New Build criteria

In this section we cover:

Builder cashback/deposits/incentives

Equity loans, First Homes and Restricted Resale Price

Unacceptable

  • Builder cashback or deposits on New Build equity loan, Help to Buy, First Homes and Restricted Resale Price properties.

  • The value of the incentives is more than 5% of the purchase price or valuation.

Acceptable

  • Any other financial incentives listed in Section 7 of the UK Finance Disclosure Form

  • The value of incentives is 5% or lower.

  • A minimum 5% deposit from client’s own resources. This can include gifted deposits.

Standard purchase above 90% LTV

Builder cashback, deposits and any other financial incentives are not accepted. We will confirm that no financial incentives will be offered. A part exchange agreement will be considered a financial incentive.

Standard purchase up to 90% LTV including Shared Ownership

Unacceptable

  • The total value of incentives is more than 5% of the purchase price or valuation. We will decline the case if the total value is more than 5%. The value of incentives will need to be reduced to 5% or lower.

Acceptable

  • Builder cashback, deposits, vouchers, part exchange agreements, and any other financial incentives listed in Sections 7 and 8 of the UK Finance Disclosure Form. This is up to a maximum total value of 5% of the purchase price or valuation.

Vendor cashback

We will treat cashback on properties that have recently been, or are in the process of being upgraded or converted into flats by a developer the same 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 to give the net purchase price. We base our lending on whichever is lower, the net purchase price or net value.

Non-financial incentives

We'll accept builder non-financial incentives on all New Build applications. These may include kitchen upgrades, fitted appliances, home fittings/furnishings, flooring, garden landscaping. This is in addition to financial incentives.

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Construction

Traditional construction

The majority of New Build homes use traditional, tried and tested methods of construction. For example, cavity brick or block and timber frame.

Construction on high rise flats, is usually done using concrete, steel frames and different forms of roof cladding. This is different to the more standard tile and slate.

We accept all these methods.

Modern Methods of Construction

An increasing number of homes built in the UK are using innovative materials and methods such as:

  • changes to on-site processes (including the use of robotics)
  • factory manufactured pods
  • roof and floor cassettes
  • steel and timber frames
  • 3D printing

These products and processes are referred to as Modern Methods of Construction (MMC).

We accept many properties built using MMCs, subject to our criteria. Our valuers will assess these on a case by case basis. In order to protect our members we need to be sure that new methods of construction are durable, easy to maintain and remain saleable.

Check if the MMC site has been assessed

You can contact the New Build support team where a property is known to incorporate MMC to see if the site has been assessed before. Make sure to provide as much information as possible, including:

Office to residential

We recognise that office to residential conversions are important to the new housing market.

We'll consider them subject to certain criteria:

Location

  • A suitable mix of residential use within the area.
  • Vehicle access must not be solely via a commercial area.
  • Sufficient residential infrastructure within the immediate area. For example, access to amenities, shops, schools and transport.
  • Nearby commercial activity should not detract from demand for home ownership.

Construction

  • The building must be an acceptable construction type.
  • Where appropriate, we require a suitable and acceptable warranty.
  • In some instances, the valuer may need to see the original Structural Engineer's Report on the conversion to residential use.

Quality of conversion

  • The external structure should be updated or modified to give the appearance of a residential building.
  • Compliance with fire safety and regulations, especially around the use of external cladding or insulation materials on high rise buildings. See our fire safety assessment criteria.

Lease terms

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Fire safety

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 (PDF, 200KB) for any New Build designed or constructed under the old regulations, regardless of height or number of storeys.

Unless the valuer raises fire safety concerns, we will not require an EWS1 form for New Builds constructed in compliance with The Building Regulations 2018.

If the valuer can't confirm that the latest Building Regulations apply, we'll decline the mortgage valuation report. Then we'll speak to the Developer/Sales Agent to confirm compliance.

See our fire safety and assessment page for full details of what to do if a property is declined due to fire safety concerns.

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Leasehold terms and ground rent

Property type Minimum acceptable lease term (except for Shared Ownership)
Flats 125 years
Houses 250 years

As per the Leasehold Reform Act 2022 the following lease terms are unacceptable:

  • any lease which is subject to a ground rent (or annual rent) charge which is more than on a peppercorn basis

  • any lease which is subject to a ground rent (or annual rent) review and altered on any review basis or methodology.

If your client had a head lease or underlease before July 2022 and did not transfer it for the first time after this date, the lease will be required to conform to the Act. Your client's solicitor will need to confirm that the lease meets the requirements of the Act.

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Valuations

All new properties are valued on an 'as new' basis. We offer a free standard valuation on all our products.

Valuation process

  1. Booking an appointment

    The valuer will make an appointment via the sales team when visiting a new site.

  2. Requesting documents

    The valuer will need to see:

    • a copy of the UK Finance Disclosure Form completed in full from the sales team.
    The valuer will return a nil valuation to us if the UK Finance Disclosure Form isn't available.
    This will not be updated until they receive the document.

    • floor plans for the property.

    • confirmation of the property's position and surroundings within the development.

    • details of comparable on-site sales.

  3. On site inspection

    Once on site, the valuer inspects the property in full if they can access it. They will follow the usual residential inspection method.

    If the property is not accessible, the valuer will inspect the show home if they haven't attended the site before. This is so they're familiar with the quality of the build.

  4. Reporting

    Once the valuation report is ready, we'll upload this to the document store. You'll then be able to find it on NFI Online by going to the case home screen and clicking the 'Case Documents' tab.

Site access

We have quick timescales to carry out New Build valuations. We'll use information from earlier site visits to value New Build houses which have suitable warranties and are of traditional construction. We can do this without the need to visit the site.

However, many on-site sales offices are only open part time, and this will impact how long it may take to book valuations on sites that we need to visit.

New Build premium

Some non-financial incentives will only benefit the first owner of the property, and some will continue to benefit future owners.

When valued, elements that will benefit only the first owner of the property are considered unsustainable. Elements that will benefit future owners are sustainable.

The sustainable element of the New Build premium should not be more than 5% of the purchase price for higher LTVs.

Unsustainable

  • Any first occupier benefit that doesn't transfer to future purchasers (choice of finish or fittings etc)
  • Affordability or scheme premium   
  • Certainty associated with new home occupation (completion/move dates etc)
  • Part exchange and other bespoke first occupier/purchaser benefits

Sustainable

  • Better energy efficiency
  • Modern amenities/design (new kitchen/ bathroom fittings etc)
  • Section 106 benefits on site (new school, local shops, amenity areas etc)
  • Developer brand value
  • Limited maintenance requirements and benefits of long term warranty

Scottish valuations

Transcriptions

The only transcriptions accepted are purchase mortgages arranged under the Scottish Home Report (single survey) process. We won't accept transcriptions for remortgage applications and those relating to New Build properties.

Scottish valuations instructions

Nationwide must instruct the valuation in all New Build cases, even if there is a Home Report available for transcription.

Valuation appeals

For New Build properties, we require details of three comparable sales:

  • one from the same site
  • one from a similar local New Build site
  • and a Non New Build property in the local area.

For full details, see our valuations page.

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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. Most warranties will provide cover against defects for two years and structural issues for ten years. It's unlikely that any mortgage provider will lend on a property without a warranty.



If a building warranty has been issued that's not listed, or you have any questions, contact the New Build support team.

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