Property and construction

This section of the site gives you details of our property and construction lending criteria:

Construction types

Traditional Construction

The following are regarded as traditional construction and normal lending terms apply:

Walls

  • Cavity outer walls of brick/reconstituted stone/block (including rendered walls) with inner walls of brick or block.
  • Timber framed property with outer walls of brick/reconstituted stone/block (including rendered walls), built 1970 or after.
  • Solid stone (eg limestone, granite).
  • Cob - or any regional variant (for example cobb, clom and Wychert).

Roof

  • Tile (concrete)
  • Slate
  • Thatch (reed or straw)
  • Felt, asphalt
  • Copper, lead

Non Traditional Construction

Many properties have been 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. Where a property is of non traditional construction please contact your usual Service Centre with the following detals for further advice:

  • The name of the type of construction
  • Year built (if known)
  • Flat/terrace/semi or detached
  • Details of any repair scheme if appropriate and if the scheme applies to the whole block (e.g. the whole terrace/both semi's)

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 inappropriate advice.

Solar Panels

We will lend on a security with an Airspace Lease providing it meets the minimum requirements documented in the UK Finance Lenders' Handbook or where the panels are owned by the vendor. Other arrangements are not acceptable.

Duplex Properties

The word duplex can be used to denote several property types and the circumstances for each one are shown below:

It can refer to a specific structure type e.g. Duplex Foamed Slag.

Where there are two leasehold properties each covering two storeys in a block of four storeys. These types of property are maisonettes. However, in some developments they are referred to as duplex houses/maisonettes.

These buildings can also be known in their locality 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:

  • Prior to valuation, the conveyancer must confirm the property is in an area covered by the West Yorkshire Act 1980.

The valuer has strict criteria to judge the acceptability of Duplex properties

Japanese Knotweed

Properties with Japanese Knotweed growing within the vicinity are considered with caution and subject to the following terms:

  • If present within 7 metres of the property boundary, the applicant will be required to obtain a specialist report in respect of eradicating the plant, including an insurance backed 5 year warranty against re-appearance of the plant, and if necessary, repairs to the property and services will be required for the valuer to make a full assessment of the property's suitability.
  • If more than 7 metres from the property boundary, written confirmation is required from the applicant confirming that they are aware of the presence of this invasive plant and the adverse affects it could have on the property should it spread closer. It is recommended the applicant seeks their own independent professional advice regarding the risk this plant might impose.

Lending for flats

Blocks of flats up to five storeys high

All flats in blocks and Scottish tenements not exceeding five storeys* in height, will be acceptable at the discretion of the valuer, subject to the guidelines and restrictions on non-traditional construction that they have been given.

The valuer will be instructed in the usual way and will 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 located on the lower floors (exceptions can be made subject to marketability and valuers’ recommendation).

*Five storeys means a ground floor with four floors above, ignoring any basement.

Flats overs five storeys

We won’t accept former local authority flats in blocks of more than five storeys. This also applies to maisonettes and Scottish tenements in blocks of more than five storeys that were, or still are, in local authority ownership.

Flats in the same block as commercial premises

In addition to the usual construction and marketability criteria, the acceptability of a flat in the same block as commercial properties will depend on:

  • Nearby commercial activities. If any commercial activities in the block are likely to cause a nuisance by virtue of noise, smell or unsocial hours, we may not be prepared to lend on the flat.
  • Access. Some flats over commercial premises have unsatisfactory access which may involve passing through the business area, through yards containing commercial refuse, or using poorly maintained external stairs. If any of these factors apply we may not be prepared to lend.

We recommend you contact us with as much information as possible at enquiry stage to 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.

Coach house flats

Coach house flats are acceptable subject to a satisfactory valuation. A coach house flat is a freehold flat which is the only flat in the block and is built above garages and/or an access way.

Freehold flats and maisonettes in England, Wales and Northern Ireland

In general we will not accept freehold flats or maisonettes. Where each flat in a block has its own separate freehold title, these are unacceptable securities for us.

However, for most cases initially described as a 'freehold flat' there is usually no lease on the flat to be occupied and the occupier of the flat will be the freeholder of the whole block.

