Mortgage for Listed Buildings with Thatched Roofs

Thatched roof mortgage

A listed building with a thatched roof is assessed on two things: the lender's rules on thatch and its approach to listed property. Many lenders accept thatch within their normal criteria, subject to the valuer and to buildings insurance, while some decline it. Listed status, fire-risk measures, specialist insurance and maintenance evidence can narrow the choice of lender further.

What lenders, valuers and insurers look at

For a thatched Grade I or Grade II listed property, lenders, valuers and insurers look closely at four things.

Fire risk and insurance availability

Insurers and valuers look at the condition of the thatch, how it is maintained and the fire safety measures in place, because these affect the fire risk. Insurance that covers the thatch and the listed status should be confirmed as available before you apply, because the lender will want buildings insurance in place on the property it lends against. Each insurer sets its own requirements, so ask it which fire safety measures it expects, for example whether chimneys must be lined or spark arrestors fitted.

Construction materials

Traditional materials, such as water reed or long-straw thatch, lime mortar, timber framing and solid stone, can cost more to repair and need specialist contractors, which can affect valuation certainty and narrow the choice of lender.

Ongoing maintenance obligations

Valuers and insurers look at how the thatch has been maintained, so it helps to have recent thatch inspections, chimney and flue servicing records and a qualified thatcher's view of the ridge's life expectancy ready.

Marketability and resale risk

A thatched listed home can appeal to a narrower group of buyers. The valuer reports on whether the property remains saleable within a reasonable time, and that view can change the lender's decision, the loan-to-value limit it offers and the pricing.

Typical lending stance by use

The lender's rules differ across residential, buy to let and commercial use.

Residential listed building mortgages (thatched)

Many lenders accept a thatched roof within their normal criteria, subject to the valuer and to buildings insurance being available, while some decline thatch and at least one specialist lender publishes a lower maximum loan to value for it. There is no general LTV band for thatch: the maximum depends on the lender, the product, the survey findings and affordability.

Buy-to-let mortgages on thatched listed buildings

Buy to let lenders apply their usual rental stress test, in which the expected rent must exceed the mortgage interest, worked out at a test rate the lender sets (one that allows for future rate rises, unless the rate is fixed or capped for five years or more), by a minimum margin each lender sets. On the thatch itself, buy to let lenders vary as residential lenders do: some accept it on standard terms and some decline it.

Commercial, holiday-let, or guest-house use

A holiday let, guest house or other commercial use is assessed under the lender's holiday let or commercial criteria. A trading business may be valued as a going concern, and the lender then looks at fire compliance, insurance premiums, business continuity and the cash flow. Maximum LTVs for these uses depend on the lender and the product.

Valuation and survey requirements

The lender's valuer may need experience of listed and thatched property, and further reports may be asked for, such as:

• A full building survey covering thatch depth, fixings, ridge condition, moisture ingress and timber integrity
• Electrical certification and chimney or flue reports, including whether the chimneys are lined
• Evidence of listed-building consent for past works on a Grade I or Grade II property
• Confirmation that future alterations will comply with conservation officer guidance

How to improve approval outcomes

• Use a specialist listed-building mortgage broker who checks which lenders' current criteria accept thatched properties and listed status
• Gather the documentation early: surveys, insurance terms, maintenance records and compliance certificates
• Budget realistically for long-term maintenance and future re-thatching
• Where possible, a lower LTV can widen the choice of lender and improve pricing
• Where timing is critical, short-term bridging finance can secure the property, followed by a refinance once surveys and insurance are in place. The refinance is a new application, so check its lender's criteria before taking the bridge

Financing a thatched listed building turns on each lender's rules for thatch and for listed property, so the lender is matched to the property and its documents before the application goes in.