Getting a Mortgage on a Bungalow

If you are looking to buy a bungalow you may be wondering if obtaining a mortgage is as easy as if you were buying a house. You may also be wondering if a bungalow affects your mortgage application in any way.

The good news is for the most part, buying a bungalow is as straightforward as a mortgage on a house and the products are the same between the two. There are however, factors that can impact a mortgage application if you are buying a bungalow. Let’s explore bungalow mortgages in more detail.

Are Bungalow Mortgages Different?

The actual mortgage products are the same whether you are buying a house, bungalow or other type of residential property. There are differences though in respect of bungalows because each lender has strict property criteria. Because bungalows can in some cases be considered unusual properties, you may find your chosen lender refuses to lend on your bungalow.

Some bungalows have had extensive modifications or are constructed in unusual ways which can make finding a mortgage product difficult. Bungalows in certain postcodes may also present a higher risk to lenders and you may find your interest rates are higher as a result.

What Do Lenders Class as a Bungalow?

A lender will class a bungalow as a property on a single storey with a sloped roof. Most bungalows are detached, but some are semi-detached or in cases of retirement properties can be terraced.

Bungalows are typically designed for the elderly with layouts that allow easy locomotion. Some bungalows have had modifications to accommodate disabilities such as wet rooms, handrails, and ramps instead of steps.

If your bungalow is terraced or part of a retirement community, you may find a mortgage lender declines an application. Some bungalows of this type have restrictions about who can buy the property – for example, most retirement communities set a minimum age of 55.

Types of Bungalow and Mortgage Implications

There are a range of construction methods used with bungalows although the majority of bungalows in the UK are of standard construction with brick walls and a tile/slate roof. Below we outline specific types of bungalow and how they affect your mortgage application.

Woolaway Bungalows

Woolaway bungalows are prefabricated houses constructed with concrete frames and concrete walls. Some Woolaway bungalows have been partially converted to have brick walls instead of concrete walls.

These bungalows are notoriously difficult to obtain a mortgage on because lenders tend to dislike concrete as a construction material. This is because concrete degrades significantly over time (concrete cancer) and can crash the value of a Woolaway bungalow.

Colt Bungalows

Like Woolaway bungalows, you may find difficulty sourcing a mortgage on a Colt bungalow. These are wood frame structures that can have wooden construction materials throughout.

Colt bungalows can have brick walls and cavity wall insulation making them more mortgageable. If you are looking to buy a Colt bungalow constructed predominantly of wood you will need to find a lender that allows this type of construction.

Guildway and Dorran Bungalows

In the post-war era, there was an increase in home building with affordable bungalows being especially popular. Guildway bungalows are prefabricated wood structures and Dorran bungalows use both iron and concrete. Both types of construction are non-standard and will cause most lenders to decline a mortgage.

Standard Construction Bungalows

If your bungalow is of standard construction and has no (or few) modifications you will find it straightforward to get a mortgage as most lenders will offer a mortgage product. You may find the mortgage product you are offered has a slightly higher interest rate than you expected. This is because bungalows can be riskier properties to lend on.

Bungalows with Modifications

For lenders, bungalows hold a level of inherent risk because they are not popular across all age demographics. Most young people will not buy a bungalow. Because of this, lenders can be cautious when offering a mortgage on a bungalow as they might not be able to recoup the cost if they repossess the property.

This is exacerbated further if the bungalow has had mobility modifications. A lender will deem these bungalows as higher risk because even older people who seek a bungalow might not want one with mobility modifications.

In rare cases a lender may make an offer of a mortgage providing you agree to remove the mobility features and revert the bungalow back to its original condition. In most other cases, if the modifications are beyond a lender’s criteria, they will decline the application.

Are Bungalows More Expensive to Buy than a House?

Houses and bungalows each have unique advantages and disadvantages. This means for the most part, the cost of a detached house and a detached bungalow with the same amount of bedrooms is roughly equal.

In certain areas, you will find bungalows are much cheaper than houses, specifically in highly urban areas with a younger population. In seaside towns or quiet towns, hamlets and villages a bungalow can be more expensive than a house.

This is because these areas have older populations and the demand for bungalows is higher. Bungalows can be extremely expensive in highly desirable retirement areas, for example the Cotswolds or Lake District.

How Can a Mortgage Broker Help?

When purchasing a bungalow it becomes a task of matching the type of bungalow with a lender who will accept the property. Most unusual construction properties are mortgaged by smaller building societies rather than high street banks. Some building societies operate nationwide, whereas others will only lend on properties in specific local postcodes.

Without the expertise of a mortgage broker it can be like finding a needle in a haystack when matching a lender to your bungalow. This is where we can help. Contact us today for free no obligation advice about getting a mortgage on a bungalow today.