Acceptable

  • Providing there are no more than four flats in total and the remaining flats are all subject to long leases, the flat without the lease is a suitable freehold security.

Unacceptable

  • If there are five or more flats in the building, the application must be treated as a commercial proposition.
  • If the remaining flats are let on shorthold tenancies, the application must be regarded as a commercial proposition.

Studio flats

Studio flats are acceptable to Nationwide with no minimum floor area requirement, subject to marketability and valuers’ recommendation.


Part Commercial Properties

Some part commercial properties can be accepted on normal residential terms (subject to a satisfactory valuation):

Type of Property

  • Bed & Breakfast (no more than 2 bedrooms allocated to paying guests)
  • Live/Work Units
  • One room used as an office/consulting room (with a second room used as a waiting room if necessary)
  • Properties that have an annexe used for non-commercial purposes. (If the annexe was let on a short term assured or private residential tenancy basis (Scotland) or as a holiday let this would be acceptable)

Where the business income is required to support the mortgage this is acceptable subject to it satisfying our normal underwriting requirements.

We will not lend on residential terms where any part of a property has one or more of the following commercial uses:

Type of Property

  • Caravan park
  • Garage - petrol and/or car sales
  • Holiday lets for over 18 weeks per year (Although this is acceptable for an annexe)
  • Hotel
  • Industrial Unit/Workshop
  • Kennels/Cattery
  • Office Unit (unless only one room used as an office/consulting room, see table above)
  • Post Office
  • Public House/Club
  • Restaurant/Takeaway/Café
  • Shop
  • Storage Yard
  • Warehouse
  • Working Farm

For part commercial properties not covered here contact your New Business Service Centre to find out if the property is suitable for a residential valuation.


Properties with Large Acreage

We will give special consideration to large acreage/properties.

The property/land must be used entirely for the applicant's own residential purposes.


Tenure

We will 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

England and Wales

Flats and Houses - a minimum unexpired lease of 55 years is required at application with a minimum unexpired lease term of 30 years after mortgage term ends.

Where a new longer lease or lease extension is to be purchased the application will be processed using the details of the new/extended lease.

Northern Ireland

Flats and Houses - a minimum unexpired lease term of 50 years after mortgage term ends.

Scotland

Flats - a minimum unexpired lease term of 50 years after mortgage term ends.

Houses - refer to your usual Service Centre.

Valuation criteria

  • 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 property may still be declined by the valuer, e.g. a mortgage application in England for a 20 year term with a 56 year unexpired lease is within policy, but the valuer may advise the property is not readily marketable and saleable and we'll therefore not consider the property as suitable security.

Lease Terms

  • We expect lease terms to be reasonable and the valuer must be satisfied there is a market for any property, taking the lease terms into consideration.
  • Where the valuer believes marketability will be impacted by the lease terms, they may reflect this in their valuation, e.g.
    • Where ground rent escalation is linked to the value of the property or an index greater than The Retail Price Index (RPI)
    • Where lease clauses appear onerous, e.g. disproportionate Service Charges or Event clauses for normal use, such as installing an aerial
  • Some lease terms will impact marketability so severely they will always result in the property being declined, e.g
    • 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
  • Please note that there are different limits for acceptable New Build Lease Terms – see our New Build page for detail.

These examples aren’t exhaustive, and the solicitor is expected to refer back to us any lease terms they feel may affect the value or future saleability of the security.


Valuations

We’re legally obliged to assess the value of a property for mortgage purposes, which may not always involve a physical inspection of the property. If the property is a new build, the valuation report will be uploaded to the document store within NFI Online. For other applications, we’ll only release a copy of the valuation report in exceptional circumstances.

Your clients are strongly advised to get their own report on the condition and value of the property, based on a fuller inspection, such as a Homebuyers Report or Full Building Survey.

If you're unsure whether the property would be suitable security for us, you can complete this Pre-valuation enquiry form.

Property decision at DIP

In some cases, we'll have enough information on the property at DIP to decide we wouldn't be prepared to lend, for example, if the property is in a known flood area. This will show on the DIP results screen.

  • If your client decides to purchase a different property, you'll be able to amend the DIP.
  • If you want to challenge the property decision, complete the DIP property decline form and provide evidence/a valid reason for your challenge to be considered.

