Mortgage Eligibility for Steel Frame & MMC
New Build Homes in the UK
New-build homes constructed with steel frames or other Modern Methods of Construction (MMC) can offer innovative design and efficiency. However, because they deviate from traditional brick-and-block construction, mortgage lenders may classify them as “non-standard construction” . This means extra scrutiny in the mortgage process. The good news is that if these homes are properly certified – signed off by building control and covered by an approved 10-year warranty (e.g. LABC Warranty) – financing is obtainable from mainstream UK lenders. This report provides an in-depth look at lenders’ attitudes, requirements, and best practices for buyers seeking a
mortgage on steel frame or MMC new builds.
Lender Attitudes Toward Steel Frame & MMC Homes
Mainstream lender attitudes have been evolving. Traditionally, many banks were cautious with non-standard properties due to concerns about long-term durability and resale value . Steel-framed houses (and other novel construction types) were sometimes viewed as higher risk, especially older variants that had known issues (e.g. post WWII steel frame systems with limited lifespans) . Today, many high-street lenders are willing to lend on modern steel or modular homes, provided certain conditions are met. In fact, some lenders have no blanket objections at all: “Some lenders will absolutely lend on these properties with no issues… Others will not be comfortable” . Lenders like Halifax (part of Lloyds) take a case-by-case approach, relying on the specifics of the property and the valuer’s assessment rather than an upfront prohibition . By contrast, lenders like Santander use explicit lists of acceptable construction types – if the steel frame or MMC system is on the approved list, they’ll lend; if not, the application may be declined . This illustrates how policies vary: for example, Santander has a clear list of types they will/won’t accept, whereas Halifax is very open, depending on the property itself . Overall, attitudes are becoming more positive as MMC becomes more common. One broker notes that lenders’ knowledge and appetite for lending on these varieties has increased with experience . Major valuation firms have also stated that a well-built MMC home should be valued and resold similarly to a traditional home, with no inherent penalty in mortgageability . In short, most mainstream lenders do not automatically reject steel frame or certified MMC homes anymore – but they often impose additional requirements to ensure the property’s quality and marketability.
Mainstream Lenders’ Stances: Comparison Table
While lenders are open to steel frame/MMC homes, they typically require a few extra assurances before approving a mortgage:
• New-Build Structural Warranty: Virtually all UK lenders insist that a new build has a 10-year structural warranty from a recognized provider (such as LABC, NHBC, or Premier Guarantee). Most major banks will not offer a mortgage without such a warranty in place . These warranties protect against structural defects and give lenders confidence that any issues will be remedied. Fortunately, LABC warranties are accepted by all leading lenders , as are other warranties on the UK Finance approved list. Buyers should verify the home is covered by an appropriate warranty certificate at purchase – it’s effectively a ticket to mortgage eligibility.
• Accreditation of Construction Method: Lenders often ask for evidence that the non-standard construction method has been independently vetted. For example, Nationwide’s criteria for MMC developments require British Board of Agrément (BBA) certification of key materials (ensuring at least a 30-year lifespan for components) . Nationwide also “prefers NHBC Accepts” – an NHBC scheme that pre-approves innovative systems – and asks whether the system has Buildoffsite Property Assurance Scheme (BOPAS) accreditation . BOPAS is a certification that assures lenders of a system’s durability (typically 60+ years) and is widely recognized by UK Finance and the Building Societies Association as mitigating the risk of non-traditional construction . In practice, if the developer can provide BBA certificates, an NHBC/ LABC warranty, or BOPAS accreditation for the building system, it will significantly smooth the mortgage process.
• Detailed Valuation or Survey: All lenders will require a standard valuation survey, but for steel frame or other MMC homes the valuer may take “extra care” to assess structural soundness and marketability. Many lenders explicitly state that modern methods of construction will require an individual assessment by the valuer . If the valuer notes anything unusual, the lender may request a full structural survey or engineer’s report for reassurance . For example, Barclays’ policy says earlygeneration steel-framed houses are “not normally considered suitable security” unless a structural engineer’s report deems them sound . In the case of a brand-new steel frame home with building control sign-off, an engineer’s report is less likely to be needed, but buyers should be prepared for thorough inspections. It’s wise to gather any construction documentation (technical specifications, inspection reports, etc.) that the valuer or lender might find useful in evaluating the property.
• Loan-to-Value (LTV) Limitations: Some lenders impose lower LTV ceilings on non-standard properties, meaning the buyer must provide a larger deposit. HSBC, for instance, caps lending on non-standard construction at 80% LTV (requiring a 20% deposit); they “never have done any non-standard at 90%” . This reflects a cautious approach – if the property type is outside HSBC’s comfort zone, they either limit exposure or decline entirely. Other big lenders may not have a formal LTV cap but will often indirectly require more equity if the valuer downgrades the property’s value or if internal policy flags it. As a rule of thumb, a higher deposit (15–20% or more) can improve the chance of approval and access to better rates for these homes . That said, several lenders do offer standard high LTV loans (90–95%) on new-build steel frame houses when all other criteria are satisfied – i.e. the construction is robust and warranted.
