Property types

We'll consider lending you money to buy different types of old and new property, purpose-built flats or conversions, or a property you're buying outright or under an approved shared ownership or shared equity scheme. We'll also consider an application to buy a property that you want to rent out to someone else. We may ask you to provide a bigger deposit on some types of property than others. Any loan we make is subject to a property valuation.

Freehold

If the property is freehold, then you will own the property and the land it’s built on. We don't lend on freehold flats in England and Wales or Northern Ireland.

Leasehold

If the property is leasehold, then you will own a temporary right to occupy the property and the land it’s built on. The property and the land are owned by someone else and they lease them to you for a number of years. Leases can last for decades or centuries. There is usually an annual charge for the lease, called a ground rent and sometimes there may also be service charges.

We'll only lend on leasehold properties with at least 70 years left on the lease when you apply. Before you buy, your conveyancer will check the lease terms to make sure they are acceptable.

In Scotland (except in rare cases where there is a form of long lease known as a 'tack') all properties are owned outright by the 'registered proprietor'.

Self-build

We are no longer accepting new applications for self-build mortgages. If you are interested in taking out one of these products, please find an alternative provider at www.unbiased.co.uk.

If you are currently a self-build mortgage customer and have any queries on your account, please get in touch with us on 0345 850 3705. Lines are open from Monday to Friday 8am – 8pm and Saturday 9am – 4pm.

Worked example expandable section

Example:

Estimated value of finished property: £260,000
Cost of construction: £120,000
Total loan amount: £169,000 (65% of £260,000)

Worked example
Stage	Action	Valuation	Maximum amount we will release	Total Maximum Loan
Stage 1	Action Land bought for £100,000	Valuation £100,000	Maximum amount we will release £75,000	Total Maximum Loan £75,000
Stage 2	Action Footings and foundations complete	Valuation £120,000	Maximum amount we will release £15,000	Total Maximum Loan £90,000
Stage 3	Action Walls constructed	Valuation £160,000	Maximum amount we will release £30,000	Total Maximum Loan £120,000
Stage 4	Action Roof on	Valuation £220,000	Maximum amount we will release £32,100*	Total Maximum Loan £152,100
Stage 5	Action Completion	Valuation £260,000	Maximum amount we will release £16,900	Total Maximum Loan £169,000

*At stage 4, although 75% of the interim value would enable £45,000 to be released at this point, 10% of the loan will be retained until the property is fully complete.

Any builder you use to build your property must be registered with an acceptable Building Standards indemnity scheme, or the construction must meet our current monitoring requirements.

You'll need specialist insurance during the construction. You must seek advice from an insurance specialist on this.

New-build or converted properties

A new property or a property that has been built or converted within the last ten years should be part of a Building Standards indemnity scheme. This gives a ten-year warranty against material defects. There are a number of acceptable schemes, but the main one is run by the National House-Building Council (NHBC).

We'll consider lending on a property that is not part of one of these schemes if it comprises of a development of no more than 15 properties and meets our current monitoring requirements.

Shared equity

This can take various forms. Usually you own 100% of the property but pay a reduced amount to the builder, for example 75% of the property value. You own 100% of the property so there is no rent to pay. The builder holds a 25% stake in the property and registers this interest in your property at the Land Registry.

At a later date, when you can afford to, you can buy the remaining 25% from the builder at a cost of 25% of the value of the property at that time. If you decide to sell the property, you must give the builder 25% of the sale proceeds.

Shared ownership

Shared ownership schemes are usually offered by registered social landlords or local authorities. With this type of purchase you buy a share of a property, say half, and pay a reduced rent for the rest to the registered social landlord or the local authority. The share you first buy may be as little as 25%, but if you wish you may be able to buy more shares later until you own the property outright.

Right to Buy

If you rent your home from your local authority or a registered social landlord, you may have the Right to Buy your home under certain conditions set out by your landlord. You may be able to buy your home at a discount to its market valuation. The discount is usually based on the property value and how long you've been a tenant.

Buy to let

A buy to let mortgage is a loan you can take out to buy a property that you intend to rent out to tenants. The most you can borrow is linked to the amount of rental income we think you could earn. Taking out a mortgage is one of the many risks of investing in buy to let properties. So before you enter the market you should be an experienced house buyer and have fully researched investment properties.

These mortgages aren't available to first-time buyers or applicants under the age of 25. At least one person named on the loan must currently own a property in the UK.

To get an idea how much you could borrow on a Buy to let mortgage, visit our mortgage calculator.

You could lose your home if you don’t keep up your mortgage repayments