As the local area continues to become a virtual ‘new homes exhibition’, there are a number of lenders also assisting customers with more private projects such as development, self-build, or if you just want to upgrade your existing property by way of refurbishment.
On a self-build, the customer normally buys the land and the lender will issue the funds to build, on a stage basis. Normally once the foundations have been laid, property built to eaves level, made watertight and so on. At each stage a valuer will review and advise the lender of progress and to enable the release of payments. You will tend to find the lender will lend on the Gross Development Value (the end value).
On a full refurbishment, again, the lender will want to know the plans and may lend in stage payments against the end value of the property, depending on the extent of the works involved. They will almost always require a schedule of works – extension plans, kitchen, bathroom, etc.
The lender will require sight of all planning permissions and estimates of costs involved before lending any funds. Seek out a local architect to assist you with plans and costs and always make sure you set out accurate budgets from the outset.
Lenders will cater for all types of scenarios (dependant on the exact type of works required!). Each lender will work on the valuers comments once they have visited the property and adjust their offerings accordingly. Just because the high street or your current lender says no, does not mean that it can't be done!
Have you heard of the Tipton Building Society? What about the Saffron, Harpenden, Principality, Dudley, Furness, Shepshed, or the Stafford Railway Building Societies? Not necessarily household names, but we are seeing these names and a lot more like them launching innovative products. Not always looking for huge volumes but looking to fill gaps in the market and this should be applauded.
A good broker will, in most cases, have a relationship with these types of lenders, understand their requirements and ensure all the correct information is submitted from day one. There really is no better time to utilise the expertise and staffing levels they can provide for you in what’s becoming an over informed and more recently, highly competitive market place.