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There are many varieties of prefabricated, or prefab, homes that were built in the 20th century because of their low cost and speed of construction. But these properties can face additional barriers to selling compared to homes built using traditional methods. Nevertheless, there are steps you can take to increase your odds of selling a prefab home speedily.
- What type of property is considered to be a prefab home?
- Reasons why buyers might be looking for a prefab house
- Potential drawbacks when trying to sell your prefab property
- Will a buyer be able to get a mortgage when I sell my prefab house or flat?
- Your possible tax liability with selling a prefab home
- Choices for how to find a buyer for your prefab house or flat
- Top questions and answers about selling a prefab property
What type of property is considered to be a prefab home?
Prefabricated homes, also known simply as prefab homes, are properties that were designed to be built at relatively low expense but also very quickly, by using non-standard construction material such as steel, concrete construction and a number of other different methods.
Generally, you own a prefab home is the building consists of several different structural parts that were created in a factory and then driven to a construction site where they were assembled. This reduces the need for extensive ground excavation and foundations, and also allows for speedy installation, without the need for a highly specialised team of construction workers.
These properties became popular in the UK following the Second World War, after which there was a high demand for new housing because of the destruction of properties that had been caused over German air raids over several years. Prefab homes could be built fast and at a reduced cost, and they were initially meant to only be used as temporary residential dwellings.
Many different companies invented prefab construction processes, so there’s no single type of this home. Some of the common brand names and variations of prefab properties that can be found throughout the UK are Airey, Arcon Cornish Unit, Hawksley, Laing Easiform, Lecaplan, Mowlem, Orlit, Reema, Swedish, Tarran, Wimpey No-Fines properties, and several others.
Some councils that are responsible for prefab properties built decades ago have been moving to demolish the homes and replace them with newer builds. The councils cite safety concerns and other factors, arguing that the houses and flats are outdated and need to be replaced. For example, Basildon Council is embarking on a £2.3 million project to tear down a number of prefab properties and replace them with modern builds.
Despite the original intent behind prefab homes, some have continued to be lived in for many decades, and there are many still being bought and sold throughout the UK today. They generally sell at a lower price than conventional homes with no structural problems or other negative issues, but not always, and some prefab properties can still attract decent offers.
Reasons why buyers might be looking for a prefab house
Whenever an owner is preparing to sell their home, it can be useful to learn all about the benefits of their type of property. This can make it easier to talk with potential buyers about the pros and cons of owning the home, and to help make the case for why they should buy it.
Although prefab homes were seen as temporary dwellings, there is still some interest from buyers in these properties. And whilst there are certain disadvantages that come with owning a prefab home – as described in the next section of this guide – there are also certain advantages with these houses and flats.
Enviable location: Many prefab properties built after the Second World War replaced homes in city centres and other enviable locations that had been destroyed. This means that a number of prefab flats and houses that still exist are located in areas that are in high demand from buyers, and that could increase the number of people who might want to make an offer on your home.
Investment opportunity: Because prefab properties tend to be sold at slightly lower prices than homes built using traditional methods, your house or flat might be attractive to a developer. They might see it as a low-cost investment that they could then rent out to people on a monthly or annual basis, which would give them a consistent additional source of income.
Potential drawbacks when trying to sell your prefab property
Just as there are some advantages of owning a prefab flat or house that might make your property more appealing to buyers, there are also some cons that it’s vital you understand.
You’ll find that some, or all, potential buyers who are interested in your prefab property might raise the below concerns in discussions with you. Having immediate answers available can help to address some of those fears and hopefully keep a buyer interested in the property, whereas if they have wait a long time for you to provide answers, they might start to look elsewhere.
Repair costs: Because some prefab homes were built using construction methods that are no longer in use, it can create a problem if the property suffers storm damage or some other issue that necessitates structural repair work. Buyers might have concerns that it will cost them a lot of money to find replacement parts to repair the home if it suffers damage in the future.
Cheap stigma: Unfairly or not, some prefab properties have a stigma in that some buyers consider them to be cheap, unstable homes given the original intent that they were to be temporary dwellings, and it can be hard to persuade some buyers otherwise. However, fast property buying companies don’t apply this stigma and will be willing to purchase your home.
Lifespan worries: This is related to the stigma of some prefab homes being seen as cheap properties. The fact that the UK government and developers initially saw prefab properties as only having a relatively short life of about 10 years means that some buyers will believe the property is unstable in the long term and they will lose any interest in purchasing it.
Will a buyer be able to get a mortgage when I sell my prefab house or flat?
Separate from the typical pros and cons of owning a prefab property, you also need to consider the possibility that it might be harder for a buyer to get a mortgage to purchase your home.
Some mortgage lenders do not look favourably on concrete construction houses and flats, based in part on their fears that the properties have too many structural problems and are outdated.
Lenders might be hesitant to issue a mortgage to a private buyer to pay for the cost of purchasing your prefab house due to concerns that it will be hard to recoup their loan if the buyer defaults on the mortgage payments. If that situation occurs, the lender as a last resort will try to sell the home to pay for whatever balance is remaining on the mortgage. They might worry that the prefab property will never reach a sale price that meets that value.
