Can buying a property with a loft room cause problems getting a mortgage?

Can buying a property with a loft room cause problems getting a mortgage?

 

Buying a property with a loft room can cause mortgage problems if the space has been converted without the correct planning permission, building regulations approval or fire safety sign-off.

Mortgage lenders are becoming increasingly cautious about loft rooms, particularly where the valuer says the room appears to be outside policy, has not been signed off by Building Control, or is being marketed as a bedroom when it should only be used as storage.

This does not always mean the mortgage application will fail, but it can delay the case and may lead to extra checks, conditions or a referral to the lender’s property risk team. 

Why can loft rooms be an issue for mortgage lenders?

Lenders want to know that the property is safe, structurally sound, mortgageable and saleable if they ever need to repossess it. A loft room can become an issue if:

Potential issue	Why lenders may be concerned
No building regulations completion certificate	The lender may not know whether the loft is structurally safe or suitable as a habitable room
No planning permission or lawful development certificate	The lender may worry the extension or dormer was not legally authorised
No fire safety sign-off	The room may not have a safe escape route, fire doors, smoke alarms or correct protection
Poor staircase or missing handrail/bannister	The valuer may flag safety concerns or non-compliance
Loft marketed as a bedroom but not approved	The property value may be affected if the “bedroom” cannot officially be treated as one
Older conversion with missing paperwork	The lender may ask for extra comfort before approving the mortgage

 

Some lenders may ask the borrower to sign a waiver or letter confirming that the loft room will not be used as a bedroom or living accommodation. This is more likely where the valuer believes the room should be treated as storage rather than habitable space. It is not ideal if the buyer is paying a premium for the property and the added loft space, and this may cause problems in the event of a building insurance claim if the room is used. 

Is planning permission always needed for a loft conversion?

Not always. Many loft conversions are carried out under permitted development rights, meaning full planning permission may not have been required at the time.

However, this depends on the type of property, the size of the extension, the roof changes, whether the home is in a conservation area, whether it is listed, and whether permitted development rights have been removed.

This is why it is not always obvious whether a loft conversion built many years ago had the correct consent. A seller may not have the original paperwork, or the work may have been carried out by a previous owner.

Borrowers buying a property with a loft room should ask their solicitor to check:

• whether planning permission was needed;

• whether planning permission was granted;

• whether the works were permitted development;

• whether there is a lawful development certificate;

• whether building regulations approval was obtained;

• whether there is a Building Control completion certificate;

• whether any indemnity insurance is available or appropriate.

Do you need building regulations approval for a loft room?

If a loft or attic has been converted into a liveable space, building regulations approval is normally required. This is separate from planning permission.

Building regulations cover safety and construction standards, including structural strength, fire safety, insulation, ventilation, stairs, headroom and safe access.

This is often where mortgage problems arise. A loft may not need planning permission, but it may still need building regulations approval. If there is no completion certificate, lenders may be cautious, especially if the space is being described as a bedroom.

Is fire safety a problem with loft rooms?

Fire safety can be one of the biggest issues. A loft conversion can change a two-storey house into a three-storey property, which may require a protected escape route.

Depending on the property, this can include fire-resisting doors, protected stairways, mains-powered interlinked smoke alarms and upgrades to parts of the existing structure.

If the valuer thinks the loft room does not have the correct fire safety protection, they may flag the issue to the lender. The lender may then ask for more information, a specialist report or confirmation that the room will not be used as habitable accommodation. This may then further complicate issues with the purchase.

What happens if the valuer says the loft is outside lender policy?

If the valuer states the loft room is outside policy, the case may be referred to the lender’s property risk team.

The lender will then decide whether it is still prepared to lend. The decision may depend on:

• the overall condition of the property;

• whether the loft is included in the property valuation;

• whether the loft is being used as a bedroom;

• whether there is a safe staircase;

• whether there is a handrail or bannister;

• whether the conversion appears structurally sound;

• whether paperwork is available;

• whether a structural survey or fire safety report can be provided;

• the loan-to-value and borrower profile.

Some lenders may still proceed if the loft is treated as storage only. Others may reduce the valuation, ask for works to be completed, or decline the property.

What can you do if the loft room has no paperwork?

There are several possible solutions, depending on the lender and the property:

Solution	How it may help
Provide a full structural survey	Gives the lender more comfort about the safety and quality of the conversion
Obtain a regularisation certificate	Building Control may be able to inspect and approve older unauthorised works, although this can involve opening up parts of the structure
Provide a fire safety report	Useful where the issue is escape routes, fire doors, smoke alarms or protected stairways
Ask the seller for historic documents	Planning consent, building regulations approval, architect drawings or completion certificates may exist
Apply for a lawful development certificate	Can confirm that planning permission was not needed or that the works are lawful
Sign a non-habitation letter	Some lenders may accept a letter confirming the loft room will not be used as a bedroom or living space. This is clearly an issue if the buyer wants to use the loft as a bedroom
Carry out small safety works	Adding a handrail, bannister, compliant balustrade or other minor works may help satisfy the valuer
Use a lender with more flexible property criteria	Some lenders are more pragmatic than others when loft paperwork is missing

 

Can indemnity insurance solve the problem?

Indemnity insurance may help with some planning or building regulation enforcement risks, but it does not prove the loft is structurally safe or fire compliant.

Some lenders will accept indemnity insurance where paperwork is missing. Others may still ask for a structural report, fire safety report or confirmation from the valuer.

Borrowers should take legal advice before contacting the council about historic works, as this can affect whether indemnity insurance is available.

Should buyers rely on the estate agent’s description?

It is well worth speaking to the estate agent if you have any concerns about the planning permission. If an estate agent describes the loft as a bedroom, it does not automatically mean it is legally approved as one.

A loft room may have a bed in it, but that does not mean it meets building regulations. If the room cannot be classed as habitable accommodation, the lender’s valuer may ignore it when assessing the property value.

This can be a problem if the buyer is paying a premium for a property advertised as having an extra bedroom.

Comment from Aaron Strutt, Product Director at Trinity Financial:

“We are seeing more lenders and valuers ask questions about loft rooms, particularly where the space is being used as a bedroom but there is no clear evidence of building regulations approval or fire safety sign-off.

“Missing paperwork does not always stop a mortgage, but it can make the transaction more complicated. Some lenders will ask for a letter confirming the loft will not be used as living accommodation, while others may want a structural survey, fire safety report or further comments from the valuer.

“The key is to investigate the issue well before exchange of contracts. Buyers should ask their solicitor, surveyor and mortgage broker to check whether the loft room is acceptable to the lender. It is much better to know early if the lender is going to treat the room as storage rather than a bedroom.”

Speak to a Trinity Financial adviser today

The mortgage market moves fast — and the right advice can make a significant difference to the rate and deal you secure. Get in touch with our team to discuss your options.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

Any links to third-party websites are provided for information and convenience purposes only. We are not responsible for the content or availability of external sites.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage