“The bank refused my mortgage application. What now?”
This question haunts many UK property buyers and sellers.
I’ve helped hundreds of people with homes banks won’t touch. One in twenty UK properties faces this problem.
Unmortgageable property doesn’t mean unsellable property.
Some issues can be fixed in weeks. Others might never change.
In this guide, I’ll show you why banks reject certain properties. You’ll learn your options as a buyer or seller.
Most importantly, I’ll reveal strategies to turn problem properties into profits.
- Understanding Unmortgageable Properties in the UK Market
- Common Reasons Properties Become Unmortgageable
- Financing Options for Unmortgageable Properties
- Making Unmortgageable Properties Mortgageable Again
- Buying Unmortgageable Properties: Investment Potential
- Selling an Unmortgageable Property: Options and Strategies
- Why Choose Property Buyers Today for Unmortgageable Properties
Understanding Unmortgageable Properties in the UK Market
Some houses are too risky for banks to lend money on.
About 1 in 20 UK properties has issues that make getting a normal house loan hard. These include Japanese knotweed, very short leases, or major structural damage. Houses that can’t get loans often sell for much less money.
Many people think unmortgageable means unsellable. This isn’t true.
Some problems can be fixed quickly. Others, like being too close to water, might never change.
Banks worry about houses that might fall in value or be hard to sell later. Surveyors visit the property and look for problems that might make the house a bad risk.
Common reasons houses can’t get normal loans:
- Very short lease (less than 70 years left)
- Serious structural problems
- Non-standard construction
- Flood risk areas
- Japanese knotweed
Learn more about selling to cash house buyers here.
Common Reasons Properties Become Unmortgageable
Some homes can’t get a mortgage, even with good credit. Lenders avoid properties with certain problems that make them risky investments.
- Structural Issues
- Non-Standard Construction
- Legal Complications
- Environmental Factors
- Planning Permission Problems
- Short Lease Issues
Major structural problems scare lenders away immediately.
Subsidence, severe dampness, or roof failure make homes unmortgageable. Surveyors look carefully for cracks, movement, and other warning signs.
Lenders worry about homes that might collapse or need massive repairs.
These issues make the property worth much less than the asking price. Only cash buyers typically consider homes with serious structural problems.
Unusual building methods create lending barriers.
Concrete panels, steel frames, or timber construction often face lending restrictions. These non-traditional builds often don’t hold value like brick homes.
Some materials have known long-term problems.
Prefabricated concrete homes built between 1950-1970 are particularly difficult to mortgage. Many lenders maintain lists of construction types they simply won’t lend against.
Title problems prevent mortgage approval.
Missing documents or boundary disputes make lenders nervous. Clean property titles can be verified through the Land Registry before making offers.
Access issues are another common problem.
Homes without legal right of way to their entrance face lending restrictions. These problems sometimes need expensive legal solutions before mortgages become possible.
Flood risk creates mortgage obstacles.
Properties in high-risk flood zones face increased lending scrutiny. Some areas become completely unmortgageable after severe flooding events.
Other environmental issues include contamination.
Homes built on former industrial sites might have soil problems. Mining areas also face subsidence risks that worry lenders.
Unauthorized changes block mortgage applications.
Extensions or conversions without proper approval are lending red flags. These unauthorized changes could require expensive removal.
Building regulation breaches create similar problems.
Work completed without inspections makes lenders hesitant. These issues sometimes appear on local authority searches during the buying process.
Leases under 80 years cause serious mortgage problems.
Most lenders require at least 70-80 years remaining on leasehold properties. Short leases reduce property value and create future problems.
Extending leases can be expensive.
The cost rises dramatically when leases drop below 80 years. The government provides guidance on extending, changing or ending a lease that can help address these issues.Poor energy efficiency also creates lending obstacles. Properties failing to meet the minimum EPC rating to sell property standards face increasing restrictions from mortgage providers.
Financing Options for Unmortgageable Properties
Buying with cash is often the simplest solution.
When banks won’t lend on problem properties, cash buyers don’t need approval. They can buy any property regardless of condition, making sales faster with fewer complications. Many sellers learn about how cash purchases work to understand this option better.
Special short-term loans called bridging loans can help too. These typically last 6-12 months and give you time to fix property problems.