• Insurance: Just as with any mortgaged home, the buyer must have buildings insurance in place. The difference is that steel frame or unconventional builds might require specialized home insurance. Lenders won’t usually check pricing, but they will require proof the property can be insured on standard terms. Buyers should ensure an insurer will cover the home (some insurers have exclusions for certain prefab or timber/ steel systems). While this isn’t a direct lender requirement, being unable to insure the property would stall the mortgage – so sort out insurance early. Specialist insurers or brokers can help if standard insurers are hesitant about the construction type . In summary, lenders need to see that the MMC home is safe, durable, and marketable. Providing a recognized warranty, third-party accreditation (BOPAS/NHBC), and allowing any extra surveys gives them that confidence. With these boxes ticked, a steel frame or modular home is treated much like any other new build in underwriting.xx
Variations Across the Price Range (£150k to £1m)
One point of interest is whether the property’s price or value changes a lender’s approach to non-traditional construction. A steel-framed starter home of £150,000 and a £1,000,000 architect-designed modular house both fall under the MMC category, but do lenders view them differently? In general, lender criteria for construction type remain the same regardless of price – the key factors are warranty, durability, and saleability, not the absolute price. However, in practice there are a few indirect differences to note:
• Lower-priced properties (~£150k): Many homes at this price point could be older ex-council steel-framed houses (for example, 1940s–50s BISF houses). These tend to be very cheap but also the most problematic in lender eyes. Mainstream lenders might outright refuse such properties or require extensive structural improvements . Only a couple of niche lenders will consider untreated BISF houses, often at lower LTVs and higher rates . So, if a steel frame home is cheap relative to the area, it may signal an inherently non-mortgageable design (needing cash buyers or refurbishment). New-build MMC homes at £150k (say, a modular affordable house) usually don’t face that stigma – the low price in that case is likely due to location/size, not construction risk. As long as it’s warranted and certified, a £150k new modular home can get a mortgage like any other first-time-buyer property (potentially even under schemes that existed for low-deposit buyers). Just be aware that very low-priced non-standard houses often correlate with older “defective” construction types, which mainstream lenders avoid .
• Mid-range to higher-priced homes: As property value increases into the hundreds of thousands, it’s more likely the home is a custom build or part of a high-quality development using MMC. Lenders are generally more comfortable with higher-end new builds, because they often come from reputable developers with NHBC/LABC warranties, and there’s an expectation of quality. A £500k modular townhouse, for example, presumably stands in a marketable location and has comparable sales, so lenders treat it similarly to a £500k traditional house. In fact, high-value MMC homes often boast excellent specifications (e.g. energy efficiency, design), which can be positives. Many lenders now offer “green mortgages” – special rates or cashback for energy-efficient homes – that apply to new-build MMC properties just as they would to a conventional build with a high EPC rating. The construction method alone isn’t a penalty.
• Very high-priced or unique properties (~£1m+): At the £1M end, buyers might use private banks or bespoke financing, but assuming a mainstream lender is involved, the main difference is likely the LTV limits on large loans. Many lenders restrict maximum LTV for loans above certain sizes (for example, a lender might allow 95% up to £500k, but only 85% for loans over £750k, etc.). This isn’t directly due to the construction, but it means a buyer of a £1m home will probably be using a 75–80% mortgage at most. That larger deposit inherently satisfies any construction-related caution too. The unique nature of a £1m one-off MMC home could pose a valuation challenge – if it’s the first of its kind, the surveyor might struggle to find comparables, potentially leading to a conservative valuation. But if the purchaser is putting down 40% (£400k) and the lender only finances £600k, there’s plenty of buffer, and the lender may be quite happy with the risk level. Again, a strong warranty and evidence of build quality are crucial; at this price tier, lenders will definitely expect all certifications in place because the stakes are higher. Encouragingly, evidence from the market shows that even premium MMC homes do sell and appraise well (mainstream valuers have noted there’s no fundamental reason these can’t be treated on par with traditional homes in value or resale liquidity ).
• Uniform criteria: Across all price bands, one constant is that the property must be readily resaleable on the open market for a lender to accept it as security. This is part of the valuation. If a home (cheap or expensive) is so unusual that future buyers might be scarce, a lender will worry. Fortunately, with government and industry backing, MMC homes are becoming commonplace, and buyers in all price brackets are proving willing to purchase them. The UK mortgage market has already shown that people will acquire these homes and can get mortgages on them , which helps reassure lenders at all price levels. In summary, a £150k non-standard house might actually face more lender hurdles (if it’s an older prefab), whereas a well-documented £1m MMC home might sail through (aside from normal luxury-home underwriting). The key is how the construction type intersects with the property’s overall quality and market context. Lenders don’t arbitrarily tighten construction standards for higher prices – they just become more cautious with large loans in general. Whether your desired home is entry-level or top-tier, providing the necessary documentation and meeting the lender’s criteria will be crucial to securing the mortgage.
