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I can't believe this has just happened :-( 

 

So, we bought a bungalow (£360k) on a decent sized plot - no mortgage and have £218k towards the build so thought we ought to get a small mortgage of £100k as costs had risen etc. Supplied statements  for all our accounts including one we have with a bank in the US, everything short of my inside leg measurement. We estimate when the house is complete (4 bed 3 bath 2 storey 2500 sq ft) will be worth £850,000-£875,000.00. We have $250k in the house in the US and £500,000.00 in equity in our buy to let portfolio,

 

After months of hurdles - objections from a neighbour, right to light reports, party wall agreements (even though there is more than 3 metres between properties), planning officer stuck in India (then apparently walking or being sacked), to be followed by another who walked, we finally got planning approval (after I pleaded our case at a council planning meeting) with demolition to start Monday and building commencing next Thursday.

Boom - last night the broker mailed to say the lender - Newcastle - had changed their lending critieria and reduced the amount they would lend from £130k to £54k. but instead of showing £218k in our account we now have to show £299k which we don't have and are at a loss where to turn to.

Just told my wife and felt she would cry - we are both just gutted and lost for words. 

 

Any suggestions at all ?  The broker (Buildstore)  said that apparently Newcastle are the only self build lenders - The irony is we now have income of £9,000.00 a month coming :-(

 

Thanks

 

Paul 

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Sorry to hear that, but perhaps there is Plan B to be written. 

 

I'd perhaps say try not via Buildstore, as you seem to be in a position to look around, with your bungalow ready to gobble and PP in place.

 

Why would Newcastle be your only lender? Do you have 3 heads? Or is there a good reason?

 

Ecology BS?

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The broker (Buildstore) said Newcastle were the only lender so all looked good - provided ALL the info - told the first stage payment would be £60k - great and then whoosh - pull that rug !

 

Cheers

 

Paul 

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Melton BS do self build - very good too

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So would you approach Melton BS or Ecology direct ?

 

Cheers

 

Paul

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In a previous life I had dealings with ecology and they were brilliant, and yes approached directly. 
 

also had dealings with Buildstore who were rubbish even after proving exactly which date I had my tonsils out as a 9yr old. Ridiculous process, wouldn’t touch them with a barge pole even if they were the only option. Just my 2p worth!

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Give ecology a call. Your cash and LTV is better than ours and we had no issues. 

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+1 for Ecology, although you do need to meet their SAP / PHPP requirements with your designs.

 

Genuinely delightful to deal with all the way through the project.

 

Plan B would be to somehow borrow the additional funds to demonstrate the required balance and then give them back as you don't need them.

 

 

 

Edited by Bitpipe
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Just spoke to Ecology and sent our SAP report - short of their required 88 😭

 

Paul

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7 minutes ago, PaulCDH said:

Just spoke to Ecology and sent our SAP report - short of their required 88 😭

 

Paul

Can you squeeze in some more insulation or add PV panels?

 

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11 minutes ago, PaulCDH said:

Just spoke to Ecology and sent our SAP report - short of their required 88 😭

 

Paul


OK … How..??! Standard box to min standards with a gas boiler ..??

 

Lots of glazing ..?

 

Not enough insulation ..?

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14 minutes ago, PaulCDH said:

SAP report - short of their required 88

 

If not already included, according to our SAP assessor, 2.5 kWp of PV would add 4 SAP points.

 

Your SAP report may have included suggestions of simplest ways to get more points? (But PV almost certainly the simplest and cheapest)

Edited by kxi
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Thanks for this guys - some useful info. So pi**ed with Buildstore who intimated along the way that it was a 'done deal' and wasn't at all and at this late stage too !

 

Paul

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Still struggling to understand why people use buildstore, absolute waste of air🤷‍♂️

 

Ecology.

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4 hours ago, PaulCDH said:

The broker (Buildstore) said Newcastle were the only lender

 

Perhaps the only lender that give him commission?

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I've no idea if these really do offer self build mortgages in practice or just like to think they do but here.. 

 

https://moneyfacts.co.uk/mortgages/self-build-mortgages/

 

It lists the following BS.. 

 

Progressive BS

Hanley Economic BS

Loughborough BS

The Melton BS

Ipswich BS
Saffron BS

Dudley BS

Beverley BS

Scottish BS

 

They may have geographical restrictions?

 

This site has similar list

https://www.money.co.uk/mortgages/self-build-mortgages.htm

and adds..

 

Ecology BS

Loughborough BS

Newbury BS

Vernon BS

 

 

 

 

Edited by Temp

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5 hours ago, PaulCDH said:

Just spoke to Ecology and sent our SAP report - short of their required 88 😭

 

Paul

 

Time for a few changes to the design by the sound of it.

