Hodge Bank has recently announced significant changes to its lending criteria, marking a shift in its approach towards high-rise residential properties. This development is particularly impactful for those looking to invest in urban property, especially in major cities like London, Manchester, and Birmingham.
The Removal of Height Restrictions
Previously, Hodge had restrictions on lending for properties in buildings above a certain height. However, recognizing the growing demand and the evolving urban landscape, Hodge has now removed these height restrictions. This change means that Hodge will now consider mortgage applications for homes located in privately built properties that exceed six storeys in England. This decision opens up new opportunities for investors and homebuyers eyeing properties in tall buildings, which are particularly prevalent in metropolitan areas.
Embracing Modern Construction Methods
In addition to lifting height restrictions, Hodge is also showing flexibility towards homes built using Modern Methods of Construction (MMC). Applications for such properties will be subject to an evaluation by Hodge’s in-house surveyor and head of property risk, Jonathon Matthews. This move indicates a broader acceptance of innovative building techniques in the mortgage industry, which could encourage more sustainable and efficient construction practices.
Implications for Property Investors and Homebuyers
The easing of height restrictions is a significant boon for those looking to purchase properties in big cities. Urban areas, where space is at a premium, often resort to building upwards, resulting in a higher prevalence of high-rise buildings. Hodge’s updated criteria mean a larger pool of properties is now accessible for financing, providing more options for investors and homebuyers in these densely populated areas.
The Cladding Controversy
In recent years, the issue of cladding on high-rise buildings has been a significant concern, particularly regarding fire safety. Hodge addresses this by stipulating that the properties must be within developments built by one of the 51 developers who have signed the ‘Developer Remediation Contract’ with the Government. This contract ensures that the developers are committed to rectifying cladding issues, thereby reducing the risk for buyers and lenders alike. Additionally, properties built by any of the four developers recognized for their cladding-safe buildings are also eligible.
Streamlining the Mortgage Application Process
To facilitate this expanded lending scope, Hodge has invested in its in-house surveying team. This team is tasked with assessing and reviewing properties, especially the more unconventional ones, right at the initial stages of the mortgage application process. This investment is aimed at speeding up the approval process, making it more efficient for both brokers and their clients.
Expertise and Support for Brokers
Emma Graham, Business Development Director at Hodge, emphasizes the company’s commitment to supporting brokers who are instrumental in guiding clients through the property investment process. By taking on an in-house property team, Hodge aims to provide quicker and more accurate responses at the application stage, benefiting both brokers and their clients.