We need to underwrite some cases in more detail, for example, first time buyer applications at 85% LTV or above and self-employed applications. To prevent delays for your clients, please see our key information for DIP refer cases.

Automated valuations (AVM)

Where the AVM values a property at the purchase price (or your client's estimated value) and it passes our criteria, we'll provide approval on your client's property and (subject to no further changes) no further valuation will be required.

Where the AVM provides a value lower than the purchase price (or your client's estimated value), we may request a Mortgage Valuation Report/Further Advance Revaluation Report, which'll involve a physical inspection on the property.

It's not possible to complete an AVM on properties in Scotland, Northern Ireland or for New Build properties.

AVMs will expire in line with the DIP, and a new valuation will need to be obtained.

Mortgage Valuation Report (MVR)/ Further Advance Revaluation Report (FARR)

We won't charge for the MVR/FARR. The report will involve a physical inspection of the property for mortgage purposes only. It may not reveal serious defects and there may be important inaccuracies or omissions. It's not a Structural or Building Survey Report.

This report is only valid for 90 days, after which a new valuation will be required.

Homebuyer Report

A Homebuyer Report provides more detailed information for applicants on the condition of the property, together with an opinion of its open market value. Major defects will be listed with recommendations which may involve seeking specialist services. The report won't list every minor defect and it isn't a structural or building survey.

A Homebuyer Report may be unsuitable for some older or large properties, but the valuer will inform the applicants if this is the case.

The valuer will obtain an authority to undertake the Homebuyer Report direct from the applicants and will forward the report direct to the applicants.

We don't need to see the Homebuyer Report as we'll obtain a separate Mortgage Valuation report usually from the same valuer.

Full Building Survey

Recommended when purchasing an older, altered or run-down property, or if major works are planned. This comprehensive report includes detailed information on:

  • The fabric and condition of the property with a diagnosis of defects and repairs and maintenance advice
  • Visible defects and potential problems caused by hidden defects
  • Repair options including details on the risk of ignoring them.

If your client would like a Full Building Survey:

  • You or your client can email us at FullBuildingSurvey@Nationwide.co.uk .This should be done as soon as possible after submitting your case and include your client’s name and mortgage case reference number.
  • We’ll email straight back to say we’ve received the request and that we’ll provide a further update within 48 hours.
  • Once the Mortgage Valuation Report has been allocated, we’ll contact the valuation firm to confirm your client would like a Full Building Survey.
  • We’ll email you or your client (depending on who emailed us for the Full Building Survey request) to confirm the valuation’s been placed. Your client will be then be contacted by the valuation firm regarding their Full Building Survey.
  • Your client will need to pay the Full Building Survey fee direct to the valuation firm.

Alternatively, your client can approach a different company to get a Full Building Survey quote.

You're not required to enter any notes regarding the building survey on NFI Online. For full details of what is included in a Homebuyer Report and Full Building Survey, download a free guide from the Royal Institution of Chartered Surveyors.

Homebuyer report and full building survey fees

 
Homebuyer report and full building survey fees table
Property value Homebuyer report fees (includes VAT) Full building survey fees (includes VAT)
£0 - £50,000
 
£225
£415
£50,001 - £100,000 £440
£100,001 - £150,000
 
£275
£490
£150,001 - £200,000 £540
£200,001 - £250,000
 
£325
£590
£250,001 - £300,000 £640
£300,001 - £400,000 £375 £690
£400,001 - £500,000 £425 £740
£500,001 - £600,000 £450 £840
£600,001 - £700,000 £500 £940
£700,001 - £800,000 £550 £990
£800,001 - £900,000 £600 £1,090
£900,001 - £1,000,000 £650 £1,190
£1,000,001 - £1,500,000 £700 £1,390
£1,500,001 - £2,000,000 £800 £1,590
£2,000,001 - £2,500,000 £1,000 £1,000
£2,500,001 - £3,000,000 £1,250 £1,990
£3,000,001 - £3,500,000 £1,500 £2,390
£3,500,001 - £4,000,000 £1,700 £2,390
£4,000,001 - £4,500,000 £1,850 £1,850
£4,500,001 - £5,000,000 £2,000 £3,190
£5,000,001 - £6,000,000 £2,250 £3,990
£6,000,001 - £7,000,000 £2,750 £4,790
£7,000,001 - £8,000,000 £3,500 £5,990
£8,000,001 - £9,000,000 £4,500 £7,490
£9,000,001 - £10,000,000 £6,200 £9,490

For Equity Share, Shared Ownership and Restricted Resale Price applications, the valuation fee will be based on the full open market value of the property.

