Hanley Economic sees self-build advances rise by over a third in 18 months.
Lending Criteria – Self-Build
Permitted Lending and Restrictions
Applications are acceptable for demolition and rebuild, and for renovation/conversion where the property is currently uninhabitable including barn conversions.
All applications are for owner occupier only, as an individual project and not part of a group development.
Investment properties are excluded.
Property should be at a minimum of wall plate level for Self-build or full structural overhaul including roofing and damp proof course in respect of a renovation.
Covered by an acceptable warranty provider.
Certified by the warranty provider and sign off certificates for each stage should be submitted with the application.
Retrospective warranty is not acceptable.
Duration of Project & Timescales
Work must commence within 6 months of mortgage completion.
All works must be completed and a final completion sign off received from the warranty provider within 2 years from the first date of funds being released, or 6 months following release of the final stage payment (whichever occurs first).
The definition of a second home is a property which will only be used by the borrower(s) for residential purposes e.g. holiday home, weekend home, future retirement property.
The property cannot be let out and cannot be in the same location as the current applicant’s residence e.g. properties within the same postcode are not acceptable.
Applicants will need to satisfy full affordability for 2 households.
Only 1 second home is acceptable.
Second homes are not permitted for Shared Ownership applicants.
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.
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.
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.
- Premier’s “Guarantee for New Homes” (minimum warranty term 10 Years)
- NHBC ‘Buildmark’ (minimum warranty term 10 years)
- Self-Build Zone (minimum warranty term 10 years)
- LABC Warranty (minimum warranty term 10 years)
- Architects Certificate (minimum warranty term 6 years)
- Building Lifeplans Ltd (BLP Allianz Guarantee)
- Castle 10 (Checkmate)
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
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.
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.
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.
All architects supervising the build must have professional indemnity cover of no less than £1m and one of the qualification below.
|ARB UK||Architects Registration Board UK (previously known as ARC)|
*only acceptable if also registered with the Architect’s Registration Board (ARB)
|Chartered Member/Associate/Fellow of the Royal Institute of British Architects|
|MCIAT||Corporate Member of the Chartered Institute of Architectural Technicians|
|MASI/FASI||Corporate Member/Fellow Member of the Architects and Surveyors Institute (excludes AMSI)|
|C. Build E MCABE/ C. Build E FCABE||Chartered Member/Chartered Fellow of the Chartered Association of Building Engineers (excludes A B Eng)|
|MICE/FICE||Member/Fellow of the Chartered Institute of Civil Engineers (Excludes AMICE)|
|FCIOB/MCIOB||Fellow or Member of the Chartered Institute of Building|
|MRICS/FRICS||Member or Fellow of the Royal Institute of Chartered Surveyors (RICS)|
|MI Struct Eng/FI Struct Eng||Chartered Member or Fellow of Institute of Structural Engineers|