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Virgin Money pulls out of self-build

Virgin

Virgin Money has pulled out of the self-build mortgage sector, citing a lack of demand for the product.

Previously, Virgin would not release funds on the land only but would release stage payments, which would be paid when the property was wind and weather tight, plastered and then completed.

The lender pulled out of the sector earlier this week.

A spokesman says: “There was a limited demand for the product so we decided to withdraw it. It only ever made a very small fraction of our lending.”

Other lenders that will lend on self-build properties include BM Solutions and a series of smaller building societies like Saffron, Melton Mowbray, Scottish Building Society and Progressive Building Society.

Last month, Money Marketing’s sister title Mortgage Strategy revealed that an all-party parliamentary group for self-build, led by Richard Bacon MP, is exploring whether it is possible to include self-build projects within the mortgage indemnity Help to Buy scheme in order to increase the number of houses built.

Lending to the self-build sector fell from £2.63bn in 2007 to £790m by 2011 – a drop of almost 70 per cent – according to a Lloyds Banking Group and University of York report published last month.

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