New build valuations

Please visit our dedicated New build page for information.

Home Reports in Scotland - Single Surveys

From 1 December 2008, all vendors of a residential property in Scotland must provide potential purchasers with a copy of a Home Report Pack which will contain a Single Survey, Energy Report and a Property Questionnaire. A generic Mortgage Valuation report will also be included.

Transcriptions

From 1 February 2010 the only transcriptions accepted are those arranged under the Scottish Home Report (single survey) process for purchase mortgages introduced in December 2008. Transcriptions aren't accepted for remortgage applications and those relating to new build properties.

For acceptance of these transcriptions the following points apply:

  • The valuer providing the transcription must be the individual who prepared the original Home Report or inspected the new property.
  • The firm employing the valuer must be on the Nationwide panel.
  • The valuation figure cannot be older than 90 days from the date of inspection.
  • Where the valuation figure is a result of a 'refresh' of the original Home Report, it must be based on an internal/external inspection that has taken place within the last 90 days.

The transcript will only contain the same information and valuation figure as the Single Survey. A valuer may however, at the request of the seller, update ("refresh") the report which could result in changes, including the valuation figure. To refresh a report the valuer must re-inspect the property.

Nationwide will instruct valuers to forward transcripts only if they have inspected (or re-inspected) the property within 3 months from receipt of our instructions.

Instructing valuation

  • Where a Single Survey has been prepared by a panel valuer, request a transcription via NFI Online or MTE in the usual way.
  • If the valuer isn't on our panel the transcript request will be rejected by Countrywide surveyors.
  • If when the instruction is received, a transcript cannot be issued, the request will be rejected by Countrywide surveyors.

Where a transcription cannot be provided we'll let you know and we'll arrange a standard valuation.

Exempt properties

New and newly converted properties that are to be occupied as residential units for the first time are exempt from the requirement to have a Home Report Pack and will not therefore require a Single Survey.

Scottish Valuation Instructions

Home Report Private/Self Instruction Nationwide to Instruct
Open Market Sale (non-New Build) Yes No Yes (optional)

Transcripts of home reports are acceptable for open market purchases providing the surveyor is on Nationwide's panel. If the surveyor who prepared the original home report is not on Nationwide's panel then Nationwide must instruct the valuation.

The original home report must have been carried out prior to the date of the mortgage application. It is acceptable, however, for any refresh which may be required to be dated after the mortgage application. 

Transcripts are not acceptable where the transaction is not an open market purchase (e.g. private sale/family sale/right to buy) even if there is a home report in existence. Please see further home report notes above.

New Build Purchase N/A No Yes (compulsory)

Nationwide must instruct the valuation in all new build cases even if there is a valuation available for a transcription.

Remortgages

No No Yes (compulsory)
For all remortgages Nationwide must instruct the valuation. There are no circumstances where Nationwide will accept a home report transcript or self instructed valuation for remortgages.

Non Open Market

Sale - Private/Family Sale/Right to buy etc
No No Yes (compulsory)
Nationwide must instruct the valuation in these cases even if there is a home report transcript or self instructed transcript available.

Valuation appeals

If you or your client wish to appeal the valuation figure, it’s important to contact us before submitting the appeal. We'll discuss the specific circumstances of the case and let you know the information we need to consider the appeal. This will include:

  • Two (preferably three) suitable comparable sales - each must be comparable by type, size and location, and include information such as date of sale and selling agent details.
  • Supporting commentary - clearly explaining why the valuation is considered incorrect.

Important information:

  • Any appeals received with missing information, or which don’t meet the necessary requirements are likely to be dismissed.
  • Valuations can only be appealed within 7 working days of you or your client being made aware of the valuation outcome.
  • We’ll respond to the appeal within 7 working days. The response will be the final outcome and the valuation can’t be appealed again.

