Insulated Concrete Formwork (ICF) homes are no longer a niche innovation in the construction industry. Used for over 50 years in the UK, ICF is recognised for its sustainability, energy efficiency, and durability. Despite these advantages, prospective buyers and builders often have questions about the mortgage-ability of such properties. Are lenders willing to finance homes built using this modern method? The answer is a straightforward, “YES”, with some caveats.
The Insulated Concrete Formwork Association (ICFA) confirms that ICF homes are regarded by lenders as insulated solid wall constructions, a standard method widely accepted in the mortgage industry. Systems manufactured by ICFA members have been approved by UK Finance (formerly the Council of Mortgage Lenders). However, lenders’ criteria can vary, and understanding these differences is key to a smooth mortgage application.
What the Lenders Say
Mortgage lenders across the UK are increasingly open to financing Insulated Concrete Formwork (ICF) properties, provided they meet standard construction and oversight criteria. All lenders require a 10-year structural warranty to ensure the long-term durability of the property. Additionally, the ICF system must be British Board of Agrément (BBA) approved, signifying compliance with recognised quality standards. For construction, lenders stipulate that the work must be carried out by a qualified contractor. In the case of self-build projects, the process must be overseen by an experienced and qualified contractor to guarantee adherence to building regulations and industry best practices. These requirements ensure that ICF homes meet the structural and safety standards necessary for mortgage approval, placing them on par with traditional construction methods.
Merits of ICF in the Mortgage Process
For those building or purchasing ICF homes, the process of securing a mortgage is largely comparable to that of traditional homes, provided the build adheres to lender requirements. Lenders are primarily concerned with factors like construction quality, market appeal, and long-term durability, areas where ICF systems excel when built to industry standards.
ICF homes are also praised for their energy efficiency, which can lead to reduced utility bills and greater affordability over time. This is a growing consideration for many buyers and lenders as sustainability becomes a central focus in the housing market.
Navigating the Process
To maximise your chances of securing a mortgage for an ICF home:
- Choose an approved system: This ensures the property meets widely recognised standards.
- Appoint a qualified Contractor: Their oversight during construction will satisfy lenders.
- Obtain Building Control Certification: All new builds must have certification to show regulation compliance.
- Work with approved structural warranty providers: Most 10-Year structural warranties are accepted by most lenders.
- Research lenders carefully: Different lenders have different policies, and understanding these early can save time and effort.
- Consider market appeal: Opting for conventional designs can help avoid valuation issues.
ICF homes are no more difficult to mortgage than traditional properties when properly constructed and documented. With lender acceptance steadily increasing and industry standards well established, ICF offers a practical and sustainable alternative for modern homeowners. Prospective buyers or builders should engage with lenders early and ensure compliance with specific requirements for a seamless process.
The following table highlights the comments from various lenders regarding obtaining a mortgage for ICF properties, at the time of publishing this article.
Provider | Comments |
TSB | TSB considers properties built using Modern Methods of Construction, including ICF, on an individual basis. A Building Research Establishment (BRE) Standard is required, and the solicitor must ensure all documentation is in order. Acceptance is subject to a valuer confirming the property’s suitability for a mortgage and compliance with the lender’s policies. |
Halifax | Remortgages are considered on newly built ICF properties if a consultant monitors the build throughout and a completion certificate is provided at application. NHBC warranties are accepted, and concrete construction is approved, subject to valuers’ comments. |
Nationwide | Nationwide requires a warranty from a recognised provider to ensure the property meets construction standards and is insured against post-completion issues. Mortgages are unlikely to be granted without an approved warranty, but all major providers are accepted. |
Yorkshire Building Society | This lender recognises ICF as a Modern Method of Construction (MMC) and requires a full NHBC warranty covering all aspects of the completed building, along with a Building Control Final Completion Certificate. Final approval depends on their local panel valuer’s assessment of the property’s value, condition, and market demand. While compliant properties are generally accepted, overly personal or unconventional designs may impact future demand, which valuers must consider in their advice. |
Virgin Money | This lender considers ICF properties subject to valuer comments. They also offer day-one remortgages, provided the property is fully completed with an appropriate warranty in place. |
Aldermore | Aldermore considers ICF construction provided the property has either an NHBC or BLP new build warranty and insurance is available at standard rates. Remortgages of completed ICF properties are also considered, subject to the applicant and property meeting the lender’s criteria. |
Mansfield Building Society | Mortgages for purchases are assessed on a case-by-case basis. Self-build ICF properties are accepted but applications are required to be submitted through BuildLoan. |
Darlington Building Society | ICF properties are subject to valuers’ comments on saleability and mortgage-ability. Remortgages are also considered once the property is complete and provide self-build options through BuildLoan. |
Kent Reliance | ICF properties are considered but requires a specified New Homes warranty that cannot be retrospective. For self-builds, the valuation may be impacted, with the final decision depending on the valuer’s assessment of the property’s future saleability and marketability. |
Bath Building Society | ICF properties are considered, subject to valuer comments, provided they have a 10-year structural warranty from an approved provider, such as NHBC or LABC. |
The Nottingham Building Society | ICF properties can be approved if positive comments are received from the valuer. Self-build mortgages are allowed once the property is completed, provided the clients are not property developers. |
The Tipton | The Tipton considers ICF construction, subject to valuers’ comments, in line with Valuer Guidance notes for Modern Methods of Construction (MMC). |
The Mortgage Works | The Mortgage Works is open to considering ICF construction, but approval will depend on the valuer’s comments. |
Chorley Building Society | This lender considers ICF, on a case-by-case basis. Acceptance generally requires local authority approvals, an NHBC or equivalent 10-year new build warranty, and BBA/BRE certification. Additional information, such as details of similar developments and their mortgage-ability, may also be required. |
Newbury Building Society | This lender considers MMCs, including ICF properties, on an individual basis. A warranty from their approved provider list is required, and the property must have at least 25 years of life expectancy remaining at the end of the mortgage term. Valuer comments are also considered in the decision. |
Newcastle Building Society | Newcastle Building Society can consider ICF properties, subject to valuation and warranty. |
Atom Bank | This lender considers ICF properties based on valuer comments and in accordance with their new build policy for the specific application. |
Warranty Providers
Several providers offer 10-year structural warranties to protect against major structural defects in new builds and conversions. Notable providers include: