Selling a non-standard construction house

You can sell a non-standard construction house, but many mortgage lenders will not lend on some types, particularly concrete (PRC) houses designated as defective that have not been repaired under a recognised scheme, so cash buyers are often the main market and offers reflect that. How hard the sale is depends on the construction system, whether the house has been repaired, and whether you have the paperwork to prove it.

What is non-standard construction?

“Non-standard” or “non-traditional” construction covers homes built using systems other than conventional brick or block walls. Many PRC homes were built for councils and other public bodies, and some were later sold to their tenants. The main groups are:

Precast reinforced concrete (PRC): houses built from factory-made concrete panels or columns, with names such as Airey, Cornish Unit, Orlit, Reema Hollow Panel, Unity and Woolaway.
Steel frame: houses with a structural steel frame, clad in a variety of materials.
Timber frame: houses with a structural timber frame, often with a brick outer skin that makes them look traditional.
Other systems: a range of other methods, some used by only one builder.

The construction type is not always obvious from the outside. A survey is the reliable way to know.

What does “designated defective” mean?

Some PRC house types were found to have serious structural problems. The Housing Defects Act 1984 created a scheme to help owners of affected homes, and it was later incorporated into Part XVI of the Housing Act 1985, which applies in England and Wales.

Under section 528 of that Act, the Secretary of State can designate a class of buildings as defective where:

the buildings are defective because of their design or construction, and
the value of some or all of the homes has been substantially reduced because that has become generally known

A parliamentary answer in 1988 listed more than 20 house types designated nationally in England, including Airey, Boot, Cornish Unit, Orlit, Reema Hollow Panel, Smith, Unity and Butterley, Wates and Woolaway. Assistance under the scheme was aimed at owners who had bought from the public sector, and applications had to be made within the period set by each designation.

Government guidance for Right to Buy buyers is blunt about the effect: anyone thinking of buying a designated defective home from you might be unable to get a mortgage.

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What is a PRC repair certificate?

Between 1985 and 1996, PRC Homes Ltd, a subsidiary of the National House Building Council (NHBC), licensed repair schemes for the designated house types. According to BRE, a repair specification was set for each system, and approved parties issued certificates of completion that were acceptable to lenders and insurers.

BRE says a large number of homes were repaired this way, and the original specifications required brickwork for the new outer walls. The catch, BRE notes, is that there was no central register of those older certificates, so a lost certificate can cause real difficulty on resale.

BRE Global now runs a PRC Homes Repair Scheme. Registered Practitioners design and oversee repairs to approved specifications and issue a Certificate of Structural Repair, which is only valid once it is registered and published on the scheme’s Register of Properties. BRE says these certificates are intended to be acceptable to mortgage lenders and insurers.

If your house has been repaired, find the certificate before you market it. It is one of the most important documents you have.

Why do lenders treat these homes differently?

Each lender has its own policy on construction types. Government guidance notes that some lenders do not lend on blocks of non-traditional construction, and that even if you never needed a mortgage yourself, you might find it difficult to move on later if your buyers cannot get one.

In broad terms:

Unrepaired designated PRC houses are the hardest to mortgage.
Repaired PRC houses with a valid certificate are accepted by more lenders.
Steel-frame and timber-frame homes vary widely. Lenders’ attitudes differ from system to system, and some will want a specialist or structural engineer’s report.

When a buyer’s valuer spots non-standard construction, the lender may ask for a specialist report, which adds time even where the answer is good.

Should I repair the house before selling?

A repair to an approved specification, with a registered certificate, can open the house to mortgage buyers and improve the price. But repairs are substantial building work and the cost can be significant, so the sums need careful checking.

Get proper advice before committing. An RICS surveyor or structural engineer can tell you what a repair would involve, and you can then compare the likely cost and time with what the house might fetch repaired and unrepaired. For some owners, repairing first is the better route. For others, particularly those who need to sell soon, it is not practical.

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How do cash buyers approach non-standard homes?

Cash buyers do not need a lender’s approval, and some investors specialise in non-standard homes because they understand the repair options. They will price in the cost of any repair, the time it takes and the narrower market when they eventually sell.

Be clear about the trade-off: offers for an unrepaired non-standard house are usually well below the price of an equivalent traditionally built house, and a quick sale generally means accepting less than full market value. Our guide to how much cash buyers pay explains how buyers reach their figures, and our comparison of cash buyers, estate agents and auctions may help you weigh the alternatives.

If you would like to see what buyers on our panel might offer, you can get offers for my home. It is free and there is no obligation to accept any offer.

Many non-standard homes are former council houses, so our guide to selling an ex-council home may also apply, including any Right to Buy conditions.

Does this apply across the UK?

The designations under Part XVI of the Housing Act 1985 apply in England and Wales. Scotland and Northern Ireland have separate housing legislation, although PRC and other non-traditional homes are found across the UK and lenders everywhere apply their own criteria. If your home is in Scotland, buyers will see the chartered surveyor’s single survey in the Home Report, so it is worth knowing your construction type before you sell.

Common questions

How do I know if my house is non-standard construction?

Your purchase survey, mortgage valuation or title documents may say so. If you are not sure, an RICS surveyor can inspect the property and identify the construction type, which is worth knowing before you market it because buyers' lenders will ask.

Can a buyer get a mortgage on a PRC house?

It depends on the lender and the house. Many lenders will not lend on a designated defective PRC house unless it has been repaired under a recognised scheme and has a valid certificate. A repaired house with the right paperwork is far more likely to be accepted.

What if I have lost my PRC repair certificate?

BRE notes that the older repair schemes had no central register of completion certificates, which has caused problems where certificates have been lost. Check your deeds and the papers from your purchase, and ask your solicitor to help trace it. The current BRE scheme keeps a register of properties certified under it.

Is a timber-frame house hard to sell?

Not necessarily. Lenders take different views of different construction systems, so a timber-frame home is not automatically a problem. Some systems lead lenders to ask for a specialist report, so it helps to know your construction type and check what the buyer's lender needs early.