What are Offsite Manufactured Systems?
Offsite manufacture is a broad term encompassing several construction systems created in a factory away from the building site. These systems offer several benefits, such as enhanced energy efficiency, short construction timescales, and guaranteed build quality. Examples of offsite construction systems include timber frame, structural insulated panel systems (SIPs) and insulated concrete formwork (ICF).
How to advise on Offsite Manufactured Systems?
When it comes to advising on offsite manufactured construction methods, there are high upfront costs, as your clients is required to pay the manufacturer in full before the system is delivered to their site. Therefore, it’s vital their mortgage is tailored to suit their payment terms.
BuildLoan’s panel of lenders all support offsite manufactured systems with over 60 exclusive products available. The external fabric is what will determine how many will support your client’s individual project.
For example, where the external fabric is a traditional brick or block cladding, all lenders are generally happy to support the project. However, if the property has timber cladding on the entire property’s external surface such as Cedar or Hardie Board, as shown in the above video, this may reduce the number of lenders who can support the project. If the cladding is below 50% of the external surface, this will increase the number of lenders available to your client.
Assessing your client’s plans and drawings, and fully understanding the construction method and cladding can be difficult for you as a mortgage adviser, and this is where BuildLoan’s expert broker desk team and our Unicus portal can provide you with the support needed to ensure that your choice of product is correct first time around, avoiding foreseeable harm to your customer.
Tailoring the Cashflow on an Offsite Manufactured System
As mentioned, this type of construction has high upfront costs, which you must consider when choosing the right product for your client.
Traditional arrears stage payment mortgages are unlikely to be suitable in this instance because they release funds after each stage of the build, which means your clients will require deep pockets to cover the initial stages before receiving any funds from the lender.
Advance stage payments are ideal for this type of client because the funds are released before each stage of their build. This type of mortgage will ensure your clients have the funds required to pay for their offsite manufactured system.
Cost Based Mortgages
A further benefit you won’t find elsewhere is our cost based mortgages, which provide guaranteed funds throughout your client’s project without the worry of lender down valuations.
Our advance stage payment mortgages all offer guaranteed stage payments based on your clients’ build costs at each stage of their build, without any worry of lender down valuations associated with traditional self build mortgages that rely on a lender valuation before any release of funds.
Speak to BuildLoan about your client’s project to ascertain the best lenders and products for your client’s offsite manufactured system, and importantly, check if their external cladding system will impact the number of lenders available to them. By making some small changes, your clients can widen the products available to them – which can sometimes make the difference between their project progressing, or not.