If this happens, it will simply create months of delay for the sale of your prefab home, because after the prospective buyer has their mortgage application denied, the sale will fall apart. Then you’ll have to start the entire process of trying to find a buyer over from the beginning.
One way to avoid any complications with a buyer’s ability, or inability, to obtain a mortgage for purchasing your prefab home is to get in touch with a quick home buying company. These businesses, such as LDN Properties, have the financial power to purchase homes right away, without needing to even consider applying for a mortgage. This removes the issues altogether, and could result in you managing to complete the sale of your home in just a few short weeks, because that’s the average time it takes these companies to finalise buying a property.
Your possible tax liability with selling a prefab home
Your goal when selling your prefab home – whether that’s a Laing Easiform house, Wimpey No-Fines property or another other variety – should always be to maximise your profit and reduce your expenses.
One important consideration is assessing how much potential Capital Gains Tax you might have to pay on the sale of your property. This is a tax that the government charges on the profit, also known as the gain, that you make on an asset, such as a house, when you sell it.
Note that there may be certain exemptions, withholdings and other important factors that might be able to reduce or even eliminate the amount of Capital Gains Tax that you have to pay. Always check with an accountant or other tax specialist to find out your potential Capital Gains Tax liability when selling a property.
Choices for how to find a buyer for your prefab house or flat
When you are ready to sell your prefab home, the next important decision you will have to make is deciding which method you would like to try finding a buyer for the freehold or leasehold house or flat and trying to ensure the sale doesn’t fall through.
Typically, homeowners choose among four options – selling on their own, using a property auction, selling with the help of an estate agent, or selling to a quick home buyer like the London-based LDN Properties. Each of these methods have certain unique advantages, but some of the options also come with rather significant drawbacks that you should know about.
In order to help you decide on the method of selling that is right for your situation, you should write down a budget for the sale of your home and other key facts, such as how quickly you would like to sell, and whether you’re willing to pay any fees for the process of selling. Compare all of this information against the specific details of the four different selling approaches below, and this should help you to determine which choice is best suited to your wants and needs.
Selling on your own
When you decide to sell a prefab property on your own, you’ll be accepting responsibility for all of the work involved with securing a buyer. This starts with preparing a listing, which describes the home and features photographs of the inside and outside, and then advertising the listing in local newspapers and online. You’ll then have to arrange viewings to give people tours of the property, and field offers, hopefully seeing one of them through to exchange of contracts.
It’s a huge amount of work and it can be very stressful in addition to requiring a lot of time and money. That’s why you should only consider it if you’ve got a friend or family member with experience selling homes that is happy to help, or you have sold a property in the past.
In addition, you might find that it takes a very long time trying to secure a buyer this way, and you shouldn’t be surprised if your prefab home remains unsold for more than a full year. This is naturally not a good match if selling quickly is your first priority when looking for a buyer.
The only obvious advantage of selling this way is that you will not have to a pay a third party, like an auctioneer or estate agent, any commission for selling your home, boosting your profit.
But you could still have other expenses when selling that will lower the profit you can expect to make, such as the costs involved with preparing and advertising the listing for your home. Instead, you could consider getting in touch with a fast property buyer because you will be able to get a no-fee sale but with the added benefits of doing so within weeks and with minimal effort.
Using a property auction
One way to avoid having to put much effort into selling your prefab house or flat is contacting an auctioneer. This works much the same as auctioning any other type of asset – you will choose a reserve price, which is the lowest value at which you are willing to sell your home – and then people will place price bids of ever-increasing value, with the highest bidder being the winner.
Just beware that it’s possible your home will not receive any bids, which means that it does not sell, and you’ll have to start over with trying to find a buyer, adding months to the process.
Alternatively, you might only get one bid at the reserve price, and this is considered a binding legal agreement to purchase your home that the winning high bidder can sue to enforce.
And those fees are typically imposed as a percentage of whatever the final sale price might be for your property, then deducted immediately from the sale proceeds, lowering your profit. Ask individual auctioneers whether you might be able to negotiate a lower amount of commission, or whether the buyer can take on the responsibility for paying some of the fees.
Auctioneers charge fees to pay for the work that they do in creating and advertising a listing for your home, and hosting the auction itself, as well as overseeing completion of a successful sale.
Although this approach for selling can be less stressful than trying to find a buyer on your own, it will also take quite a lot of time. There’s usually a wait of many weeks between when you list your property for sale and when the auction happens, and then if the property sells, the winning high bidder has about 28 days on average to complete their mandated steps to finalise the purchase of your house or flat. It’s possible that some auctioneers might be willing to set a tighter deadline for completing the sale, so this is always a question that’s worth asking.
Because you’re selling a prefab home, it’s worth asking specific auctioneers if they have had any success with selling that type of property in the past. Any company that has never managed to sell a prefab house or flat before could find it difficult to get buyers interested in your home. Conversely, an auctioneer who has managed to sell several prefab properties in the past at decent prices that generated profit for their owners could be a great choice for your home sale.
You may also be given the choice either the traditional or method of auctioning your home. There is no right or wrong answer when it comes to choosing between these two approaches, and often it’s just personal preference, or perhaps only one of the two methods is available.
