Alliance & Leicester has capped new build flats and nearly new flats loan to value to 70 per cent with effect from November 19.
In an email to brokers the lender says: “The expansion of the New Build market in recent years has resulted in an increasing array of discounts and incentives being offered on New Build properties. This continues to be particularly prevalent for New Build Flats.
“It is essential that as a responsible lender, we continue to take steps to protect our customers by ensuring that we have suitable security for mortgage purposes.”
A&L says that a new build flat is defined as one where the property is being purchased directly from a builder or where the property has not been occupied before.
Larger property conversions also fall within this definition, specifically this will include conversions of properties which have not previously been lived in, for example the conversion of a former office block.
A nearly new flat is one that was bought from a builder or developer in the last 12 months or is on a site that is still being developed
It says that its lending decision will be based on the standard ‘Open Market’ valuation and not the ‘Projected Market’ Value as is currently the case for New Build Flats.