Top mortgage provider 'blacklists' two new city centre housing estates

Two of Derby’s most pivotal housing developments for a generation have been effectively blacklisted for mortgages by Nationwide. Both the Castleward scheme and the Nightingale Quarter, representing a combined £275 million of investment and a total of 1,625 homes in the city centre, have been added to a “closed site list” by Nationwide, barring them from mortgage applications.

The building society says new-build developments can be added to a “closed site list” after being assessed by an area valuer who will analyse “a variety of factors including location, quality, ground rent and future saleability”.

Both schemes have received extensive praise from the city council, Homes England and Members of Parliament, with the now Prime Minister and deputy touring the Nightingale Quarter earlier this year and a photo call taking place at the Castleward site last week. The £175 million Nightingale Quarter, comprising 700 homes, from Wavensmere Homes, and the £100 million Castleward scheme from Lovell and Compendium Living, represent a significant part of Derby’s redevelopment and a substantial portion of the city’s new-build housing.

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Donna Smith, sales director for Wavensmere Homes, said: “We are immensely proud that only 29 of the 925 Nightingale Quarter homes remain for sale. While the six-year construction programme won’t conclude until the end of next year, this scheme will be a sell-out success long before then.

"This multi-award-winning project has captured national and regional attention and is already home to over 1,000 new city dwellers. The stunning Pepperpot restaurant – situated at the heart of the scheme – opened in February, receiving high acclaim from food critics and local residents.

“It was only a few months ago that Sir Keir Starmer and Angela Rayner enjoyed meeting with Nightingale Quarter residents and the construction team, followed by Sir Tim Smit of the Eden Project’s unveiling of the community garden. This landmark scheme is injecting £175 million into the local economy and created hundreds of construction jobs while delivering a highly sustainable legacy within the city centre.

“It is always difficult to bring mortgage lenders along a regeneration journey, even with such an innovative transformational scheme and the extent of critical mass we have here. Getting the lending market to buy into a development vision is not easy.

“The frustration for us is when we don’t have the opportunity to state the case and talk through our plans, with the lender ultimately behind the mortgage surveyor. However, the resale and rental values of our homes tell a remarkable story.

“Furthermore, while ground rents have been in the news, Nightingale residents only pay a ‘peppercorn’ ground rent of £1 per annum, which is in line with the most recent Government recommendations.”

James Dickens, managing director of Wavensmere Homes, said: “When we acquired this vacant site five years ago, we set out to design a landmark scheme that embraced the DE1 location and didn’t turn its back on the city centre. We are proud that our 925 apartments and houses have transformed the city living market, acting as the catalyst for thousands more homes to be delivered within central Derby.

“By installing new footpaths, cycle routes, roads, co-working space, a gym – and making a restaurant Nightingale Quarter’s new focal point – this redundant hospital site is once again a vibrant community asset.”

A spokesperson for Lovell and Compendium Living said: “It is not uncommon for a specific mortgage provider to pull away from a larger development, this is due to increased exposure in the area and is not usually a permanent move. There are plenty of other mortgage providers who will still offer products to potential purchasers.”

A spokesperson for Derby City Council said: “The Nightingale Quarter and Castleward developments have regenerated and repurposed key areas of our city centre, creating welcoming communities with easy access to the city centre and railway station for hundreds of people. We can’t comment on the decisions of mortgage providers.”

A Nationwide spokesperson said: “As a responsible lender, we must ensure there are no issues that could impact the future marketability or saleability of properties we lend on to ensure that we protect all our borrowers.

“Each individual newbuild development is visited and assessed by Nationwide before a decision is made. We regularly engage and are committed to working with developers during this process and will discuss any identified issues and how these might be rectified.

“There are a range of factors that could result in Nationwide being unable to lend on a specific development or property, including the price and demand, onerous charges and restrictions related to the building, the use of incentives purely for the initial buyer, build quality and even our own lending exposure on a particular development. However, we are always open to reviewing decisions in light of remedial action taken by developers.”

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