A lack of demand for the product has led Virgin Money to withdraw from the self-build mortgage sector.
Chief Executive of BuildStore Financial Services, Raymond Connor, said he was not surprised that there had not been sufficient uptake on the product as Virgin Money would only release funds once the property is wind and watertight; a relatively late stage in the build.
“We are disappointed with Virgin Money’s decision to withdraw from self build lending, but given the limited nature of its product it is not surprising that they have seen very little demand from self builders,” said Mr Connor.
“It’s especially disappointing, as BuildStore had approached Virgin Money to discuss how they could better meet the financial needs of self builders and, if approached in a more constructive way, it could easily have been doing £100m in self build lending every year, funding hundreds of new homes.
“In our experience, self build customers require funding from day one, and a positive flow of cash to help them purchase their plot, and commence construction. We continue to work with lenders who understand this cash-flow need, and can provide that type of funding. Our products offer lending at an early stage, and funds can also be released in advance of when they are needed, to help keep the project running.”
Nigel Payne, Associate Director of BuildLoan, BuildStore’s intermediary division, adds: “With the right product, Virgin Money could have been a perfect brand for the intermediary self build lending market, and with our broker enquiries and mortgage approvals increasing every month, it has missed out on a vital opportunity to help support a growing market.”
Loading ...