Mortgage on a 'sub-sale' property

Hararch

I have recently sold and purchased a new build property. I am not buying direct from the builder but from a third party. Not sure of all the details, but basically this third party has purchased direct from the builder and is selling it straight on.

My existing mortgage is with the A&L. It is a 5 yr fixed and I am tied in until may 2012. I have been advsied that as long as I sell and buy on the same day - I can transfer my mortgage to the new property and there will be no redemption penalty.

I contacted the A&L today to give them all the relevant info. required to proceed with the purchase. However, they are now refusing to transfer my mortgage to this property. It is classed as a sub-sale and they will not provide a mortgage at all on this property - the house must be lived in for 6 months prior to my purchase.

As it stands, I am now faced with a large redemption penalty of £4,000 if i choose to proceed with this sale and look for an alternative lender.

Can someone please advise on the following:
1.Can the A&L do this?
2.Is it a standard policy adopted by other lenders?
3.Are there any loopholes to avoid paying this penalty - on the basis that they are refusing to provide a mortgage on the property?

Thank you