Some lenders focus just on risky properties.
Interest rates for these special loans are often 2-5% higher than normal mortgages. You’ll need a bigger deposit – usually 25-35% instead of 10%.
Having a clear exit plan is very important. Lenders want to know how you’ll pay back the money.
When approaching lenders:
- Be honest about all property issues
- Have repair quotes ready
- Show your property improvement plan
- Explain your repayment strategy
Getting alternative finance usually takes 2-4 weeks.
Making Unmortgageable Properties Mortgageable Again
Some houses have big problems that stop banks from giving loans for them. Here’s how to fix these issues so people can get mortgages to buy them.
Structural Repairs
Houses with broken parts need fixing first.
Big cracks in walls or wobbly foundations scare banks away. Getting builders to fix these problems properly is really important.
Take pictures before and after the repairs.
A building expert must check the work and write a report saying everything is fixed. This report helps convince banks the house is safe now.
Legal Issue Resolution
Houses with paperwork problems need sorting out.
Sometimes it’s not clear who owns parts of the garden or driveway. A property lawyer can fix these problems by finding old documents or making new agreements.
Fixing boundary issues helps a lot.
Make sure your house has a clear path to the road that you’re allowed to use. Banks worry if you might get blocked from reaching your own front door!
Planning Permission Regularization
Some house changes need special permission from the council.
If someone built an extra room without asking the council first, you might need to ask for permission now. This is called “retrospective planning permission.”
The council looks at the changes that were made.
If they say yes, you get papers that make banks happy. Sometimes you might need to change things to make them follow the rules.
Lease Extension Options
Some houses are only yours for a set time called a “lease.”
If the time left is too short (less than 80 years), banks won’t give loans. You can pay the building owner to add more years to your lease.
Longer leases make banks happy.
Getting a lease extension can be expensive but makes the house worth more too. The owner of the building (the freeholder) has to follow certain rules when setting the price.
Building Regulation Compliance
House changes need to follow safety rules.
If someone added new windows or changed the electrics without proper checks, you need certificates. A building inspector needs to check the work is safe.
Sometimes things need fixing first.
Getting these certificates proves the house is safe. Banks want to know the house won’t have problems later.
Professional Certification Requirements
Special reports help convince banks to give loans.
Damp experts, roof specialists, and electricians can write reports that show problems are fixed. Each report should say exactly what was wrong and how it’s now better.
Keep all these reports together.
Show these reports to the bank when asking for a mortgage. Before spending money on fixes, check what not to fix when selling a house so you don’t waste money on things that won’t help get a mortgage.
Buying Unmortgageable Properties: Investment Potential
Problem houses often sell for much less money.
Houses that banks won’t lend on can sell for 20-30% less than normal houses. This means people with cash can get good deals. Before buying, smart investors add up all costs – the price, fixing costs, bills while they own it, and selling costs.
Always check for hidden problems first.
Not all cheap houses are good buys. The best investors look carefully for expensive surprises.
I know someone who bought a house with a cracked foundation for £95,000. They spent £22,000 fixing it and sold it for £165,000.
Short projects usually work better than long ones.
The best way to make money is to fix the main problem that stopped banks from lending. This makes the house worth much more.
Good fixing projects include:
- Repairing big cracks
- Updating old wiring
- Replacing strange building materials
- Making short leases longer
- Getting rid of harmful plants
Most projects take 3-9 months.
Having a clear selling plan is important. Many investors consider selling at auction after repairs are done.
Selling an Unmortgageable Property: Options and Strategies
When your house can’t get a mortgage, selling becomes harder.
But you still have options to find buyers for these tricky properties.
- Cash Buyer Markets
- Auction Opportunities
- Property Developer Targeting
- Price Strategy Considerations
- Marketing Approaches
- Disclosure Requirements
Cash buyers don’t need bank approval.
These buyers have money ready to spend without loans. They often look for problem properties they can fix up later.
Cash sales move much faster than mortgage sales.
With no lender checks, you can often complete in 2-3 weeks. Professional cash house buyers specialise in purchasing properties with issues that make them unmortgageable.
Auctions work well for problem properties.
