Building societies withdrawing form SB mortgages.

[curlewhouse]

Following on from the rich seam of this on eBuild, I today contacted 2 building societies that people had reported good dealing with over self build mortgages - the Melton and the Monmouthshire (Ecological having withdrawn financing all self build except certified Passiv Haus for the time being-  so disqualifying 99+% of the SB market apparently). However, both the Melton and the Monmouthshire have come back quickly to me saying they no longer do self build mortgages! 

 

It seems we are being steadily painted into a corner that we can ONLY use Buildstore. Now if people feel their commission charges are high before, imagine what they will be once they have a monopoly (if they have not already) ?

 

 

 

 

 

[Bitpipe]

I think you're referring to Ecology, we used them for our recent finance and they are a delight to deal with.

 

I just checked their page and saw this - "We are currently focusing on self-build projects aiming for Passivhaus or EPC A or above as they result in the greatest carbon reductions. Please bear this in mind when you read our mortgage discounts page. If your project meets these criteria, we would be pleased to hear from you"

 

Obviously a building can't be certified as EPC A or PassivHaus compliant until it's completed but I guess they would look to see modelling under FSAP / PHPP to get some confidence that it is designed to comply.

 

Their fix term is 2 years and their discounts only apply post completion so it's arguable whether you'd ever really feel the benefit given you'd be likely to re-mortgate asap to get a decent rate.

 

Have you run FASP on your build design? If so, where are you coming out at and is there any scope to improve? 

 

 

[Alex C]

As above, the key wording is 'aiming at', it does not say achieving. I doubt there would be many Passivehause builds completed and signed off in less than 18 months, only leaving 6 months remaining on the discounted rate anyway. EPC A is easier to reach than passivehouse and may be a better target, although will require a chunk of solar pv to meet.

[PeterW]

Melton aren't going direct anymore they are only going via brokers such as Buildstore. 

 

There are quite a few of the smaller building societies lending locally - they may be a better source of funding as they know their local markets. 

[curlewhouse]

Yes, in the case of our own building society for example, which is one of the local ones and who are a real pleasure to deal with, the staff are told they don't do self-build mortgages, (and if you ask them they actually genuinely don't even know their firm really do them) but if you check with agents, like Buildstore, they actually do, but will not deal with you directly - which as a long term customer of the building society, having to pay extra to fund a broker is a bit frustrating. But you can see that its easy for the BS as it means they do not need self build experts themselves on their staff, for a relatively small (compared to the amount seeking mortgages for mass built square boxes on housing estates) section of customers. Interesting that Ecology now say EPC A is acceptable too (puts them back at the top of my list). I wonder if they realised there were only so many Architects building houses so 1 passivhaus a year wasn't going to cut the mustard !

As for ourselves, meeting EPC A is well within our design. 

Edited August 1, 2016 by curlewhouse

[jayroc2k]

I had a look at Ecology's financials, and they seem to have done a fair bit of lending in 2015. My conclusion is that the criteria change (passive, EPC A and at one point EPC B) is to manage lending.

 

Mainstream banks do so by moving the rates up or down to either increase or decrease lending or change underwriting standards e.g. 1 CCJ is acceptable (to increase lending) or No CCJ (to decrease lending)

 

Ecology do not play the rates or underwriting game and hence uses construction criteria to manage flow.

[Ferdinand]

It is surprising how few mortgages Ecology do, simply because they are small.

 

In 2014 their total amount of new mortgage lending was £23.1 million, which if we call them £230k each is only one hundred mortgages in the year, or two per week or per geographical county in the whole year.

https://www.ecology.co.uk/pdf/about/EcologyBS-31.12.2014.pdf

 

No wonder they are having to clamp down,

 

Interestingly as a contrast, I am finding that BTL mortgage providers are starting to deal with borrowers direct, and cut out mortgage brokers - even with Limited Company borrowers.

 

Ferdinand

 

Edited August 1, 2016 by Ferdinand