Supporting you, supporting your new build clients
We know that buying a newly built home can be a big step for your clients and guiding them through it is a key part of what you do. That’s why we’re here to support you every step of the way.
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An initial occupancy/new build property is classed as any property being occupied and/or sold for the first time on the open market in its current state and includes converted and refurbished properties. These will fall into one of the following categories:
- Newly built property
- Refurbished property i.e. refurbishment of an existing residential property, typically a re-furbished property will be considered as initial occupancy where the vendor is a builder/developer and the property has been vacated to allow for the refurbishment to be undertaken
- Newly converted property i.e. conversion of an existing non-residential property, e.g. an existing mill converted into flats
- A property, either new or converted (as above), that has been tenanted and is now offered for sale by the builder/developer.
For properties classified as new build/initial occupancy, an appropriate building standards warranty e.g. NHBC or appropriate monitoring certificate provided by a suitably qualified consultant/architect will be required.
EWS1 and Cladding
For new build high rise blocks over 18m / 6 storeys in height (England & Wales) or 11m / 4 storeys in height (Scotland) Building Regulation compliance, The Building (Amendment) Regulations 2018 or local equivalent can be relied on, subject to the conveyancer receiving confirmation of this from the building owner, and/or its agent or duty holder. Where this cannot be obtained this EWS1 and Cladding criteria applies.
Modern Methods of Construction
The term Modern Methods of Construction can be described as a range of processes and technologies which involve prefabrication, off-site assembly and various forms of supply chain specifications carried out when constructing a property. This differs with other “traditional” building methods such as load bearing brick, block and masonry construction.
We are happy to consider Modern Methods of Construction within standard policy subject to the following requirements. The valuer will assess the suitability of the construction type for lending purposes and may require the conveyancer to confirm the existence of one or more of the following:
- Build Offsite Property Assurance Scheme approval (A suitable warranty is needed in addition)
- NHBC Accepts approval (a suitable warranty is needed in addition)
- LPS2020 (although no longer being provided) or a UK Agreement certificate for the system as a whole
- 60 year minimum design life at point of completion assessment, tested by a British accredited body i.e. British Board of Agreement (BBA) / Building Research Establishment (BRE).
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Loan to Value table Application
House/Bungalow
Flat/Coach House
Application
Standard Residential
House/Bungalow
95%
Flat/Coach House
85%
Application
Newly converted/refurbished properties e.g. offices converted to flats
House/Bungalow
80%
Flat/Coach House
80%
Application
Shared Ownership (% of customer share)
House/Bungalow
95%
Flat/Coach House
95%
Application
Shared Equity (% of customer share)
House/Bungalow
95%
Flat/Coach House
95%
Application
First Homes
House/Bungalow
95%
Flat/Coach House
95%
Application
Resale Price Covenant/Discounted Market Scheme
House/Bungalow
95%
Flat/Coach House
85%
Application
Second Home Loan
House/Bungalow
75%
Flat/Coach House
75%
Normal maximum lending limits will also apply based on loan amountNormal maximum lending limits Loan amount
LTV
Loan amount
Up to £570,000
LTV
95%
Loan amount
>£570,000 - £750,000
LTV
90%
Loan amount
>£750,000 - £2,000,000
LTV
85%
Loan amount
£2,000,000 - £5,000,000
LTV
75%
Product information
- Homemover or First time buyer products are available for new build purchases.
- New Build specific products with extended latest completion dates may also be available.
- Check if a Green Home incentive product is available based on the property’s EPC rating.
- For Shared Ownership, Shared Equity and Resale Price Covenant (RPC) schemes Affordable Housing products must be selected.
- For First Homes scheme specific First Homes products must be selected (for remortgages Affordable Housing remortgage range applies).
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Builder financial incentives will typically be acceptable provided the mortgage amount plus incentives does not exceed the relevant maximum loan to value (LTV).House/Bungalow
- Maximum LTV without incentive = 95% LTV
- Mortgage plus incentive cannot exceed 95% LTV (including any product fee being added to the loan)
Flat/Coach House
- Maximum LTV without incentive = 85% LTV
- Mortgage plus incentive cannot exceed 90% LTV
Shared Ownership/Shared Equity/First Homes
- Maximum LTV without incentive = 95% LTV
- Mortgage plus incentive cannot exceed 95% LTV on customer share (including any product fee being added to the loan)
Acceptable incentives
Financial incentives should be included within the mortgage plus incentive calculations as described above. Non-financial incentives do not need to be included.
