildings, its always better to get a bit of specialist advice.

Will I need a larger deposit?

Yes, in some cases, you will also require a larger deposit to mitigate the increased risks of these properties. Some mortgage lenders could offer you a higher LTV on these buildings. If you can afford a higher deposit, you may be able to access more lenders with better rates on your borrowing. On the other hand, it is also possible to get a mortgage with a smaller deposit on the grade 2 building, but you need to contact a specialist adviser.

Bad Credit and Grade 2 Building Mortgage

There is always a relationship between bad credit and mortgages but its not impossible to get a loan with bad credit history. At needingadvice.co.uk Ltd, we have helped many individuals who have worried about adverse credit. Unfortunately, if you have a poor credit history, the options for many mainstream lenders will be not possible. Still, some banks or building societies could lend you a mortgage if you have an application that fulfils all other factors. Feel free to contact our team of mortgage brokers who can help you with the suitable mortgage deal.

Repairing, maintenance and developing a Grade II listed building

Before purchasing a grade 2 property, it is also important to consider the maintenance, repairing and development costs of these properties, which are normally higher than the standard properties.

FCA disclaimer

Based on our online research, the above content is accurate as per the time of writing. Mortgage lender criteria and policies change regularly, so it is always better to speak to some financial adviser to get the best-updated information. It is to note that the information provided on the website is not tailored advice to every individual reader and does not constitute financial advice. All the financial advisers working with us are fully qualified to provide mortgage advice and work for organisations regulated by financial conduct authority. All the mortgage brokers in our are capable enough to offer the specific advice you need.