Importance of Warranties and Building Standards
Because this topic is so critical, it’s worth reiterating the impact of building warranties and standards on mortgageability:
• Structural Warranty (LABC/NHBC/etc.): This is essentially your golden ticket to mainstream financing. Lenders view a warranty as proof that an independent insurance scheme has vetted the construction during build and will cover defects for 10 years. LABC Warranty, for example, partners with local authority building control and is accepted by every major lender . An LABC or NHBC certificate at hand assures the lender that “the property meets lenders’ requirements”. In fact, selling a new home without a warranty would drastically shrink the buyer pool because banks won’t lend without one . For steel frame/ MMC homes, a warranty is even more crucial, as it directly addresses the “newness” of the construction method. Always check that the developer has enrolled the property with a warranty provider from the UK Finance approved list (which includes LABC, NHBC, Premier, Checkmate, Build-Zone, among others). If not, obtaining a mortgage will be extremely difficult.
• Buildoffsite Property Assurance Scheme (BOPAS): This accreditation was developed specifically to reassure lenders on MMC. BOPAS involves a rigorous assessment of the construction system’s design, manufacturing, and longevity. A BOPAS-accredited system tells the lender that experts have certified the method to be durable for at least 60 years . Many banks and building societies look favorably on or even require BOPAS for novel off-site construction techniques . For instance, some smaller building societies flatly state they’ll only consider MMC homes that have BOPAS accreditation . Mainstream lenders might not require it if the home has NHBC/LABC warranty and NHBC Accepts, but having it can only help. Bottom line: if the developer of your MMC home has BOPAS accreditation, make sure to highlight that in your mortgage application – it could open more lender options. If not, the presence of NHBC/LABC warranty usually substitutes, since those warranty providers conduct their own technical audits.
• Building Regulations and Quality Assurance: It may seem obvious, but lenders need the property to have full building regulation approval (sign-off from building control). In the case of an MMC home, building control might involve some special considerations (for example, checking fire safety of modular components, etc.). Since our scenario assumes building control sign-off is done, that’s good. Additionally, schemes like NHBC Accepts (launched in 2020) have emerged to pre-approve innovative construction systems for warranty cover . If your home’s construction system is listed on NHBC Accepts, this is a strong positive – it indicates the system’s quality, performance, and durability have been reviewed by NHBC’s experts . Nationwide, for one, explicitly prefers MMC systems that have gone through NHBC Accepts . This shows how warranty and standards bodies are working together with lenders to streamline MMC acceptance. Buyers don’t need to obtain NHBC Accepts themselves (it’s something the manufacturer/developer does), but being aware of it helps you understand the landscape. In essence, warranties and accreditations act as a bridge between unconventional construction and conventional financing. They translate construction risk into an insured, quality-assured outcome that lenders can quantify. From a buyer’s perspective, knowing that your steel frame or modular home has these stamps of approval not only helps you get a mortgage but should give you confidence in the product you’re buying. It’s a form of consumer protection as much as it is a lender protection.
Government & Industry Support for MMC
The UK government and industry organizations have recognized the potential of Modern Methods of Construction to address housing needs, and they’ve introduced initiatives to support their adoption – which in turn helps buyers with mortgageability in the long run. Some key support mechanisms include:
• Government-Backed Development Finance: One reason lenders used to be wary of MMC was lack of long-term data and limited mainstream use. To change this, the government has invested in scaling up MMC through financing schemes. For example, in 2016 the Home Building Fund was launched, earmarking £2.5 billion for loans to developers using MMC (often targeting small and medium builders) . By 2019, over £200 million from this fund had been invested in MMC housing developments . In 2018, Homes England (the government’s housing agency) partnered with Barclays to create a £1 billion Housing Delivery Fund to provide development loans between £5m–£100m, explicitly aimed at increasing new homes (including those built via MMC) . These programs mean more MMC homes are being built with government-blessed funding, indirectly giving lenders confidence that these homes are sound investments (since due diligence is done as part of granting those development loans).
• Affordable Homes Programme and Policy Targets: The government has also signaled commitment to MMC in its affordable housing strategy. Homes England’s current Affordable Homes Programme requires that at least 25% of the new homes funded be delivered using MMC . This is a clear policy drive to normalize modern construction techniques. As a result, housing associations and developers are incorporating MMC to meet these targets, leading to more widespread acceptance. The government appointed an “MMC Champion” (industry expert Mark Farmer) to promote innovation in homebuilding – he has endorsed schemes like NHBC Accepts that create assurance around MMC . The overall message from the top is that MMC is a positive innovation needed to boost housing supply, not a fringe idea. This pro-MMC stance puts pressure on the mortgage market to “catch up with government policy” and not be an impediment to these homes .
