BuildStore has introduced a new self-build mortgage product which targets the intermediary market. The loan offers finance up to 95% of the land purchase price and building costs.
Funded by Verso, Build Loan is offered on a self-certified basis and includes stage payments in advance.
John Hay, marketing and product operations director at BuildStore, said: ‘The main differences between our product and others on the market is that it is self-certified and also pays money out in advance of each stage of the build, rather than afterwards. This means clients get a positive cash flow. We work out how much they need and then borrow up to 95%.’
Hay added that self-certification is often a crucial feature of self-build. ‘In our experience, lots of people who want to self-build are in the building trade, or are self-employed,’ he said.
One of the benefits of the product, according to Hay, is that clients do not have to redeem their current mortgage while building their new house. As a result, they do not need to seek alternative accommodation while building work is in progress.
No interim valuations are required and bridging loans are also unnecessary because the loan runs alongside the client’s existing mortgage.
The self-build market is popular and buoyant at the moment, which Hay believes has been influenced through interest generated by the media. However, he believes it is an area in which advisers could require assistance.
He said: ‘It is not a wide market and advisers may only find a few self-build clients a year. We have nationwide coverage for products and can help intermediaries throughout the process.
He added that demand for mortgages that help self-builders fund such projects will continue to grow. ‘The only thing restricting self-build is finding land,’ he said.