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FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

Property

The minimum valuation for all lending is £50,000.

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

Flats with balcony/ open deck access arrangements within the block are acceptable subject to specific criteria – see Flats with balcony/open deck access for more information.

Condition

Not available for properties which require renovation prior to letting. This does not include minor redecoration, but the property needs to be in sufficiently good condition that the valuer believes it is immediately habitable and can provide an immediate rental figure per month. For example, where a property requires complete replacement of the bathroom and/or kitchen, this would render it ineligible for a BTL application.

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

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 Management Charges

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

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

Flats with balcony/open deck access

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

  • Maximum 6 storeys including ground floor in block
  • 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.

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). 

Flats above business premises

These can be considered subject to valuers’ 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. 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

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).

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. 

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

The property must be of standard construction.

Unacceptable properties

  • Flats with less than 30sqm habitable internal area (excluding balconies or terraces).
  • Bed-sits
  • Property split into separate units of accommodation (e.g. house converted into two flats without separate leases)
  • Freehold flats (where a building has been split and separate freehold titles created for each individual flat and no leases exist within the property)
  • Flats over shops where the owner of the shop and flat would be the same
  • Farms/ small holdings or other properties where there is land subject to current agricultural use
  • Any property over which buildings insurance cannot be arranged on standard terms
  • Grade 1 & Grade 2*STAR (Grade 2 acceptable subject to survey) listed properties
  • Thatched properties
  • Non-traditional PRC houses which have not been repaired (including any adjoining properties)
  • Single skin construction is only acceptable for an extension at ground floor level
  • Large panel system properties
  • Properties with more than 10 acres of land
  • Properties with restricted occupancy/ covenants, including:
    • age restriction e.g over 55s
    • time spent at property e.g. 11/ 12 months
    • agricultural use.

Number of Rooms

A property must have at least a kitchen and one living room to be suitable for mortgage (excluding studio flats, see above).