Ipswich Building Society has enhanced its self-build lending criteria to accept modern methods of construction (MMC). The change relates to new borrowers in addition to those looking to re-mortgage and applies across the Society’s existing range of mortgage products, including its recently relaunched self-build discount product which has a decreasing early repayment charge of 3% for the first twelve months and zero for the remaining twelve.
MMC typically involves fabricating the structural units of a building off site, or manufacturing them on site by contemporary methods, and is an increasingly attractive option for self-builders. In a survey of 250 house-builders by the Build Show, 67% said that MMC will play a key role in new-home supply in the UK with almost two thirds of housebuilders believing that manufacturer innovation will play a key role in new home supply.
Within the Society’s new rules, the applicants’ chosen scheme must be accredited through the Buildoffsite Property Assurance Scheme (BOPAS), an initiative jointly developed by Buildoffsite, The Royal Institution of Chartered Surveyors, Lloyd's Register and Building LifePlans Ltd, in consultation with the Council of Mortgage Lenders (now UK Finance) and the Building Societies Association. BOPAS provides lenders with assurance that the properties against which they may be lending will be sufficiently durable and readily saleable for a minimum of sixty years.
All mortgage applications will be considered on a case by case basis, underpinned by the Society’s individual underwriting specialism, designed to drive diversity in the mortgage market.
Richard Norrington, CEO at Ipswich Building Society, commented, “Through our commitment to seeing diversity in mortgage lending, we have made changes to our lending criteria to further support the growing community of self-builders.
“I am delighted that we continue to offer mortgage applicants an alternative to the machine-only mortgage application processes used by some larger lenders. By assessing each mortgage application on its individual merits, we can take a true assessment on credit-worthiness, and make an informed decision when lending.”
The Society’s mortgage products benefit from a 50% fee free overpayment facility, whereby borrowers can overpay penalty free by up to 50% of the original loan amount, all of which are available to direct applicants in England and Wales, and via selected intermediaries. For borrowers overpaying in excess of their 50% allowance, or for early redemption of their loan, an Early Repayment Charge applies.