 

You can get hold of, and play with, a trial copy of the SAP software.

 

 

(Refrains from posting suitable song video, as you sound quite raw, still.)

 

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5 hours ago, PaulCDH said:

Just spoke to Ecology and sent our SAP report - short of their required 88 😭

 

Paul

 

It's not hard to get to 88. Triple glazing, good airtightness, mvhr, a few solar panels. We were at 91 with standard 0.2 u value walls. You'll reap the rewards. Go back to your architect and see what would be required. You're nowhere near starting your build so plenty of opportunity.

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Stick with ecology.  As has been said not difficult to achieve their SAP.

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9 hours ago, PaulCDH said:

I can't believe this has just happened 😞

 

So, we bought a bungalow (£360k) on a decent sized plot - no mortgage and have £218k towards the build so thought we ought to get a small mortgage of £100k as costs had risen etc. Supplied statements  for all our accounts including one we have with a bank in the US, everything short of my inside leg measurement. We estimate when the house is complete (4 bed 3 bath 2 storey 2500 sq ft) will be worth £850,000-£875,000.00. We have $250k in the house in the US and £500,000.00 in equity in our buy to let portfolio,

 

After months of hurdles - objections from a neighbour, right to light reports, party wall agreements (even though there is more than 3 metres between properties), planning officer stuck in India (then apparently walking or being sacked), to be followed by another who walked, we finally got planning approval (after I pleaded our case at a council planning meeting) with demolition to start Monday and building commencing next Thursday.

Boom - last night the broker mailed to say the lender - Newcastle - had changed their lending critieria and reduced the amount they would lend from £130k to £54k. but instead of showing £218k in our account we now have to show £299k which we don't have and are at a loss where to turn to.

Just told my wife and felt she would cry - we are both just gutted and lost for words. 

 

Any suggestions at all ?  The broker (Buildstore)  said that apparently Newcastle are the only self build lenders - The irony is we now have income of £9,000.00 a month coming 😞

 

Thanks

 

Paul 

Just a thought.

 

You have broker who must have some resonable relationship with the lender so that is positive.

 

Try and establish the reasons for their sudden change of tack. Could it be that they have just taken a different view on how they view the presentation of your financial figures or is it something more fundamental.

 

If it's the former then it may be a case of maybe realising some of your US assets into cash £ Sterling, providing security in a different way that is easier for the UK lender to call up under UK law and so on. It may just be a paper work excercise and you need to show that should you default then the lender can recover their monies quickly and efficiently. Put yourself in their shoes, that is how you win the battles.

 

On the other hand it may be something more fundamental. The lender may be saying to themselves, hey look these folk seem to have plenty cash but once they start knocking things about, demolishing and so on the value that we can call on easily is only the value of the plot and that will be at a distressed sale price.. in other words what would the plot be worth at auction with a structure that could potentially incur demolition and clearing cost, then another journey through the planning system. Although you have equity the lender often thinks.. how easy will it be if these folk default to actually get our hands on the money and what will it cost us to do it if they resist!

 

If it is the latter.. the plot thing, then your broker and designer should be able to help so don't feel alone here. It may just require a different sequencing of the works so that you hold more value in the plot and structure while adding to the value of the security.  Yes it will be a pain to do, but it may only require a few tweeks to convince the underwriters that all will be ok.

 

It's hard to predict what exactly will take place during the construction phase as this seems like a "renovation"? The sequencing that was origonally intended at lending stage may need to change due to site "conditions" .. that is a natural part of the construction process.

 

Don't forget you are not alone, your broker will want to help. I imagine you have a designer.. Architect.. they will want to help to get the project off the ground.

 

I'm sure you will find a way forward and later look back and say hey.. was a nighmare at the time but look at what we have achieved and do we not feel good!

 

 

 

 

 

 

 

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You aren't necessarily limited to self build mortgages. If you have equity in other properties you could release that. You might also be able to refinance loans you have on other properties from capital repayment to interest only to reduce your outgoings, which will boost your affordability meaning you can borrow more. 

You need to find a good broker. I will PM you the one I've used. He is very creative and knows how to play the different banks and get the most leverage out of your situation.

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Buildstore are 100% grade a wankers.  

 

Ecology all day long. 

 

I had 4k per month coming in and we have 400k loan approved. SAP wasn't quite there at first so adjusted till it met the requirements I'm not going to add the 1kw PV  required but I have increased windows u value to compensate at end. 

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100% look to remortgage the ~£75/80k needed from the BTL.

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