Church conversions can be great places to live. They appeal to a lot of people because of their character and charm, with high ceilings, tall windows, and other unique features. Churches for residential sale are often found in desirable, rural areas. While these might be dream homes for some, there is of course the big question: how do I get a mortgage for a church conversion?
In this guide, we'll look at the different ways to buy a converted church, any criteria for conversion, and what your mortgage options are. For more general advice about buying a property, read our house buying guide.
The Topics Covered in this Article Are Listed Below:
What Are the Options to Live in a Converted Church?
There are two ways to buy a church conversion. These are:
Find a Converted Church for Sale
Estimates suggest that over 20,000 churches have been sold and converted in the UK. The simplest way to live in a converted church is to wait until a suitable property comes up for sale. Compared to other types of houses, there aren't many churches, so you might be waiting a while for one to hit the market. This low supply also means that you might be up against some fierce competition to buy the property. However, if this is your dream property type, it can be a very straightforward way to get there. Of course, you could consider what other house types will meet your needs. For example, converted barns often have the same airy feeling and spacious floor plan, while converted rural schoolhouses also have a lot of character.
Convert a Church Yourself
The number of active churches is dropping, so more lovely buildings are becoming available for purchase. You could buy a church building and either work on it yourself or hire builders to convert it into your dream home. This route will take longer to achieve than buying an already converted church. However, it could save you money and allow you to plan the house to your exact preferences.
Both of these routes have their merit. Choose between taking time to convert a church or getting one pre-converted. The route you pick will have a big impact on how you can get a mortgage, so it's worth reading up on both options before you decide. Read on to learn more.
Can You Get a Mortgage on a Converted Church?
It’s quite simple to get a mortgage on a church that has already been converted. A pre-converted church will be very similar to any other standard home, and you'll usually be able to get a standard mortgage. While there are a few differences, getting a mortgage for a converted church can be much easier than getting a mortgage to convert a church yourself. Be aware that there may be other issues if the church is considered non-standard construction, which could mean that you need a specialist mortgage.
Requirements For a Mortgage on a Converted Church
The requirements will depend on what exactly you want to use the church for, as well as the exact nature of the church. The four main types of mortgages you could take out on a converted church are:
Residential
If you plan to use the church as your main home, a standard residential mortgage is preferred. These will usually have a minimum deposit of around 10%.
Second Home
Getting a mortgage for a second home can be harder, as the lender will want to see proof of affordability. This is because, if people lose their income or struggle to pay, they're more likely to stop paying on a second home rather than their primary home. A second home mortgage could require a higher deposit amount and higher interest rates.
Buy-to-Let/Holiday Let
If you intend to buy a church to rent as a holiday home or to a long-term tenant, you’ll need a buy-to-let mortgage. This normally means a higher deposit payment and a higher interest rate. Similarly, to second homes, people are more likely to default on investment properties, rather than on the mortgage for their primary home.
Commercial
If you want to use a converted church as a commercial property — for example, as a party venue, meeting hall, music venue, or similar — you’ll need a commercial mortgage. Commercial mortgages may also have requirements for relevant licenses and permissions to use the building how you intend to. Higher deposit amounts and interest rates may apply.
For all of these mortgages, make sure you have the appropriate insurance for the building, depending on the intended use. You could find that insurance for commercial or buy-to-let uses is more expensive due to the added risks. Holiday home insurance can also cost more if the property is going to be left empty for large chunks of time.
Don't forget the standard requirements that are needed for any mortgage, such as proof of stable income and affordability checks that allow you to borrow enough to cover the cost of the church.
How Is a Converted Church Mortgage Different from Standard Mortgages?
While a converted church can fall under a standard residential mortgage, there are some exceptions. For example, many churches may be classified as non-standard construction. In this case, the church has been built using methods that aren’t considered as safe and secure as standard construction methods. For example, many churches have significant timber structures, use stone instead of bricks, have steeples or towers, or other unusual features. This will require a specialist mortgage, which may have a higher deposit requirement and interest rate. For any specialist mortgage, it’s highly recommended that you use a mortgage broker, like John Charcol, to help you find a lender suitable for your needs.
Can You Get a Mortgage to Convert a Church?
If you want to buy a church and convert it into a home yourself, you'll need a different type of mortgage, such as a self-build mortgage or a renovation mortgage. This is a specialist mortgage type, and you should almost certainly go through a mortgage broker like John Charcol, who’ll be able to find the right type of mortgage for you.
Getting a mortgage to convert a church yourself will require a thorough plan of work. These projects are seen as very high-risk by mortgage lenders — renovation or conversion plans can be halted or abandoned completed due to poor planning or unexpected circumstances. There is also the concern that the property will only be worth the value of the mortgage when it’s finished. In this case, mortgage lenders become hesitant as they cannot use the house as security for the loan as easily. A good plan and full contingency arrangements are important to get a mortgage to convert any building.
What Are the Requirements to Convert a Church?
