This section of the site gives you details of our property and construction lending criteria:
Property and construction
Construction types
| Construction types | Lending terms |
|---|---|
| Traditional Construction (Normal lending terms apply) |
Walls
Roof
Spray Foam Insulation If spray foam insulation has been fitted in the wall voids of the property, then the valuer will decline the property. The valuer will decline the property at first, where spray foam has been installed in the rafters, frame, and/or underfloor structure. However, we'll reconsider with evidence of either: Confirmation the installation of the foam is in accordance with the manufacturer’s recommendations, and
Or A Chartered Building Survey (FRICS or MRICS qualified) should be instructed to undertake an invasive inspection. They'll need to report on the frame integrity. Where it requires remediation or foam removal work, you will need to include an estimated cost. |
|
Non -Traditional Construction |
There are many properties built using a variety of other construction methods. Lending terms vary depending on construction types and if a repair scheme, where appropriate, has been used. Please contact your usual Service Centre where a property is of non-traditional construction with the following details for further advice:
The exact construction name is important as lending terms may differ between different types and year built. For example, our lending terms differ between Gregory, Gregory Drury System 3 and Gregory Housing. All three have different lending terms, and it is important to ensure you give us the full and accurate name to avoid us giving incorrect advice. |
|
Modern Methods of Construction |
We're supportive of development schemes which incorporate Modern Methods of Construction (MMC). Although an MMC scheme must display sufficient robustness, technical rigour and suitability for its location. Due to the wide and changing range of products in the market, we now treat independently each development (not system). Please provide the full information below to enable us to consider your development:
|
| Solar Panels |
We'll lend on a security with an Airspace Lease providing it meets the minimum requirements documented in the UK Finance Lenders' Handbook. Or where the vendor owns the panels. Other arrangements are not acceptable. |
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Duplex Properties |
The word duplex can be used to denote several property types. Below you can see the circumstances for each one: It can refer to a specific structure type e.g. Duplex Foamed Slag. Maisonettes are where there are two leasehold properties each covering two storeys in a block of four storeys. However, in some developments they are referred to as duplex houses/maisonettes. These buildings can sometimes be known by the name of "Over and Under" properties. They were built up to four or five storeys high in steep hillside terrace form, on a similar arrangement to maisonettes, with each property having ground level access. Some involved back to back arrangements. Construction is normally of stone and quality of construction varies from poor to very good. Essentially these properties are flying freeholds, and normally would not form an acceptable security for the Society. However, the Society will accept these Duplex properties provided the following procedures are strictly adhered to:
The valuer has strict criteria to judge that the Duplex properties are acceptable. |
|
Japanese Knotweed |
We will consider properties with caution any Japanese Knotweed growing within the vicinity. They will be subject to the following terms: If Japanese Knotweed is:
Then the applicant will be required to obtain a specialist report in respect of eradicating the plant. This will include an insurance backed 5-year warranty against re-appearance of the plant. If necessary, we'll require repairs to the property and services for the valuer to make a full assessment of the property's suitability. However, if Japanese Knotweed:
Then we'll require written confirmation from the applicant confirming that they're aware of the presence of this invasive plant. And that it could have adverse effects on the property should it spread closer. The applicant should seek their own independent professional advice regarding the risk this plant might impose. |
Lending for flats
| Flat type | Criteria |
|---|---|
|
Non New Build |
The maximum LTV on non New Build flats (with a minimum lease term of 90 years) is:
|
|
Blocks of flats up to |
All flats in blocks and Scottish tenements not exceeding five storeys* in height, will be acceptable at the discretion of the valuer. This is subject to the valuer accepting the guidelines and restrictions on non-traditional construction. The instructed valuer will then report on whether the flat satisfies our requirements in terms of construction, marketability and any other associated matters. Flats in blocks over 4 storeys high should have a lift. This also applies when the subject flat is on the lower floors. We can make some exceptions, but this is subject to marketability and valuers’ recommendation. *Five storeys means a ground floor with four floors above, ignoring any basement. |
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Flats over five |
We won’t accept former local authority flats in blocks of more than five storeys. Or maisonettes and Scottish tenements in blocks of more than five storeys that were, or still are in local authority ownership. |
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Flats in the same |
The acceptability of a flat in the same block as commercial properties will depend on:
These are in addition to the usual construction and marketability criteria. We recommend you contact us with as much information as possible at enquiry stage. This will allow us to contact a valuer for advice before issuing formal valuation instructions. The valuer must consider the majority of the flats in the block to be suitable securities for us to lend. |
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Coach house |
Coach house flats are acceptable subject to a satisfactory valuation. A coach house flat is a freehold flat, which is:
|
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Freehold flats and |
In general, we won't accept:
For most cases described as a 'freehold flat' there is usually no lease on the occupied flat. And the occupier of the flat will most likely be the freeholder of the whole block. Acceptable
Unacceptable
|
|
Studio flats |
Studio flats are acceptable to Nationwide with no minimum floor area requirement. This is subject to marketability and valuers’ recommendation. |
Building warranties
When a new property is built, the developer will provide a guarantee to ensure the building has been constructed to a standard set by the warranty provider. This is to ensure that any issues related to the property post-completion are covered by an insurance policy. It's unlikely that any mortgage provider will lend on a property without a warranty.