Other Financial or Non-financial incentives can be considered where they differ to the typical types we see.
Financial incentives
- Cash or cashback
- Deposit
- Stamp duty
- Legals
- Estate agents fees
- Mortgage subsidy
- Guaranteed rent
- Removal costs
Non-financial incentives
- White goods
- Carpets and curtains
- Options vouchers
- Part exchange
- Solar panels
- Battery storage
- Electric vehicle charging point
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All new build properties when being purchased for the first time must either have an acceptable warranty or a professional consultant's certificate.
Properties must be monitored during construction. Warranties issued retrospectively are not acceptable.Acceptable Warranty Providers:- ABC+
- Advantage HCI
- Ark Insurance
- Build Assure
- Building LifePlans Ltd (BLP)
- Buildzone
- Cadis
- Checkmate
- CIR
- Compariqo
- FMB Insurance
- Global Home Warranties
- Homeproof (previously Aedis)
- International Construction Warranties (ICW)
- LABC Hallmark Scheme
- NHBC
- One Guarantee
- Premier Guarantee – includes the LABC New Homes Warranty and LABC Hallmark
- Scheme
- Protek
- Q Assure Build
- Thomas Miller
Where an acceptable warranty provider is not shown on the drop-down list in the Halifax Intermediaries Online system, ‘Other’ should be selected.
Monitoring by Professional Consultant Certificate
For the property to qualify as one acceptable for monitoring by a consultant it must be either:
- a single detached property
- a property built by a self-build group
- a property forming part of a small solely residential development comprising not more than 15 units (If flats/maisonettes are involved, each individual flat/maisonette counts as one property).
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A summary of available schemes is below. For further information on restrictions and scheme requirements please refer to Affordable Housing Schemes Guidance Notes (PDF). Each scheme is also included in our Criteria section.
Shared Ownership
Shared ownership allows a customer to buy a home in stages. We will lend on Shared Ownership schemes that are administered by a council, local authority or a registered social landlord (RSL). We accept purchase and remortgage applications under this scheme.
Availability
- Up to 95% LTV of the customer’s share for both houses and flats.
- Minimum 5% deposit or £4000 whichever is greater.
- 20% minimum share for new build properties.
- 25% minimum share for existing properties.
- The maximum loan to income (LTI) is 4.49x.
- Maximum loan £500,000.
- Staircasing available to increase customer share in property.
Shared Equity
Shared Equity is a loan from a Local Authority, Housing Association or the Government, the value of which is a percentage of the property price at time of purchase, rather than a fixed amount. Customers agree the purchase price as normal, but only fund part with a deposit and mortgage, if required. The remainder is funded by the Shared Equity provider, secured by a second charge.
Availability
- Customer must always provide a minimum personal deposit of at least 5%.
- The equity loan must be a minimum of at least 10%.
- The mortgage must be a maximum of 85%.
- The maximum loan to income (LTI) is 4.49x.
- Maximum loan £500,000.
- Term of the equity loan must be longer than the mortgage term.
- Remortgages accept repayment of all or part of the equity loan.
- Equity loan provider must agree to additional borrowing prior to submitting an application.
First Homes
First Homes allows First Time buyers to purchase a New Build property at a discounted purchase price under a Resale Price Covenant. The discount must be passed on if the property is sold in the future.
Availability
- All applicants must be a First Time Buyer.
- In England only.
- Maximum initial purchase price, after discount is £250,000 (£420,000 in London).
- Minimum discount 30% but Local Authorities can increase up to 50%.
- Maximum household income of £80,000 (£90,000 in London).
- Up to 95% LTV of the discounted purchase price for both houses and flats.
- First Homes scheme specific products must be selected (for remortgages Affordable Housing remortgage range applies).
Resale Price Covenant (RPC) and Discount Mortgage Scheme (DMS)
Resale Price Covenant has similar characteristics to First Homes scheme. The customer acquires a 100% ownership of the property at a discounted price and the seller does not retain any percentage or own a share of the property. The discounted purchase price us provided by way of the property being subject to a “Covenant”, contained in the Section 106/75 planning agreement. This is a restriction to ensure that the “Discount” is always passed on to future buyers.
Availability
- Minimum 5% personal deposit is required.
- No limit on the percentage discount of the market value.
- Affordable Housing scheme specific products must be selected (for remortgages Affordable Housing Remortgage range applies).
- New Build Houses up to 95%.
- New Build Flats up to 85%.
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