To increase your likelihood of getting a mortgage for converting a church, you should make sure the following are properly arranged:
Planning Permission
As with any conversion, you’ll need outline planning permission to be able to undergo renovations. Not having planning permission can entirely stop a project. You’ll often only need to have outline planning permission at first, as you might have to apply for more detailed planning permission as the project evolves.
Approval from the Church
Before a church can be converted into a home, you’ll need to make sure you have full permission from the Church that it is part of. The building will have to be deconsecrated before it can be converted.
Listed Building Consent
If the church is a listed building, you’ll need another level of consent to alter it, if your modifications will change how it looks.
Full Conversion Plans
You should have full plans of how you intend to convert the building. This should include detailed architectural plans, timeframes, and contingency plans for any common issues that could occur during the process. This should be looked over by a skilled professional in order to make sure it’s accurate.
Surveys
Before you can start any work, you’ll need a survey of the building to check for any issues, structural problems, or building concerns, especially if it’s of non-standard construction.
Financing Estimates
You should have full financial outlines for what you expect to spend on the conversion of the church. This should include all materials, labour costs, contingency funds, costs for additional surveys, and any other expenses.
It might seem like this is a lot to get together in order to get a mortgage, but having all this information will show the mortgage lender that you’ve seriously looked through the process of converting a church. All of this is to give you the highest chance of success with your conversion project, which should in turn make securing a mortgage easier.
How Does a Self-Build Mortgage Work?
A mortgage for building or renovating a house can be quite different from a standard mortgage. For conversions that do not require too much work, they might be very similar to a standard mortgage. In this case, you'll receive the whole lump to purchase the property and do the required work.
For larger conversions or cases where the church needs major repair work as well as a conversion, it can be different. Typically, in these cases you’ll get the funds in instalments as you complete different stages of the building work. This is so that the mortgage lender never has too much capital at risk in case the conversion falls through. The building work would need to be checked and signed off at the end of each stage in order for you to get the next payment. These payments would either be in advance to fund each stage or in arrears to cover the costs of a completed stage.
Self-build mortgages typically have a higher deposit requirement than standard properties, of around 20% minimum. This could be higher if the building has other issues such as non-standard construction.
Other Ways to Finance a Church Conversion
A mortgage is usually the best way to finance a church conversion and a mortgage broker can help you find a suitable mortgage even in complex situations. However, you could also look at:
Remortgaging Another Property
If you own another home, you could remortgage it and use the funds for your church conversion. However, this has an added level of risk as your main home will be used as the security for the loan. This means that if you fail to meet your mortgage payments, your primary home could be repossessed to cover the debt. If this happens before the conversion is finished, this will leave you without a habitable home.
Bridge Loans
If you need to get a smaller loan before you get a mortgage, you can get a bridge loan. This is a loan that covers the gap between when you purchase the property or when work starts, and the date that your funding comes in. This is also useful when you have an arrears-type self-build loan, as this will let you cover the building work for the first stage until it has been signed off and the mortgage lender releases the first stage funds.
Development Financing
This can be used for developing a property for commercial use or for buy-to-let uses.
Can a First-Time Buyer Get a Mortgage on a Converted Church?
A first-time buyer could get a standard residential mortgage for a pre-converted church with relative ease. However, they might struggle to get a specialist mortgage, such as:
- Non-standard construction mortgage
- Self-build mortgage
- Buy-to-let mortgage
- Commercial mortgage
If you want to get a mortgage like this as a first-time buyer, you may need one of our expert mortgage brokers to help you find specialist church mortgage lenders.
Are There Some Converted Churches Here I Wouldn't Be Able to Get a Mortgage?
There are some issues that might prevent you from being able to get a church conversion mortgage at all. For example:
Listed Building
If the church is a Grade 1 Listed Building, most lenders will not agree to a mortgage. For a lower-grade listed building, you’ll have a limited number of mortgage lenders to choose from.
Graveyards
Some lenders will not offer a mortgage on a converted church if it has a graveyard attached to it. Even if you can get a mortgage, it’s also important to bear in mind that members of the public must be able to have the right of access to the graves, which can limit the conversions that you can do.
Restrictive Covenants
Some churches may be accepted for conversion, but you might not be able to change the outside at all. This again limits what you can do to the church.
Properties Where You Cannot Get Suitable Insurance
Insurance is a requirement of mortgages, but it might be hard to find suitable insurance for churches that are too old, have costly repairs, or are structurally unsafe.
Mortgages for Church Conversions – Round Up
A converted church can be a dream home for a lot of people. If the church has already been converted, then it can be easy to get a mortgage as you would for any other standard type of home. There are some cases where it’s harder to get a mortgage, such as for a listed building, or a church with non-standard construction.
If you want to convert a church into a house yourself, then you would need a specialist mortgage type, such as a self-build mortgage. This is more difficult to get. It requires considerable planning beforehand and can have higher criteria for borrowers. For any specialist mortgage type, it’s worth contacting a broker who can help find the right mortgage lender for your needs to make it simple and easy to apply for a mortgage.
Here at John Charcol, we have mortgage brokers with experience in specialist mortgage types, including church conversions. Simply get in touch today to see how we can help find your ideal mortgage, whether you are looking for a rental opportunity or your dream home.
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