With the traditional method, the listing for your property will be advertised for a certain number of weeks, and then the auction will be held for a short amount of time on a specific day, where people can place bids and the top bid when the auction ends is deemed the winner and buyer. With the modern method, your listing will be active for many weeks or longer, and people can place bids on the property 24 hours a day, seven days a week during that time. The highest bid at the time the listing expires is then deemed the winning high bidder and property buyer.
Selling with the help of an estate agent
Or you might be thinking about using an estate agent to sell your prefab home, which is another option that won’t require much work from you, but which has its own negative aspects.
Estate agents will have the responsibility for preparing and advertising the listing for your prefab property, organising and leading the viewings, and hearing offers from buyers. They will also hopefully guide any serious offer through to exchange of contracts and completion.
For this work, most estate agents will charge commission based on your property’s final sale price. This fee will be subtracted immediately from the sale proceeds, which will reduce your final net profit. You might be able to negotiate a lower fee with some estate agents, so ask if this is feasible.
Selling this way can take a very long time, and is far from ideal for those owners wanting to sell in a hurry, because your prefab home could remain on the market for a long time with no offers.
Just as you should ask auctioneers about their success rate with selling prefab homes, you should do the same with estate agents. They should be honest with you about whether or not they have found buyers for prefab properties in the past. You might want to avoid selling via an estate agent with no past success selling prefab homes, as they could struggle to sell yours.
Selling to a quick home buyer
Alternatively, think about selling your property to a quick buyer, who should be able to give you a no-stress, hassle-free and streamlined way to sell your home. They make competitive and speedy offers to buy all ages, conditions, shapes, sizes and types of freehold and leasehold houses, flats and other buildings, and the legitimate companies never charge any fees.
These companies, like the London-based LDN Properties founded in 2003, have the financial ability to immediately purchase homes. They don’t have to wait for many weeks or months to initially get approval for a mortgage to cover the cost of buying your property. As a result, they can cut the typical timeline for buying any type of home to just a handful of short weeks, and that includes the time it takes for you to receive the sale proceeds and exchange contracts.
As mentioned above, if you’re dealing with an honest fast buyer than you will not have to pay any commission for selling your prefab property. LDN Properties, for example, has always believed that the full proceeds from the sale of a house or flat should always go to the owner who is selling, and that’s why they charge no fees. This means you can count on receiving the full sale proceeds.
Another reason why many homeowners prefer quick buyers is that these companies will make competitive and swift offers to buy practically any property, including prefab houses and flats. They will not be deterred from purchasing a home just because it has a physical flaw, or bad location, or another element that could cause other buyers to lose interest completely.
LDN Properties, for example, have made and considered varied purchases that have benefited happy homeowners, including prefab houses, flats with cladding, properties where the owner cannot find the title deeds or other important documents, houses of multiple occupancy, flats that do not have an External Wall Fire Review form, homes that are close to unsightly mobile phone masts, properties that have extensive dry rot, inherited retirement houses, hotels, commercial buildings, plots of land, lock-up garages, listed properties, farms, blocks of flats, properties that do not have planning permission, vacant homes, and other scenarios.
Top queries and answers about selling a prefab house
Homeowners looking to sell their property fast sometimes have a few questions for us, ranging from the how to sell a home in poor condition through to how quickly a property can be sold. Here are a few of the main questions we’re asked about selling a prefab property:
Your top questions when selling a prefab property
You likely own a prefabricated, or prefab, property if it is made from non-typical construction material and was built soon after the end of the Second World War. These homes are built from structural parts that are assembled at a factory, then driven to a building site and erected. Whilst popular for many years, today there is an ever-decreasing number of these homes in the UK.
Possibly. There are many varieties of prefab properties, and some are considered more outdated and structurally unsound than others. Some mortgage lenders might not be willing to issue a loan for buying certain types of prefab houses or flats, because they’ll be worried that they won’t be able to sell the home and recoup their costs if the buyer defaults on the mortgage.
There are a number of benefits that a potential buyer could experience if they were to purchase your prefab home, including the fact that it might be a decent investment property that the new owner could then rent out to people. Another advantage of prefab homes is that because they were built so rapidly, many of the remaining houses and flats have very enviable locations.
Unfortunately yes, and not all of them are fair – such as the fact that some types of prefab homes have a stigma of being unsafe that is often not based in reality. Other buyers might be wary of investing in a property that was originally designed to have a short life span. And it can also be very expensive to find and pay for replacement parts if that becomes a necessity.
You should consider contacting a fast buyer such as LDN Properties, because they have ability to finalise the purchase of most homes in just a handful of weeks, and that includes paying you the proceeds and exchanging contracts. Selling through an auction will take at minimum a few months, whilst it make take more than a year when selling via an estate agent or on your own.
You might not have to pay any commission if you use a no-fee option for selling, such as contacting a quick property buyer or selling on your own. Estate agents and auctioneers, however, will make you pay commission.
Ask individual companies whether they are registered with a third party organisation known as The Property Ombudsman (TPO), which issues regulations that protect owners against fraud in the quick buying industry and that all TPO members are required to follow.
