Lending Criteria – Custom Build

<–Back to Criteria Home

Definition

Custom build is defined as sites with multiple plots with a common developer and a common builder.

Borrowers buy individual plots once services have been installed and foundation stage is complete (golden brick level).

The build can be bespoke to the borrower’s requirements providing this is within the guidelines agreed by the developer, with planning rules and conditions and within the footprint of the property.

A full description of the development site is required.

<– Back

Restrictions

• The Society will not be the first funder on any one site.
• The Society will require full evidence of the warranty provider, and certification for plots that are under construction, irrespective of the stage of development.
• Works on the plot must have reached a minimum of foundation stage – “Golden Brick”
• Individual plots are accepted only once services have been installed – Valuer to confirm.
• The Society reserves the right to restrict the amount of properties on each site.
• Custom Builds which a subject to a buy back clause are unacceptable.

<– Back

Construction

Terrace, Semi Detached and mews type properties are not acceptable.

<– Back

Retaining the Existing Property/Renting during the Build

Where an applicant wishes to retain their current mortgage/renting during the self-build project the following applies:

• Ongoing mortgage payments will be included for the purpose of affordability & income multiples.
• Ongoing Rent payments will be excluded from affordability & income multiples.

Monthly rental payment and Mortgage payments must be declared on the application form and on the IAA forms.

IAA will record the current monthly payment at the pay rate

Income multiples will record – Monthly mortgage payment, annualised (x12) and taken off the income before multiples are applied.

<– Back

Use of Specialist Advisors/Project Managers

The Society will require the borrower to use specialist advisors/project managers with experience and who will help to keep control of costs. Full details should be provided with the application.

<– Back

Site Insurance Minimum Requirements

A copy of the insurance schedule is required to include the following:-

• £5 million public liability
• £10 million employers’ liability
• Contract works (for the re-instatement value)
• Hanley Economic Building Society to be noted as mortgagee

<– Back

Planning Permission

Outline only is required to enable the purchase of the plot.

Outline planning permission should have at least 12 months to run from receipt of the application.

Detailed planning permission should have at least 12 months to run from receipt of the application.

<– Back

Building Regulation

Copies of Building Regulations are required for all self-build, conversion and renovation projects. The society does not accept a Builders Notice as suitable approval for the works carried out.

<– Back

Interim Valuations

The Society reserves the right to carry out interim valuations during any stage of the build/renovation.

Valuations will be carried out at each stage release.

Stage releases are made in arrears during the construction of the property against a valuation at every stage.

<– Back

Acceptable Certifying Professionals

Professional Qualifications.

All architects supervising the build must have professional indemnity cover of no less than £1m and one of the qualification below.

<– Back