Virgin Money has launched the first mainstream custom build homes mortgage products, underpinning its wider new build homes market commitment. It’s offering a pair of three-year tracker products, with a rate of 4.79% for an 80% LTV or 4.99% for an 85% LTV. Both mortgages come with a £1,995 product fee.
The new custom build products products provide flexibility for customers by allowing them to transfer to a new product at a time that suits them following the completion of their new home.
With no Early Repayment Charge levied for this, it opens up the market for custom build, enabling customers to build their home and transfer to a conventional product on completion of works.
Furthermore, Virgin Money will not pass on the charge for indemnity insurance, which saves customers an average of £1,300 in upfront costs.
Peter Rogerson, Virgin Money’s Director of Mortgages said: “Virgin Money is delighted to be the first mainstream lender to launch a Custom Build proposition, as we want to offer more choice in an underserved section of the market that has huge growth potential.
“Custom build aligns with our aim to support and develop the sustainability of home ownership. Increasing housing supply is vital to ensure we have a successful housing market where people can afford to realise their home ownership dreams.
“Custom build is a way to help increase that supply, often supporting smaller regional builders who can deliver additional volume to supplement the supply from the big national players. It also brings more choice to customers who may want a home that is just different.
“We believe the market has huge growth potential and support the Government’s agenda to increase this market over the next 5 years. The market has been served well so far by the smaller regional building societies, but if we are to see sustained growth we need to see larger lenders support the market.”
Alok Sharma, Housing and Planning Minister said: “This Government is determined to make housing more affordable, increase housing supply and help more people get onto the housing ladder.
“Shared ownership and custom build housing can play a crucial role in this, helping to deliver the homes people want and supporting first time buyers.
“That is why it’s great to see Virgin Money launching a new range of mortgage products to support aspiring custom builders design their dream home and those wishing to buy through Shared Ownership.”
Rachel Pyne, BuildLoan Operations Director said: “We’re delighted to work with Virgin Money on custom build. Together with our intermediary partners we’ll give customers real choice and put them in control of designing and building their dream home.”
As part of its commitment to new build, the custom build products are accommpanied by new shared ownership products, futher diversifying Virgin Money’s offerings.
Both suites of products come with a committment by Virgin Money to donate £100 per completion to Crisis, the National Charity for homeless people. Partners BuildLoan, Countrywide and Eversheds will also contribute, raising each donation to £150 per loan.
The new mortgages represent a much needed large-lender approach that offers a dedicated custom build product as opposed to a self build one. Discrete products will help the consumer understand that custom build is not a version of self build, it’s a simpler, stand alone system. And as such, it needs its only products to differentiate it and provide consumer confidence.