At Nationwide, the Building warranties we'll accept include:
- NHBC
- LABC
- Build-zone
- Premier Guarantee
- One Guarantee
- CADIS
- ABC+
- Build Assure (New Home Structural Defects Insurance)
- Checkmate's Castle 10 (where out buildings such as a detached garage are also being constructed, an endorsement to include these in cover is required).
- Global Home Warranties (Structural Defects Insurance)
- The Q Policy for Residential Properties (provided by Q Assure Build)
- The Q Policy for Bespoke Properties (provided by Q Assure Build) - detached only
- International Construction Warranties (ICW) - an endorsement will be required to include it in the cover, if the property has a flat roof greater than 10 square metres.
- Ark Residential New Build Latent Defects Insurance - where a detached garage/outbuilding has been constructed at the same time as the main building, the policy must include an endorsement confirming cover for the detached garage/outbuilding.
- Advantage
- Homeproof (formerly Aedis)
- BLP - formerly known as Building Life Plan (excluding self builds under construction). These policies are underwritten by Allianz Global but written by BLP.
- Protek
- TMSC
- Professional Consultant's Certificate (PCC) issued by an Architect/Surveyor. The Certificate is checked by the solicitor and must comply with the requirements of the UK Finance Lenders Handbook.*
- CRL - This company is no longer issuing policies. We do accept the New Build 10 year structural defects insurance policy for residential property.**
* PCCs are acceptable for newly built homes within a development of no more than 10 units. A maximum of 4 units within the structure where they're within a continuous structure. For example, a row of terrace houses or block of flats. We'll require a PCC for newly converted or homes which have recently been significantly altered or refurbished. Retrospective certificates by a professional who has not supervised the project from the start and inspected the build at regular intervals are not acceptable.
** Nationwide will only accept a CRL New Build 10 year structural defects insurance policy in the following circumstances:
- The final certificate is dated 04/09/2019 or earlier, and the underwriter is International General Insurance Company (UK) Ltd (IGI) or CGICE
- The final certificate is dated 05/09/2019 or later, and the underwriter is International General Insurance Company (UK) Ltd (IGI) and the final certificate has been signed by Ark Insurance Group Ltd. Arks final certificates are titled: ‘10 year Structural Defect Insurance Policy’. All final certificates signed off by Ark are proof that the warranty is acceptable.
We won't accept the warranties in the following circumstances:
- On New Build properties underwritten by Alpha.
- Non New Build properties being sold by first or subsequent owner and properties under five years old, with the warranty underwritten by Alpha.
- Retrospective certificates by a professional who hasn't supervised the project from the start and inspected the build at regular intervals.
If another building warranty has been issued that's not listed above or you have any questions, please contact the New Build support team.
Tenure
The maximum LTV on non New Build flats (with a minimum lease term of 90 years) is 95% for purchases and 90% for remortgages.
We'll lend on:
- Freehold - houses and bungalows
- Leasehold (including good leasehold title)
- Commonhold
- Ownership (Scotland)
- Flying Freehold (subject to confirmation from the valuer that the property is suitable security)
Minimum Leasehold Terms
| Criteria | |
|---|---|
| England and Wales |
Flats and Houses - we require a minimum unexpired lease of 55 years at application. This along with a minimum unexpired lease term of 30 years after mortgage term ends. Where your client is looking to purchase a new longer lease or lease extension, we'll process the application using the details of the new/extended lease. We'll allow lease extensions on new and existing lending, if it's completed under the Leasehold Reform Act. |
| Northern Ireland |
Flats and Houses - a minimum unexpired lease term of 50 years after mortgage term ends. We'll only accept Local Authority flats/maisonettes where the Lease term is:
|
|
Scotland |
Flats - a minimum unexpired lease term of 50 years after mortgage term ends. Houses - refer to your usual Service Centre. |
Higher LTV criteria
If you're submitting an application for lending greater than 85%, please see our Higher LTV criteria and tips page for more details.