• Industry Standards and Collaboration: Industry bodies have been working to make MMC more mortgage-friendly. We discussed NHBC Accepts and BOPAS – both are industry-led solutions to address lender concerns. NHBC (the leading warranty provider) created the NHBC Accepts service in collaboration with lenders and insurers, to effectively pre-certify MMC systems so that warranty and lending can be readily obtained . BOPAS was jointly developed by Buildoffsite, Lloyd’s Register, RICS and others specifically to give lenders a tool to evaluate off-site manufactured homes. These kinds of initiatives are endorsed by UK Finance (formerly Council of Mortgage Lenders) and the Building Societies Association, meaning the entire lending industry is on board with the concept of evaluating and approving MMC systems in a structured way . Additionally, the Royal Institution of Chartered Surveyors (RICS) has provided guidance to valuers on how to assess modern methods, stressing that they should look at comparability, durability, and market acceptance – with RICS’s assurance that there’s no valuation reason to discount MMC properties if built properly . All of this coordination reduces the “unknown” factor for lenders.
• Lender Participation and Pilot Programs: Some lenders have themselves become champions of MMC. For instance, specialized lenders like Hampshire Trust Bank (HTB) have openly stated they welcome MMC – HTB announced in 2024 that unlike others with strict lists, they will consider any type of MMC construction as long as it has BOPAS approval . While HTB is a niche player (specialist buy-to-let lender), it shows a trend where lenders compete by being more MMC-friendly. On the mainstream side, lenders like Nationwide and NatWest have been involved in cross-industry groups to improve green home finance, which often overlaps with MMC (since many MMC homes are energy-efficient). There are also green mortgages (offered by Nationwide, Barclays, NatWest, etc.) which reward new-builds with A or B energy ratings – many factory-built homes easily achieve these ratings. Buyers of an MMC home that is very energy efficient might qualify for a slightly lower interest rate or cashback incentive as a result (for example, Nationwide’s Green Reward or Barclays’ Green Home Mortgage). This isn’t an MMC-specific scheme, but it’s an added financial benefit that such homes often enjoy due to their eco-friendly design . Collectively, these government and industry efforts are making it easier for consumers to buy MMC homes with confidence. As more MMC homes are built and successfully sold with mortgages, a track record develops that further allays lender concerns. We’re essentially at a point where MMC and steel-frame houses are moving from “novel” to mainstream . The support structures (warranties, certifications, funds) are in place to ensure these homes are high quality, and lenders are increasingly treating them like any other property – especially new builds – albeit with a careful eye on build quality. For a buyer, this means you’re riding a positive wave: you’re not the first to get a mortgage on this kind of house, and you certainly won’t be the last.
Conclusion
Obtaining a mortgage for a new-build steel frame or other MMC home in the UK is very achievable today, as long as the home is backed by the right protections and you approach the process well-informed. Mainstream lenders have warmed up to non-traditional construction – many will lend on these properties under standard terms, provided a solid warranty is in place and a valuer confirms the home’s integrity. While you may encounter a few extra checks (technical certifications, possibly a more detailed survey), these are manageable steps when the builder has done their part in delivering a quality product. As a supplier/developer of steel frame or MMC homes, it’s crucial to educate potential buyers on these points. Emphasize the warranties and certifications your homes come with, and perhaps maintain a list of lender-broker contacts who are familiar with your construction method. Buyers will appreciate knowing that major lenders have already financed similar properties and that there are known solutions if one lender is cautious. By providing transparency about the construction and its approvals, you empower buyers to approach lenders with confidence. In summary, steel frame and MMC buildings can be just as mortgageable as brick-and-mortar homes. The industry is adapting to innovation, and lenders are part of that progress. With government support pushing MMC into the mainstream, buyers of these homes should feel reassured: they are purchasing the future of housing, and the mortgage market is gearing up to fund it. By following the guidance on warranties, lender criteria, and proactive preparation, purchasers can secure competitive mortgages and enjoy the many benefits these modern homes offer – from energy efficiency to superb build quality – for years to come. Sources: Main content references mortgage lender criteria and expert insights from Nationwide’s intermediary guidance on MMC , broker analyses of steel frame mortgage availability , and industry reports on the treatment of MMC in valuations . Warranty importance is highlighted by LABC and consumer resources . Government and industry initiatives are detailed in housing reports and commentary on NHBC Accepts , among other cited references throughout this report.
"Precision in Steel, Strength in Every Structure. Building Tomorrow’s Spaces, Today."
