PCC Mortgages for New Builds

Key Takeaways

  • New builds with a PCC (Proprietary Consumer Code) certificate instead of the standard 10-year warranty may face unexpected mortgage application rejections.
  • Developers sometimes opt for a PCC to cut costs, but lenders often view this as a red flag and may refuse to lend.
  • Working with a specialised mortgage broker who can take a holistic view of your application is crucial in these cases.
  • Carefully researching your new build’s warranty details and being prepared to justify the lack of a 10-year guarantee can increase your chances of mortgage approval.

To learn more about PPC certificates and how it affects the mortgage process, read on.

And to speak to an adviser for help in securing a mortgage for your new build with a PCC certificate, get in touch today.

Can you Get a Mortgage for a New Build with a PCC Certificate?

Yes, you can get a mortgage for a new build if it only has a PCC certificate compared to the standard 10-year warranty.

Not all lenders will accept your application, however, so it’s recommended to speak to a specialist mortgage adviser like ourselves to ascertain your best option.

Purchasing a new build property is an exciting prospect for many homebuyers in the UK. The allure of a freshly constructed home, with the latest design features and energy-efficient technology, can be a strong draw.

However, when it comes to securing a mortgage for a new build, there are often unexpected hurdles to overcome – particularly if the property does not come with the standard 10-year warranty.

In some cases, developers may opt to provide a Proprietary Consumer Code (PCC) certificate instead of the more widely recognised 10-year warranty. While this may save the developer money, it can significantly complicate the mortgage application process for prospective buyers.

Understanding the 10-Year Warranty and PCC Certificates

The standard 10-year warranty, often referred to as a new home warranty or a structural warranty, is a common feature of new build properties in the UK.

This warranty provides buyers with protection against major structural defects that may arise within the first decade of the home’s existence. It offers peace of mind and reassurance to homebuyers, who can rest assured that any significant issues will be addressed by the warranty provider.

In contrast, a PCC certificate is a less well-known and often less comprehensive alternative to the 10-year warranty, typically lasting only 6 years.

These proprietary consumer codes are developed by individual developers or construction companies, and they can vary widely in the level of protection they offer. Some PCC certificates may provide limited coverage, while others may have more robust protections in place.

The Mortgage Lender’s Perspective

For mortgage lenders, the presence (or absence) of a 10-year warranty is a critical factor in their decision-making process. Lenders view the 10-year warranty as a valuable safeguard, as it reduces the risk of significant structural issues that could impact the property’s value and their investment.

When a new build property does not have the standard 10-year warranty, but instead only a PCC certificate, lenders may view this as a red flag. They may be concerned about the level of protection offered by the PCC and the potential for costly repairs or maintenance issues down the line. As a result, lenders may be more reluctant to approve mortgage applications for these properties, or they may impose additional requirements or conditions.

Navigating the Mortgage Application Process

For homebuyers faced with a new build property that only has a PCC certificate, the mortgage application process can be more challenging. However, there are steps you can take to increase your chances of success:

1. Work with a Specialist Mortgage Broker

Engaging the services of a mortgage broker such as ourselves, who have experience in dealing with new build properties without the standard 10-year warranty, can be invaluable. We have established relationships with lenders who are more open to considering applications for properties with PCC certificates. We can also help you navigate the complexities of the application process and present your case in the most favourable light.

2. Understand the PCC Certificate

Thoroughly research the details of the PCC certificate provided by the developer. Familiarise yourself with the level of coverage it offers, any exclusions or limitations, and the process for making claims. Being able to articulate the strengths and weaknesses of the PCC certificate can help you address any concerns that a lender may have.

3. Demonstrate the Property’s Quality and Condition

Emphasise the quality of the construction and the overall condition of the property. Provide any available evidence, such as independent inspection reports or certification of the builder’s reputation and track record. This can help to allay the lender’s concerns about the lack of a 10-year warranty.

4. Highlight Your Financial Strength

Ensure that your financial profile is as strong as possible. This may involve having a larger deposit, a stable employment history, and a good credit score. Demonstrating your financial stability and commitment to the property can make you a more attractive borrower in the eyes of the lender.

5. Be Prepared to Negotiate

If a lender is hesitant to approve your mortgage application due to the absence of a 10-year warranty, be prepared to negotiate. Offer to provide additional collateral, agree to a higher interest rate, or consider a different lender who may be more amenable to your situation.

Conclusion

The lack of a 10-year warranty on a new build property can present a significant challenge when it comes to securing a mortgage. Developers who opt for a PCC certificate instead may be doing so to save costs, but this decision can have serious consequences for homebuyers.

By working with a specialist mortgage broker, understanding the details of the PCC certificate, demonstrating the property’s quality, and being prepared to negotiate, you can increase your chances of successfully obtaining a mortgage for a new build with a PCC certificate. Navigating this process may require extra effort, but the rewards of owning your dream home can make it well worth the investment.

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