Property and construction    

In this section we cover:

Construction types

Duplex properties

We will only lend on these property types:

  • a specific structure type, such as Duplex Foamed Slag
  • maisonettes are called duplex houses/maisonettes in some developments
  • "Over and Under" properties

If the conveyancer confirms the property is in an area covered by the West Yorkshire Act 1980, we must have this confirmation before valuation.

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:

Non-traditional construction

Many properties are built using a variety of other construction methods. Lending terms vary.

The exact construction name is important as lending terms may differ between different types and years built. For example, we have different lending terms for Gregory, Gregory Drury System 3 and Gregory Housing.

To check the construction type with us, use the pre-valuation form (PDF, 508 KB)

Traditional construction

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 in 1970 or after
  • Solid stone such as limestone or granite
  • Cob or regional variants such as cobb, clom and Wychert

Roof

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

  • Estate rent charges or estate management charges can apply to freehold or leasehold properties.
  • Charges must be reasonable at all times. If the charge is more than £500 a year, you'll need to let us know what the charges cover, so we can take this into account in the valuation.
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Inherited properties

Most applications involving inherited properties will be considered remortgages. However, it will be down to the conveyancer to advise how to structure the transaction.

Is the transaction structured as a purchase?

Key the deposit relating to the inherited element as 'Equity'.

Is the applicant porting their current Nationwide mortgage product to an inherited property?

Key this as a purchase application.

Product porting is not available on remortgage applications.

Is the applicant purchasing from an estate?

Key as a purchase application if the applicant is not a beneficiary of the estate.

Is the applicant buying out an estate beneficiary?

Key the loan purpose as 'buy out partner's interest (non-borrower)'.

Is the applicant repaying another mortgage on a inherited property?

Key the loan purpose as 'other personal consumption'.

You don't need to key an existing mortgage on the property which isn't connected to your client. Any mortgages that are in your clients' names should be keyed to the case in the usual way.

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Leasehold terms

We'll lend on:


  • Commonhold

  • Flying Freehold 

  • Freehold - houses and bungalows 

  • Leasehold (including good leasehold title) - see requirements for lending on leaseholds below 

  • Ownership (Scotland) 

  • Tyneside / Crisscross leases 

Leasehold valuations

The valuer must be satisfied that there is a market for the property, taking the lease term into consideration. Where the valuer believes the lease terms will affect the marketability, this may impact their valuation.

Although an application may meet the minimum leasehold terms, the valuer may decline the property if it is not readily marketable even within those guidelines.

The lease terms must be reasonable. Some lease terms will so severely impact marketability that property will be declined. These could include:


  • ground rent greater than or equal to 0.5% of the property value
  • the review period is 5 years or less
  • ground rent doubles every 5, 10 or 15 years
  • ground rent escalates by compounded Retail Price Index (RPI)
  • any lease terms the valuer believes may affect the value or future saleability of the property.

The valuer or solicitor is expected to refer back to us any such lease terms.

Service charges greater than 1% of property value per year will be referred to the valuer.

Note:

there are different limits for New Builds. See our New Build page for details.

Minimum leasehold terms

Location Minimum unexpired lease
England and Wales

55 years at application

30 years after the mortgage term ends

Lease extensions must be completed under the Leasehold Reform Act
Northern Ireland

50 years after mortgage term ends

Local Authority flats/maisonettes: acceptable if the lease term is more than 100 years and can be extended.
Scotland

Flats: 50 years after mortgage term ends

Houses: check UK Lenders Handbook
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Lending for flats

Building height criteria

We define "five storeys" as a ground floor with four floors above, ignoring any basement. We also have fire safety requirements for flats based on building height.


Flats and commercial premises

We assess flats in the same block as commercial premises based on a number of factors. These are in addition to the usual construction and marketability criteria. The valuer must consider the majority of the flats in the block to be suitable securities for us to lend.



We recommend you contact our pre-applications team on 0345 600 31 31 with as much information as possible at enquiry stage. This will allow us to contact a valuer for advice before issuing formal valuation instructions.

Specific types of flat

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Second properties

Nationwide can consider lending for:


  • Holiday homes in the UK or abroad. If the property being purchased is outside the UK, the loan must be secured on a property in the UK.
  • Second homes due to work location, sometimes called “Pied a terre.”
  • Accommodation for wholly dependent relatives.
  • A new main residence where the applicant wishes to let their existing property rather than sell it. For more information on the Let to Buy process with our subsidiary brand, visit The Mortgage Works.

Nationwide will not consider:


  • Capital raising against a main residence to purchase a Buy to Let.
  • Properties that will be wholly let from inception.
  • Properties occupied on lifetime tenancies and properties purchased or remortgaged from relatives with continuing occupancy may be unacceptable.
  • Properties that are only likely to be suitable as holiday homes.
  • Time Shares.
  • Mobile Homes.

For more information, see background properties.

Maximum 85% LTV will apply if the client will own two or more mortgaged properties on completion. We'll treat this as a Second Property application. This applies even if the client is purchasing or remortgaging the property to be their main residence.

Where your client has, or will have on completion, only one mortgaged property, standard LTV limits will apply.

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Other property considerations

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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. See our New Build page for the list of accepted building warranties.

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