Suitable for:
People looking to build their own residential property in Scotland and the North of England. We’ll not normally consider applications where construction of the property has already commenced.
Loan amount and loan to value
Loans from £30,000
Maximum loan of £1,000,000 at max LTV 60%
Maximum loan of £800,000 at max LTV 70%
Maximum loan of £600,000 at max LTV 80%
We’ll lend up to 80% of the total cost of the land and construction cost or final property valuation (whichever is lower) with a maximum of 60% for the initial release based on the land alone. The value of the land, if already owned and debt free, may be included in the borrower's contribution. We would normally expect to see a cash contingency of 10% of the total build costs to be available.
Property
Properties may be constructed by either:
- A single build on a fixed price contract, or
- on an all trades basis under direction of a suitable qualified project manager
Important to know
Available for properties in Scotland and the North of England
Staged funding arrangements to meet the applicant’s requirements
No bridging loan required
Payments are released in arrears
On completion of the build, customers can switch to our other mortgage rates on offer at that time, even within the Early Repayment Charge period
Applicants must be at least 18 years old on application and normally not more than 85 at end of mortgage term. Minimum mortgage term is 5 years and maximum term is 40 years.
Funds are released in stages after each section of work is complete.
The list below is a typical example of how this might happen but we can be flexible, depending on the type of build and the applicant’s circumstances:
- Purchase of land (when full planning permission is in place)
- Foundations laid
- Up to eaves level
- Wind and watertight and roof tiled
Plastered Out (electrics, joinery, plumbing & external work complete)Completion (internal fittings complete i.e. kitchen, bathroom and central heating installed.)
Each tranche of funds is released when confirmation is received from our valuer that the stage has been completed to a satisfactory standard. If the construction is being supervised by an architect, they’ll also need to issue an interim certificate. The architect will need to confirm the build in on track to complete within the agreed build cost.
The initial release granted on land will be a maximum of 60% of the value of the land at the discretion of the Society, though on occasion it may be appropriate for the Society to consider a lower initial LTV given the location of the property.
The property build must be carried out by a builder registered with the National House Building Council (NHBC). Alternatively, the build must be covered by NHBC Solo or the borrower must employ an architect or RICS qualified surveyor with professional indemnity insurance to supervise the build. Your Business Development Manager can give you full details.
If the build is on an all trades basis we’ll require a suitable professionally qualified project manager to supervise the project and budget.
The first instalment can be made available when land is purchased and can be up to 60% of the plot value or purchase price – whichever is lower. The borrower then has the flexibility to negotiate instalments during the construction period, providing the outstanding loan is not more than 80% of the current valuation or build costs to date, whichever the lower.
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All mortgage applications are based on affordability.
- For loans less than 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
Single applicant: 4.5 x income
Joint applicants: Main income x 4.5 plus second income x 1 OR Joint income x 4 - For loans over 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
Single applicant: 4 x income
Joint applicants: Main income x 4 plus second income x 1 OR Joint income x 3.75
Our flexible underwriting means we assess all applications on an individual basis. We’ll carry out an assessment of r net income and outgoings to make sure the mortgage is affordable. Any existing financial commitments will also be taken into consideration when we calculate affordability
- For loans less than 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
- Capital and Interest
- Interest only - available up to 75% of the property value. When applying, we’ll need confirmation that plans are in place to pay off the mortgage at the end of the term and we’ll ask about these plans occasionally throughout the mortgage term. Examples of these plans are normally endowment policies; stocks and shares ISAs; pension lump sums; and second/investment properties.
Check our current interest rates.
Security
A Standard Security will be taken over the property as security for the mortgage borrowing.
Early Repayment Charges
If overpayments of 10% or more of the loan amount are made in any 12 month rolling period during the initial period, and depending on which mortgage your client has, the charges apply as follows:
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For our 3-year mortgage, the charge will be equivalent to 3% of the outstanding balance amount in year 1 and 2 and 2% in year 3.
After the initial period, the Society will not make an early repayment charge if the mortgage is on Standard Variable Rate and is repaid. However, there will be certain redemption fees that will need to be paid (see our details of charges leaflet for more information).
Insurance
Before releasing funds, we’ll need evidence of specialist self-build insurance if the applicant intends to build a new build home, or renovate or convert of a property intended for occupation on completion.
Packaging requirements
Check our packaging requirements for full details of documents needed for mortgage applications.