"Our lending is now linked to the cost of each stage of work, with a guaranteed stage release pattern agreed at application."
The society - which distributes its self-build and custom-build mortgages exclusively through BuildLoan - will now provide funding based purely on the costs of each element of a client’s build.
It takes away the requirement for interim valuations, and with that the risk of a customer potentially not getting the funds they expected partway through the build.
At the same time as the move to cost-based lending, The Nottingham has also revamped its self-build range. It has reduced the rate of one discount product, added a two-year fee-free discount offering and introduced a new 16-month fixed rate product.
Its two-year ERC-free discounted products are now available from 3.80% with a £1,499 fee or 5.00% fee-free, while the 16-month fixed product has been launched at 3.74% with a £1,499 fee.
Nikki Warren-Dean, The Nottingham’s head of intermediary sales, commented: “This is a really positive step in the reinvention of our mortgage lending. We know that having the confidence that money will be available exactly when needed as work progresses is hugely important for self and custom builders.
“Our lending is now linked to the cost of each stage of work, with a guaranteed stage release pattern agreed at application. This cuts out the need for interim valuations, taking away the risk of a customer potentially not getting the funds they expected.
“Lending based on build costs alone substantially reduces the risk of cashflow issues bringing a project to a standstill because contractors can’t be paid, or materials purchased.
“There can be no underestimating the peace of mind confirmed cashflow can bring – in fact it can be key to a successful and efficient self-build project.”