Houses with big issues often sell better at auction. Bidders come ready with cash and know they’re buying homes with problems.
The sale is guaranteed once the hammer falls.
You set a reserve price to protect yourself. Auction buyers must complete within 28 days or lose their deposit.
Developers look for challenging properties.
They have the skills and money to fix major problems. Developers often want homes they can completely rebuild or change.
They calculate profit after all repair costs.
This means offers will be lower than market value. But developers can often move quickly and handle properties no one else wants.
Problem properties need realistic pricing.
The price must reflect all the issues and repair costs. A good rule is to take the fixed-up value and subtract all repair costs plus a profit margin.
This discount attracts serious buyers.
If your property isn’t selling, there might be other issues beyond price. Check common reasons why isn’t my house selling to identify other problems.
Honesty works best with problem properties.
Clearly explain all issues in your listing description. Good photos should show problems rather than hide them.
Target your marketing to the right buyers.
Use phrases like “in need of renovation” or “cash buyers only” in listings. This attracts people looking for exactly what you’re selling.
You must tell buyers about all major problems.
Hiding issues can lead to legal trouble later. The property information form must list all known defects honestly.
Complete disclosure protects you legally.
If buyers discover undisclosed problems later, they can sue for the cost of repairs. Being upfront saves everyone time and prevents legal headaches later.
And to compare, here are the pros and cons of the main methods you have to sell your property if you can get it mortgageable again.
| Sale Method | Timeframe | Price Range | Fees | Hands-on Level | Additional Notes |
| Cash House Buyers | 7-28 days | 75-85% | None + legal fees covered | Minimal | Quickest most certain sale route |
| Traditional Auctions | 3-4 months | 75-90% | 2-3% + entry fee + legal fees | Medium | Exchange on auction day, in a physical auction house |
| Modern Method of Auction | 3-5 months | 75-90% | 2-3% + entry fee + legal fees | Medium | Online bidding, more flexible completion |
| Online Estate Agents | 4-7 months | 85-100% | Fixed fee i.e. £500-£1000 + legal fees | Very High | Self-manage viewings & marketing |
| Traditional Estate Agents | 6-9 months | 90-100% | 1-3% + VAT + legal fees | High | Regular viewings, negotiations |
| Assisted Sale (with or without cash advance) | ~12 months | 100% + | Mortgage payments deducted + renovation costs | Low | Can have partial upfront payment, buyer handles all refurb costs |
Why Choose Property Buyers Today for Unmortgageable Properties
If your home is unmortgageable this is one of the most common reasons people work with us.
We take any property in any condition and do our best to find a solution that works for you.
Here are some reasons why so many people choose to sell their property to us…
Speed
Most house sales take months, but we can buy your property in as little as 7 days.
This quick process is perfect if you need to move soon or want to avoid being stuck in a long chain of buyers and sellers. We have the cash on hand so don’t need to wait for mortgages or a chain to collapse.
Guaranteed Sale
Did you know 1 in 3 sales fall through on the open market?
We know how frustrating it is to get 6 months into a process and have a buyer pull out.
When we give you the final price for your house, that’s the amount you’ll get. Guaranteed!
No Costs
You won’t face any costs with us.
We handle all the expenses involved in buying your property, including legal fees and surveys. You get cash in your bank when the sale is complete, and there are no surprise estate agent commissions to worry about.
No Stress Or Hassle
Our team supports you through the whole selling process.
We keep you updated about what’s happening and answer any questions quickly. You’ll always understand what’s going on with your sale and what happens next.
Free Property Valuation
Our property experts will value your house at no cost to you.
They look carefully at your property and check local market prices to give you an accurate figure. This professional service comes with no obligations.
No Viewings Required
Forget about cleaning and tidying for viewings.
We don’t need multiple visits or open houses to make our offer. This means no strangers walking through your home, and no disruption to your daily life.
All Properties Welcome
Whether your house needs work or is in perfect condition, we’ll buy it.
We have experience with all types of properties and conditions. This means you can sell your house to us no matter what state it’s in.
Professional Legal Service
Our expert team manages all the legal requirements for you.
We work with experienced property lawyers who make sure everything runs smoothly, and put your property at the top of their list. This gives you peace of mind that your sale is being handled properly from start to finish.
