Securing a mortgage & buildings insurance against a listed building

Securing a mortgage against a listed building can be notoriously difficult for a number of reasons, however, this is something we have done successfully at Enness many few times.


Why is it difficult?

Lenders generally do not like lending against listed buildings. This is because they come with very strict guidelines about what you can and can’t do to the property in order to preserve it. Because of this, lenders are also wary to lend because they worry about the resale of the property. Listed buildings tend to be old or have an unusual construction, which would not appeal to everyone. What can be done to a building in restricted by its grade.


What is a building’s grade?

The two different grades of listed building are:  Grade 1 – which is classed as a building of exceptional interest, only very few of which are actually homes; and Grade 2 – particularly important buildings of very special interest. Naturally, Grade 2 is easier to secure lending on, whereas Grade 1 will be extremely rare and difficult.


Do lenders offer less appealing terms on listed buildings?

The challenge comes with standard high street lenders who will, in most cases, decline to even have the conversation about a listed building. Private lenders generally reduce the loan to value (LTV) that they will offer to a maximum of 65% to 70% LTV.


What else is there to consider?

Another thing you will need to factor in when getting a mortgage against a listed building is building insurance. This is also a very specialist market, where the premium to insure a Grade 1 or 2 listed property will be very high, making affordability tight and consequently putting off any potential buyers.


How can Enness make the process smoother?

Essentially, it comes down to finding a lender you can have a sensible conversation with. In our experience, this is typically easier to do with smaller building societies or private banks, as they tend to approach lending with a more holistic outlook.


At Enness, we have excellent relationships with a variety of these types of lenders across the market who would be willing to have the conversation. Don’t hesitate to get in touch if this is of interest to you.


Arrange to speak to an Enness Broker