Tyneside leases
Where there’s only two flats in the building, an agreement known as a Tyneside lease may be in place. Under this, the two owners are each other's landlord and tenant.
This allows one owner to keep all the lease term agreements against the other, which is a basic requirement for leasehold properties.
These flats are acceptable as leasehold securities.
Lease Terms
- The valuer must be satisfied that there is a market for any property taking the lease term into consideration.
- Although an application may meet the guidelines above, the valuer may decline the property. For example a mortgage application in England for a 20-year term with a 56-year unexpired lease within policy. The valuer may advise the property is not readily marketable and saleable. In this instance we won't consider the property as suitable security.
- The valuer must confirm that there is a market for any property, taking into account the lease terms, which must be reasonable.
- Where the valuer believes the lease terms will impact the marketability. They may reflect this in their valuation, For example:
- Some lease terms will severely impact marketability that they will result in the decline of a property. For example:
- where ground rent is greater than or equal to 0.5% of the property value. Or where the review period is less than or equal to 5 years.
- where ground rent doubles in less than 20 years (e.g. every 5, 10 or 15 years). Or escalates by compounded RPI.
For lending restrictions, please see our Maximum LTV and loan for New Build properties section for detail.
These examples aren’t exhaustive. The solicitor is expected to refer back to us any lease terms they feel may affect the value or future sale ability of the security.
Service Charges greater than 1% of property value per annum will be referred to the valuer.
Please note: there are different limits for acceptable New Build Lease Terms. See our New Build page for detail.
Part Commercial Properties
| Type of Property | |
|---|---|
| We can accept some part commercial properties on normal residential terms (subject to a satisfactory valuation) |
We won't lend on residential terms where any part of a property has one or more of the following commercial uses: |
We'll accept where the business income is required to support the mortgage (subject to it satisfying our normal underwriting requirements). |
|
For part commercial properties not covered above
Contact your New Business Service Centre to find out if the property is suitable for a residential valuation.
Properties with Large Acreage
- The applicant must use the entire property or land for their own residential purposes.
- We'll give special consideration to large acreage/properties.
Estate Charges
- Estate Rent Charges or Estate Management Charges can apply to freehold or leasehold properties.
- Charges must be reasonable at all times. Where charges are greater than £500 per annum, you'll need to advise us what the charges cover. This is so the valuer can assess whether there's any change to the valuation.
Geographical Area
We'll lend to the following areas
| UK Mainland |
Properties in mainland England, Wales, Scotland and Northern Ireland. |
|---|---|
| Scottish Islands |
We'll consider Mortgage applications on Scottish Islands for properties located on:
Individual consideration will be given to properties on the following Scottish Islands:
|
We will not lend to any Scottish Islands not included in the above list or the below islands
- Isles of Scilly
- Channel Islands
- Eire (Southern Ireland)
- Isle of Man
Fire safety assessment
All Multi-storey/multi-occupancy buildings under 11 metres (or 4 storeys or less) in UK and 11 metres or more (or 5 storeys or more) in Wales, Scotland and Northern Ireland
They’ll decline the property pending receipt of an EWS1 form. Where a valuer has cladding or non-cladding fire safety concerns with external wall systems, attachments (e.g. Balconies), or any other significant fire safety concerns.
The form must be:
- obtained from the building owner (property owner in Scotland). The ‘Client organisation’ on the form must be the building owner. We won't accept it in the name of the applicant/client.
- fully completed and accompanied by a headed paper letter from the signing firm which details
- their area of business
- qualifications
- confirmation that they've completed the form.
It's the duty of the building owner to ensure the signing firm is a member of an appropriate professional body. See the RICS website for more information.
The specialist will complete the form and select either ‘low risk’ or ‘high risk’ and will then choose a rating of either:
- A1, A2 and B1 - we’ll send the form to the valuer for assessment. If accepted they’ll provide an amended valuation report.
