The new build premium is the additional value that diminishes once a property is occupied. Previously Nationwide had valued all properties on their resale value – the value that would be achieved were the property to be resold.
Nationwide said the changes had been adopted to reflect concerns over aspects of transparency and pricing practice experienced within parts of the new build sector.
It is also aligning the maximum LTV for new build houses at 85% across all channels, while the maximum LTV for new build flats remains unchanged at 75%.
Andrew Baddeley-Chappell, head of mortgage strategy and policy at Nationwide, said: “Nationwide and TMW are already well known lenders in the new build market. These changes are about reaching the right balance between prudence and market support.
“We are aware from feedback from intermediaries and builders that our previous valuation approach presented some additional complexity.
“We hope that this change will improve the customer and intermediary experience and make Nationwide and TMW an even better choice of mortgage provider.”
Stewart Baseley, executive chairman at the Home Builders Federation, added: “This is a very welcome move. By harmonising their approach to new home valuation, Nationwide’s move should help increase the availability of mortgages for new home buyers. This in turn will help increase housing completions, creating economic activity and jobs.”
