refurbished classed as new build?

Rklsmith7

Hi everyone,

Looking for some advice, we just had our mortgaged approved and have instructed a survey on a property that we successfully offered on.

I have been told there is a risk this property could be classed as a newbuild by our mortgage broker. Which would mean a 20% deposit would be needed.

It is a terraced house, over 100 years old. No structural changes, no conversions or extensions just bought up to a living standard, re-wired, re-plastered, re-fitted kitchen & bathroom.

I have never heard of such thing before and feel like i am silly to waste money on this survey if it is a definite no go. Has anybody had any experiences with this?

All advice much appreciated.

amnblog

The broker is correct it can be treated as 'new build'.

Can he not check with the lender/ valuer first. Perhaps he has done so and they told him 'subject to survey'.

dimbo61

" It is a terraced house, over 100 years old "
So what have other houses on the same road sold for over the last 12/18 months ?
As long as the asking price is not way over the top compared to recent sales things should be OK

Rklsmith7

Next door sold for 205,000 in may 2006, our one is 250,000?

The broker said it is all down the valuers comments and interpretation of the house.

catieeb06

I think you should be okay on this one. As there's been no conversion done, it's purely a slightly modernised house.

In my experience it's the conversion that gets it re-classed as a new build not a simple bit of renovation.

Rklsmith7

I can see the house was sold in august 2013 for 162,500 prehaps this is where we could have a problem...

Thrugelmir

Difficult to see what would justify such an increase in value in such a short space of time.

Rklsmith7

Indeed, as for the rest of the road the most recent sale was may 2006 for 205,000 next door also a 2 bed 1 bath terrace.

kingstreet

80% max, presumably Halifax?

If the property was vacated so the work could be done, it will be classed as a newbuild;-

An initial occupancy/new build property is classed as any property being occupied and/or sold for the first time on the open market in its current state and includes converted and refurbished properties. These will fall into one of the following categories:

Newly built property.

Refurbished property i.e. refurbishment of an existing residential property, typically a re-furbished property will be considered as initial occupancy where the vendor is a builder/developer and the property has been vacated to allow for the refurbishment to be undertaken.

Newly converted property i.e. conversion of an existing non residential property, e.g. an existing mill converted into flats.

A property, either new or converted (as above), that has been tenanted and is now offered for sale by the builder/developer.

Property must be subject to one of the following building control and monitoring requirements:

Building Standards Indemnity Scheme from a warranty provider accepted by Lloyds Banking Group

Professional consultant where small, solely residential development of no more than 15 units – consultant must meet qualifying criteria
An acceptable guarantee from a development corporation or local authority where they are the vendor.

A final inspection is required to confirm completion of the new property unless covered by an acceptable new build warranty provider.

Barn conversions / converted properties are subject to a full retention pending completion of works and subject to new build criteria.

Maximum LTV on new build properties (houses and flats) is 80% (65% if the scheme type is a second home loan or buy to let).