Construction

Traditional construction

Many New Build homes are constructed using traditional, tried and tested methods, for example cavity brick/block and timber frame. High rise flats are usually constructed using concrete, steel frames and different forms of roof cladding (as opposed to the more standard tile and slate). All these methods are acceptable to The Mortgage Works.

Modern Methods of Construction

An increasing number of homes in the UK are being built using innovative materials and methods such as factory manufactured “pods”, steel and timber frames, roof and floor “cassettes”, 3D printing and changes to on-site processes (including the use of robotics). These products and processes are referred to as Modern Methods of Construction (MMC). Many properties built using MMCs can be considered to The Mortgage Works, subject to our criteria, valuation & suitable warranty. Our valuers will assess these on a case by case basis. We need to be sure that new methods of construction are sufficiently durable, easily maintained and will remain readily saleable in order to protect our customers.

Office to residential

At The Mortgage Works, we recognise that office to residential conversions are important to the new housing market. We'll consider them subject to certain criteria, such as design (appearance/internal layout/planning etc), tenure and lifespan. Other considerations we take in account when dealing with office to residential are:

Location

  • A suitable mix of residential use within the area
  • Sufficient residential infrastructure within the immediate area, for example, access to amenities/shops/schools/transport
  • Sustainable demand in a re-sale marketplace for home ownership
  • Any property forming part of a business/commercial/industrial/retail area aren't usually accepted.

Construction

Lease terms

Quality of conversion

  • Structural integrity
  • The external appearance of the structure, and whether it's been updated or modified to give the appearance of a residential building.
  • Fire safety and regulations should be complied with, particularly around the use of certain external cladding/insulation materials on high rise buildings, see below.

Cladding and balconies

Industry experts have created the External Wall System certificate (EWS1) which will assist with lending decisions where the property meets one of the following;

  • Any multi-storey/multi-occupied building where there are concerns in relation to external wall systems
  • Where there are attachments i.e. balconies considered to represent a fire risk
  • Where there are any other significant fire safety concerns.

We need certification from a fully qualified professional that the cladding meets the requirements where the valuer deems it necessary. The certification must be dated, on headed paper, include the professionals' qualifications and confirm that the buildings' cladding has been physically inspected.

If the certification isn't available at the time of valuation, the property will be declined, pending receipt of this confirmation.

Please note that the Department for Levelling Up, Housing and Communities’ (DLUHC) guidance around fire safety assessments only currently covers England and Wales. We’ll soon be using the same approach in Scotland.

For property owners in Scotland, it will be the responsibility of the building owner to ensure the signing firm is a member of one of the appropriate professional bodies detailed on the RICS website.

Builder deposits/cashback/incentives

The value of all incentives must be declared on the UK Finance Disclosure Form and the current version of the form must be used.

Standard purchase cases

  • Builder deposits, cashback and any other financial incentives (including vouchers) listed in Section 7 of the UK Finance Disclosure Form are acceptable on standard New Build purchases.
  • The maximum total value allowed is 15% of the purchase price or valuation*. If the total value is more than 15% of the purchase price or valuation*, the case will be declined.
  • When the total value is less than or equal to 5% of the purchase price or valuation*, we base our lending on the lower of the full purchase price or value.
  • Where the total value is more than 5% (but less than 15%) of the purchase price or valuation*, we deduct the amount above 5% from the purchase price or valuation*, which gives the net purchase price. Our lending is based on the lower of the net purchase price or net value.

Vendor cashback

  • Cashback on properties that have recently been (or are in the process of being) upgraded or converted into flats by a developer, are treated as Vendor Cashback (except if they're developing several properties on several sites at the same time).
  • We deduct the value of the Vendor Cashback from the purchase price or valuation*, which gives the net purchase price. Our lending is based on the lower of the net purchase price or net value.

*whichever is lower.