- A3 or B2 - we’ll assess the case and let you know our decision. We may request confirmation from the building owner about the remedial building work required. And who’ll be liable for the cost of those works. For Scotland, we'll require confirmation from the building factors/managing agents acting for the co-proprietors.
For all application types where the building owner will cover the remedial costs, we’ll require confirmation in writing from the building owner that:
- you will compile the EWS1 requirements and render the building fire safe (i.e. fall within the definition of A1, A2 or B1) on completion of the remedial works.
- the interim fire safety measures are satisfactory.
- you will not pass on costs or hidden charges to the leaseholder (e.g. via service charges).
- remediation will take place within a reasonable timescale (12 months).
Where remedial costs fall to individual leaseholders/flat owners
For remortgage and purchase, as long as the building owner’s solicitors confirm in writing, we’ll consider applications where the owner has paid for and planned/started remedial works. We’ll decline any applications if remedial works have not yet been paid for or planned/started.
For further advances, we’ll consider applications if the funds are being raised to carry out the required remedial works. We'll require further information from the building owner in order to make an assessment, including:
- the compiled EWS1 requirements rendering the building fire safe (i.e. fall within the definition of A1, A2 or B1) on completion of the remedial works.
- confirmation the interim fire safety measures are satisfactory.
- a summary of the remedial works required and when the works will take place.
- costs the leaseholder/flat owner is liable for and when the required funds are due to be paid to the freeholder.
All multi-storey/multi-occupancy buildings 11 metres or more (or 5 storeys or more) in England
With the Building Safety Fund (and other Government/non-Government schemes), and the RICS updated guidance in relation to the assessment of multi-storey/multi-occupied buildings over 11 metres/5 storeys in England, our mortgage valuation criteria is as follows:
- Where a valuer has cladding or non-cladding fire safety concerns with external wall systems, attachments (e.g. Balconies), or any other significant fire safety concerns, they’ll decline the property. This is pending receipt of the following, which must come from the ‘Responsible Person’ i.e. Building Owner and/or Managing Agent:
- An Executed Leaseholder Deed of Certificate and Landlord Certificate (where they will remediate* in full the building under a Developer/Government/Freeholder Scheme. We won't require these certificates, but you will still need all other documentation below.
- Confirmation of any costs and amounts not covered by the Building Safety Fund or other Scheme (i.e. Capped/non-capped charges).
- Confirmation of interim fire safety measures.
- One of the following:
- Confirmation from the ‘scheme provider’ that they will remediate* the building under a Developer/Government/Freeholder Scheme, or
- A Fire Risk Assessment of External Walls report (FRAEW) with an indicative rating or
- An EWS1 form**, or
- A letter stating why none of these are available.
OR
- A signed letter confirming:
- There are no fire safety issues.
- They have complied the requirements of the Building Safety Act 2022. And they have either an A1/A2/B1 rated EWS1 form or a Fire Risk Assessment of External Walls (FRAEW) report which confirms no work required.
- There are no fire safety costs for the leaseholder to pay.
* Where there are plans for remediation, it will need:
- Confirmation of whether there is requirement for remediation or mitigation. We only need a brief summary.
- Confirmation of source of funding (including Remediation Order or Remediation Contribution Order).
- Proposed/forecasted start/end dates.
** EWS1 forms must be:
- obtained from the building owner. The ‘Client organisation’ on the form must be the building owner. We won't accept it in the name of the applicant/client.
- fully completed and accompanied by a letter (on headed paper) from the signing firm. It must detail their area of business, qualifications and confirmation that they have completed the form.
It's the duty of the building owner to ensure the signing firm is a member of an appropriate professional body. See the RICS website for more information.
New Build fire safety assessment
On 21 December 2018, The Building Regulations 2018 banned the use of flammable materials on new high-rise homes. Any buildings started after 21 February 2019 should not contain flammable material.
We require an EWS1 form for any New Build designed/constructed under the old regulations. This is regardless of storey height. For example, where there are concerns around wall systems and attachments.
We won’t require an EWS1 form for New Builds that have been/are being constructed in compliance with The Building Regulations 2018. Unless upon inspection, the valuer has concerns regarding other elements of fire safety.
We'll speak to the Developer/Sales Agent. If the valuer can’t confirm that the latest Building Regulations apply, we'll decline the mortgage valuation report. This is pending confirmation from the Building Owner/Developer/Conveyancer whether it’s compliant with The Building Regulations 2018.
Read more about New Build construction
Valuation
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