Property

The minimum valuation for all residential lending is £40,000. 

All flats must have a minimum internal habitable floor area of 30sqm (excluding balconies or terraces).

Flats with balcony/ open deck access arrangements within the block are not acceptable.

Condition

The property must meet minimum criteria. It must be habitable, readily saleable, structurally sound and be able to have buildings insurance arranged upon it. We do not offer retentions. We will not provide a valid offer until any works considered essential by the Valuer are completed and confirmed as satisfactory.

Leasehold property

Leasehold properties must have a minimum unexpired term of 70 years at mortgage commencement, and 30 years remaining at mortgage redemption.

New build leasehold properties must have a minimum unexpired lease term of 123 years at mortgage commencement.

Estate Rentcharges

Our Estate Rentcharge criteria, subject to valuation and insurance being available on standard terms, is as follows:

Estate Rentcharges on properties built pre-2005 are acceptable.

Estate Rentcharges on properties built since January 2005 are capped to a maximum of:

  • 0.1% of Market Value per annum for new build houses
  • The higher of 0.1% of market value or £250 per annum for new build flats/maisonettes and all second hand/resale properties.

Estate Rentcharge must be keyed under “Ground Rent” to be included in the affordability assessment.

 

Ground Rent

Our Ground Rent criteria, subject to valuation and insurance being available on standard terms, is as follows:

Ground rents on properties built pre-2005 are acceptable subject to being reasonable throughout the lease term:

  • Increases linked to RPI or similar index are acceptable.
  • Ground rents which double periodically every 20 years or more are acceptable.
  • Ground rents which double periodically less than every 20 years are unacceptable.

Ground rents on properties built since January 2005 are subject to the above criteria, plus a maximum cap:

  • 0.1% of Market Value per annum for new build houses
  • The higher of 0.1% of market value or £250 per annum for new build flats/maisonettes and all second hand/resale properties.

Common hold property is not accepted.

 

Other Freehold Arrangements

We can proceed if the freehold of the whole building is mortgaged to us by the applicant and:

  • They are the landlord of the other flats (which must be held on a long lease) and 
  • The maximum number of flats within the whole building is four, including the flat we are being asked to lend against.

For flats within a building of not more than 4 flats where the customer owns a leasehold flat and is also the Sole freeholder of the whole building, our mortgage must be registered on both the freehold and leasehold titles.

If the flat has an element of leasehold you should check to make sure that they are purchasing the leasehold interest and a share of the freehold.

If the customer is purchasing a flat and becoming part of the Management Company (A separate legal entity) the flat should be treated as leasehold.

Freehold flats that do not meet the above criteria are unacceptable. 

High rise flats

There is no maximum number of floors permitting there is a lift to the floor of the subject property. 

For blocks without a lift, the subject property cannot be located higher than the 3rd floor (ground plus three). 

Flats above business premises

These can be considered subject to valuer’s comments. 

Properties which are above, adjacent or near to commercial premises may be acceptable subject to the following:

  • flats over commercial premises must be in separate ownership to the commercial premises
  • the proximity of the commercial use must not affect the quiet enjoyment of the property
  • consideration should be given to the location of the property 
  • the property must be located in a desirable area with good demand, readily saleable and readily marketable, for example properties which are adjacent to, or in very close proximity to a public house, night club, petrol station, laundrette, pet shop or hot food takeaway where the method of cooking is likely to cause smell or fumes would not be deemed as suitable security. 

Properties located above convenience stores / small supermarkets are acceptable. 

Any residential security must have a suitable access, which must not be through a business premises. 

Where the intended security is a flat situated adjoining or over the premises, the business property cannot be owned by the same person as this would have legal implications in the event of repossession. 

Studio flats

Studio flats are acceptable across the UK, subject to valuer's comments and a minimum habitable internal floor area of 30sq (excluding balconies or terraces).

Ex Local Authority properties

The maximum number of floors acceptable to TSB in an ex-local authority block is 6 storeys (ground plus 5). Blocks higher than this are unacceptable. This also applies to maisonettes and Scottish Tenements.

The property must be readily saleable and not a lone owner occupied flat within a Local Authority tenanted block. The property must be of standard construction.

Japanese knotweed

We can consider properties with Japanese Knotweed subject to a specialist report which must be provided to the valuer. 

If it is identified as category 3 or 4, a full report and detailed treatment plan must be provided. Stage 1 of the treatment plan must have been completed, with a 10 year insurance backed guarantee before TSB would look to lend. 

These properties are still subject to valuer's comments and if declined, there is no right of appeal. 

Solar Panel Leasing Agreements

Solar Panel Leasing Agreements are now acceptable within a policy, subject to meeting our minimum requirements.

Please contact us for further information.

Distressed sale and leaseback

Applications that involve a distressed sale or a sale and leaseback are not acceptable.

Construction

Property acceptability is based on a satisfactory valuation report from the bank’s appointed valuer. Non-standard construction will be assessed on individual merit. Certain types of pre-cast reinforced concrete (PRC) construction are designated defective and may not be acceptable unless repaired.

Unacceptable Property/Construction Types

  • Timber or metal-framed buildings where the cavity, between frame & cladding, has been retrospectively filled with an insulation material.
  • 100% Timber built property (i.e. full timber frame with full timber cladding and no brick / blockwork at ground level).
  • Houseboats and mobile homes / park homes are not acceptable.
  • Concrete walls as built in Cornwall or Devon before 1950 where valuer has recommended a Mundic report and test of the concrete has classified the concrete in class A1-A3, A/AB.
  • Unrepaired, designated defective properties under the Housing Defect Act or not.
  • Properties of large panel system type.
  • Non traditional houses where adjoining property hasn’t been repaired.
  • Load bearing panels of asbestos or gypsum plaster construction.
  • Properties with more than 10 acres of land.
  • Properties which are structurally unsound.
  • Properties which are uninsurable.
  • Properties with restricted occupancy / covenants, including:
    – Age Restriction e.g. over 55’s.
    – Time spent at property e.g. 11 / 12 Months.
    – Restricted to agriculture use.
  • Single Skin construction > 1 Storey.
  • Studio Flats with less than 30sqm internal habitable floor area.
  • Steel frame construction post 1987 without a WIMLAS or BBA certificate or an acceptable structural engineers report.
  • Steel framed construction pre 1987 without a satisfactory valuation report compliant with Building Research Establishment (BRE) guidance BR113 and a structural engineers report on condition.
  • Properties with a cladding system that does not meet Fire Safety requirements as required by The Building (Amendment) Regulations 2018.
  • Live/work units
  • Grade 2* listed properties.

 

Use of property

  • Property must be assessed as an individual residential property intended for owner occupation
  • Farms or property with land that is subject to commercial agricultural use, commercial property and timeshare are not acceptable
  • Limited incidental business use may be acceptable subject to property retaining residential status.

Live/ work units are not acceptable to TSB.