Source of deposit: Builders Deposit

Our standard acceptability

Acceptable

Criteria definition:

Indicates if a Buy to Let lender accepts builder gifted deposits as an acceptable source of deposit for new build properties. For example a couple are purchasing a new build property to Let. The purchase price is £200,000 and the builder is offering a deposit of £10,000 (5%). The couple want a lender who is happy for this to form part of the clients overall deposit. 

Policy Notes:

A builder’s deposit is acceptable providing the Borrowers are providing a deposit from their own resources of at least 20%. The Valuer will be required to confirm that the valuation is not affected, and the Solicitor should confirm that the purchase price in the legal documentation matches that on the Society’s Mortgage Offer. Lending will be based on the lower of purchase price or valuation.

Warning Notes:

Where the borrower is putting down less than a 20% deposit then a builder's deposit would be unacceptable.

Criteria categories:
  • deposits
  • Policy

Last updated:

29 August 2018