Homes which have restricted covenants attached to their title deeds, which specify who the property can be resold to, for example local community members, will be accepted by the lender.
In another criteria shake-up, the lender is also going to offer porting online for existing customers through intermediaries.
Meanwhile, Nationwide is also introducing a ‘genuine bargain price lending’ option for transactions where homeowners wish to sell their properties at less than the open market value.
A spokesperson from Nationwide said this term applies to circumstances where the property is knowingly being purchased at a discounted price.
“For ‘genuine bargain price’ we lend against the open market value, where there is a genuine reason,” said the spokesperson. “These are for an inter-family sale, buying from a relative, an employee, buying from their employer, or a private tenant, buying from their landlord.
“However, where a developer offered a property under market value, this would not be ‘genuine bargain price’ and we would lend against the purchase price or valuation, whichever is lower. It does not apply to a developer’s affordable housing on a site.”
The maximum loan-to-value (LTV) is based on the current market value of the property. The LTV is restricted to 90% for standard properties with further restrictions applicable to new-build homes.
In all cases, the discount must be a gift, not a loan, and there must be no conditions attached to the gift.
Unencumbered borrowers, those who are mortgage-free, will also benefit from Nationwide’s criteria shake-up with a remortgage option rather than being forced down the purchase route.
Andy Frankish, new homes director, Mortgage Advice Bureau, said the restricted resale and gifted deposit changes were great news for the new-build market.
“These changes are very much a reflection of the government’s bigger national planning framework,” said Frankish.
He added: “The government has been focusing on different types of tenure and keeping homes available for local residents to buy.”
Frankish said Nationwide withdrew from the restricted resale market around two years ago and since then the market had been largely supported by Halifax.
“Lenders withdrew from this market when times were less stable because it is harder to sell these property types quickly in repossession circumstances because they can’t be sold on the open market, they must be offered to a restricted pool of buyers,”he said.
Emma Garrett, senior mortgage and protection consultant for Start Financial Services, said the added flexibility in Nationwide’s criteria under the ‘genuine bargain’ label was great news for the market.
“We’ve seen rising numbers of sales at a discount between family members which we would usually send to Santander – it’s good news to have more choice,” she said.
Garrett said she was pleased to see unencumbered borrowers being offered better terms.
“Homeowners without a mortgage should be able to access remortgage deals if they want to raise finance against their property but are typically steered towards purchase mortgages which come with a more costly set of fees. They’re not purchasing the property so shouldn’t be classed as such.”
Dominik Lipnicki, director, Your Mortgage Decision, said: “Any loosening of criteria is to be welcomed and a clear sign of the growing confidence in the market. It is good to see that Nationwide are recognising that borrowers’ personal circumstances may differ and flexible solutions do not necessarily represent higher risk.”
