A Guide to Investing in New Builds and Conversions

Lending on new build and conversion properties runs to different criteria from existing homes: lenders require warranty or certification cover, additional documentation, and often larger deposits, and fewer lenders play in the space at all. None of that makes these properties poor investments; new builds bring energy efficiency and low early maintenance, and conversions bring character that standard stock cannot match. It means the lending must be structured with a lender that actively supports the property type, and the right certification, New Build Warranty or Professional Consultant Certificate, in place before application.

This guide covers what changes in the lending criteria for each, and the certification routes that make a conversion mortgageable.

New build investment: how the lending differs

The defining lending requirement on a new build is the New Build Warranty. Cover for structural defects in the foundations, walls, roof, and key structural components, typically purchased by the developer, protecting both borrower and lender. A New Build Warranty is not home insurance: home insurance covers floods, fires, and theft, while the warranty covers construction defects emerging in the years after the build. Lenders require both to be in place.

Beyond the warranty, four criteria differences separate a new build from an existing property:

• Deposit. Lenders typically require a larger deposit on new builds, capping loan-to-value lower to mitigate the risks of lending on newly built stock.
• Documentation. Drawings, plans, and development information are requested so the lender can verify construction quality and the property's likely ability to hold value.
• Building regulations. Evidence of compliance with local building regulations is required.
• Valuation. Where the property is still under construction at valuation, the surveyor may value from plans and drawings rather than a physical inspection.

Lenders often carry specific new-build product ranges, in some cases with preferential rates or extended repayment terms.

Conversion investment: the certification question

Lenders treat a converted property, a former pub, church, school, or commercial unit turned residential, under the same criteria lens as a new build, which narrows the lender pool and puts certification at the centre of the application. The conversion must be evidenced as compliant with building regulations, so lenders review the drawings, plans, and documentation for the works in detail.

Why conversions use a PCC instead of a warranty. A New Build Warranty on a conversion is often disproportionately expensive. The complexities and potential defects of converted buildings push the premium up, and works that fall short of building regulations can make the property ineligible for a warranty altogether. The cost-effective alternative is a Professional Consultant Certificate (PCC): a certificate from a suitably qualified professional (typically the supervising architect) confirming the works were monitored and completed to the required standard, protecting developer, borrower, and lender against defects. A PCC is quicker and cheaper to obtain than a warranty.

The retrospective PCC (RPCC). Where no PCC was obtained at the time of the works. Common when an owner comes to sell years later and the original architect cannot be traced: a retrospective PCC provides the same cover after the fact. If the original architect cannot be located, another local architect can assess the property retrospectively and issue the certificate from that assessment.

Mortgage Lane works with several lenders that accept PCCs and retrospective PCCs, so conversion cases arrive with a pre-researched lender list rather than a cold search.