Property

Condition

Valuers will also consider positive and negative factors of marketability particularly relating to landlord obligations, i.e Renters Rights Act.

Energy rating

All privately rented properties in England & Wales must meet the minimum energy efficiency regulations by law. We will not accept properties with Energy Performance Certificates (EPCs) of F & G unless a valid exemption has been registered. If improvements need to be made to improve the EPC rating of the property, we will not provide a mortgage offer until the improvements have been completed and an updated EPC is available confirming the higher rating.

The Private Rented Sector (PRS) Exemption Register can be found here - https://prsregister.beis.gov.uk/NdsBeisUi/register-search-exemptions

The EPC register can be found here - https://www.epcregister.com

Estate Management/Maintenance Charges and Service Charges for Freehold Properties

Freehold properties that are subject to an estate management/maintenance/service charge or any additional monthly charge should meet the below criteria.

Subject to valuation and insurance being available on standard terms is as follows:

• Charges on properties built pre-2005 are acceptable.
• Charges on properties built since January 2005 are capped to a maximum of the higher of 0.2% of the Market Value or £500.
• Charges must be keyed under "Ground Rent" to be included in the affordability assessment.

Service Charges for Leasehold Properties

Service charges are acceptable subject to surveyor's comments on marketability and saleability.

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.

When a lease is below 85 years, this could impact the marketability of the property and will therefore be subject to the local valuer’s assessment

Flats with balcony/open deck access

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

Where there is no lift in the block, and the subject property is located higher than the 4th floor (ground plus three floors) this would be unacceptable. 

Flats in blocks with balcony / deck access are acceptable subject to:

• Must have secured access at ground floor level (i.e. gates / electronic entry / security guard)
• Valuer must confirm the property is marketable and mortgageable.
• All other property policies apply, e.g. cladding, maximum number of floors with/without a lift.

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 19 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.

Commonhold property is not accepted.

Leasehold Reform (Ground Rent) Act 2022

Ground rents on New Build Leasehold properties since 30th June 2022 are subject to meeting Government reform rules being that the ground rent must not be greater than a peppercorn amount per year (Cannot be greater than £1 annually) for it to meet our criteria to lend on the property.

TSB will not lend on New Build properties where the lease was created after the 30^th June 2022 and the ground rent is higher than a peppercorn.

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.

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). 

Ex local authority properties

Ex-local authority flats are acceptable subject to:

• A meaningful level of private ownership in the block, as determined by the valuer.
• The flat is readily saleable and marketable.
• There is no height or floor limit of Ex-Local authority blocks, however the subject flat being mortgaged to TSB must be located no higher than 6 storeys high (ground plus 5). Other criteria in relation to lift access applies.

Ex-local authority flats are not considered unless the majority of the building is owner-occupied.

The property must be of standard construction.

Properties above, adjacent or near to commercial premises

These can be considered subject to valuers’ comments.

Properties which are above, adjacent, or near to commercial premises may be considered subject to:

• Having a clear separate ownership title to the commercial premises with no ties/restrictions.
• Having direct external access.
• The use not affecting the quiet enjoyment of the property or impacting marketability and/or value.

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.

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 30sqm (excluding balconies or terraces).

Unacceptable properties

• Any property over which buildings insurance cannot be arranged on standard terms
• Properties which are structurally unsound
• Properties which are not immediately and readily lettable
• Bed-sits, houseboats and mobile / park homes
• Properties with less than 30sqm habitable internal area
• Property split into separate units of accommodation (e.g. house converted into two flats without separate leases) and Multi Unit Freehold Blocks (MUFB)
• Flats over shops where the owner of the shop and flat would be the same
• Freehold flats that do not meet our freehold arrangement policy
• Thatched properties
• Live / work units
• Properties with restricted occupancy/ covenants
• Grade 1 & Grade 2* listed properties in England & Wales (Grade 2 acceptable subject to survey)
• Grade A listed properties in Scotland
• 100% timber built property (i.e full timber frame with full timber cladding and no brick / blockwork at ground level)
• Farms/ small holdings or other properties where there is land subject to current agricultural use
• Non-traditional PRC houses where the subject property and any adjoining property has not been repaired (PRC Flats and Maisonettes are unacceptable in all circumstances)
• Properties of large panel system (LPS)
• Single skin construction is only acceptable for an extension at ground floor level
• Properties with more than 10 acres of land
• Properties containing Mundic block materials are unacceptable (unless the property has a valid Mundic report with a scored rating of A1-A3, A/AB only)
• Septic tanks that drain directly into water courses and fail to meet current regulations
• Steel framed construction pre 1987 without satisfactory valuation report compliant with Building Research Establishment (BRE) guidance BR113 and a structural engineers report on condition
• Steel frame construction post 1987 without a WIMLAS / BBA certificate or an acceptable structural engineers report

Number of Rooms