Once you’ve contacted us, you can submit your appeal to valuation.appeals@nationwide.co.uk.

Switcher valuation appeals

If you or your client wish to appeal the property valuation figure returned by NFI Online as a part of a rate switch application, please complete the Rate Switch Valuation Appeal Form and email this to switchervaluationappeals@nationwide.co.uk


Geographical Area

UK Mainland

We will lend on properties in mainland England, Wales, Scotland and Northern Ireland.

Scottish Islands

Mortgage applications on Scottish Islands may only be considered for properties located on:

  • The Orkneys
  • The Shetlands
  • Arran
  • Bute
  • Harris
  • Islay
  • Jura
  • Lewis
  • Mull
  • Skye

Individual consideration will be given to properties on the following Scottish Islands:

  • Barra
  • Benbecula
  • Coll
  • North/South Uist
  • Tiree

We will not lend on any Scottish Island not included in the above lists.

Other Islands

We will not lend on the following islands

  • Isles of Scilly
  • Channel Islands
  • Eire (Southern Ireland)
  • Isle of Man

Fire safety assessment

An industry-wide form has been released to assist in the assessment and valuation of flats in multi-storey buildings or where specific fire safety concerns exist. This involves a fire safety assessment to be conducted by a qualified professional, which will provide a clear ‘safe’ or ‘unsafe’ certificate and speed up the ability for low risk buildings to be checked by specialists, enabling quicker transactions. This form has been endorsed by the Royal Institution of Chartered Surveyors, UK Finance and the Building Societies Association and is known as the External Wall Fire Review form (EWS1)

Recent guidance from the Ministry of Housing, Communities and Local Government (MHCLG) advises that fire safety must be considered holistically on any multi-storey or multi-occupied building irrespective of height.

We're adopting the use of the EWS1 form with immediate effect and will instruct valuers to consider its use:

  • where there are external wall system concerns in multi-storey/multi-occupied buildings
  • where there are attachments e.g. balconies considered to represent a fire risk OR
  • where there are any other significant fire safety concerns.

Valuation process

Where a Valuer has fire safety concerns with a building, they’ll decline the property pending receipt of the EWS1 form

The form must be:

  • obtained from the building owner (property owner in Scotland). The ‘Client organisation’ on the form must be the building owner and won’t be accepted in the name of the applicant/client.
  • fully completed and accompanied by a letter (on headed paper) from the signing firm which details their area of business, qualifications and confirms they completed the form.

It's the responsibility of the building owner to ensure the signing firm is a member of one of the appropriate professional bodies detailed in the MHCLG guidance.

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 and where acceptable 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, confirmation will be required from the building factors/managing agents acting for the co-proprietors.

Where remedial costs will be covered by the building owner:

For all application types, we’ll require confirmation in writing from the building owner that:

  • the EWS1 requirements will be complied with and the building rendered 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
  • no costs or hidden charges will be passed onto the leaseholder (e.g via service charges)
  • remediation will take place within a reasonable timescale (c12 months).

Where remedial costs fall to individual leaseholders/flat owners:

For remortgage and purchase, we’ll consider applications where remedial works have already been paid for and planned/started if the building owner’s solicitors confirm in writing that remedial works have been paid for and planned/started. 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. Further information will be required from the building owner in order to make an assessment, including:

  • the EWS1 requirements will be complied with and the building rendered 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 funds are required/due to be paid to the freeholder.

New Build

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.

An EWS1 form is required for any New Build designed/constructed under the old regulations (regardless of storey height) if there are concerns around for example wall systems and attachments.

However, 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).

If after speaking to the Developer/Sales Agent, the valuer can’t confirm that the latest Building Regulations apply, the mortgage valuation report will be declined pending confirmation from the Building Owner/Developer/Conveyancer as to whether it’s compliant with The Building Regulations 2018. 

Read more about New Build construction

Scotland and Northern Ireland

Whilst the MHCLG guidance only covers England and Wales, we’ll also be adopting the same approach for Scotland and Northern Ireland due to the importance of fire safety.


A-Z criteria

Search our A-Z criteria to find what you’re looking for.

A-Z criteria

New Build property

If your client is buying a New Build property, we have a dedicated hub to support you.

Visit our New Build hub

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