The minimum valuation amount for all lending is £40,000. All flats must have a minimum habitable area of 30 sqm (excluding balconies or terraces).
The property must meet minimum criteria. It must be habitable, readily saleable, structurally sound and be able to have buildings insurance arranged upon it. The mortgage advance may be wholly or partially retained pending completion of works required to bring the property to a suitable condition for lending.
For leasehold property there must be a minimum of 70 years remaining on the lease at completion. Shorter lease terms are only accepted on certain central London estates and subject to specific criteria.
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
- They occupy one of the flats or are entitled to rental under short term tenancies / AST (not ground rent payment under 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 are unacceptable.
High rise flats
A high rise block of flats is classed as a block containing more than four storeys, including the ground floor.
We will not consider an application for a mortgage where there are more than 8 storeys within the block (ground floor +7 floors).
Flats above business premises
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. This is not an exhaustive list 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 are unacceptable (excluding central London > 30 sqm). Central London is defined by the following postcodes:
Local Authority properties
We will not consider a mortgage application for ex-local authority flats where there are more than four storeys in the block. This also applies to maisonettes and Scottish tenements.
Balcony / open deck access arrangements within the block are not acceptable
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
We can consider properties with Japanese knotweed subject to a specialist report outlining the issues and a quote from a treatment company who offer a warranty-backed treatment regime. These are still subject to valuer's comments and if the valuer declines the property, the application will be not be progressed, with 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.
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
- Houseboats and mobile homes/park homes are not acceptable
- Concrete walls as built in Cornwall or Devon before 1950 (1960 for postcodes PL12, 13, 14, 15, 17, 18, 22 & 23) where valuer has recommended a Mundic report and test of the concrete has classified the concrete in either class B or C
- Unrepaired, designated defective properties under the Housing Defect Act or not
- Flats or maisonettes of large panel system type.
- Load bearing panels of asbestos or gypsum plaster construction
- 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
- Non traditional houses where adjoining property hasn't been repaired
- Single Skin construction > 1 Storey
- Large Panel System Flats
- Blocks of flats > 8 storeys
- Studio Flats (excluding Central London)
- Steel frame construction pre-1987
- Steel frame construction post-1987 without BBA or WIMLAS certification are acceptable
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 schemes may be acceptable on mainstream lending only, subject to compliance with planning condition and 'work' element using less than 30% of the property.