New Build/Refurbished

ranright

We recently got an agreement in principle from Nationwide and put on offer on a 2 bed flat.

Our broker took one look and asked how recently it had been refurbished. We told him it had just been completed (kitchen & bathroom re-done, attic conversion finished) and he immediately told us we are not going to be able to get the mortgage on that property.

Due to reasons surrounding our address history we are locked in to Nationwide, but our broker advised us it is common practice amongst lenders now - if a flat has been refurbished within the last 2 years, it is counted as "New Build"; with our low deposit, he says we will not get a mortgage for a newly refurbished property.

The crazy thing is that agents keep showing us newly refurbished properties, knowing we are first time buyers with low deposit. Now when they try to show us, they say our broker is wrong and try to convince us to look anyway. On top of that, it's common practice to invest in a property to spruce it up before selling - how could it be possible that the agents don't know about these rules?!

When I look on Nationwide it says "The definition of a 'new flat or house' includes maisonettes and means one that has not been purchased (even if it is or has been occupied) within two years of construction, conversion or refurbishment". It indicates the broker is probably correct, but is he?

EDIT: Please note the flat is not a new build at all, it is at least 20 years old or more. The works that have been done are new bathroom & kitchen, attic converted and then just general painting and decorating.

Fire_Fox

Welcome! Why don't you telephone Nationwide to clarify?

HapPea

There is a difference between giving a property a spruce up and refurbishing it. Unfortunately it's probably a very subjective difference and driven by the view of the surveyor the bank/Building Soc. appoints. I think in this case it will be driven by the attic conversion.

The reason refurbs can be classed with New Build is you are effectively buying something at "show room" level. Once you put up your own stamp on it the "gloss" can be taken off and the value goes down.

The property should still be mortgageable, albeit with a higher deposit % required.

kingstreet

In my opinion, the broker is correct and deserves credit for spotting it.

In addition, if the current owner has not owned it for six months, that would also be a potential problem as most lenders insist on a property being owned for six months before they will allow a new mortgage application on it.

I would speak to Nationwide about the renovation issue as it is subjective what could be classed as renovation/refurbishment/conversion.