Property

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.

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.

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

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.

Common hold 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 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 4^th floor (ground plus three floors) this would be unacceptable.  

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.

Properties above, adjacent or near to commercial 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. 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.

Specialist reports

If a specialist report is required as part of the valuation process, the following are examples of acceptable qualifications and professional memberships:

• Gas Safety Certificates – Gas Safe (formerly CORGI) registered engineer.
• Timber and damp report – Property Care Association members, or members of the RICS with relevant experience.
• Electrical reports – members of one of the following:
  • NICEIC
  • ELECSA
  • NAPIT
  • EntECA
  • BSI
• Structural engineers report – one of the following qualifications:
  • MIStruct.E
  • FIStruct.E
  • MICE
  • FICE
  • MRICS
  • FRICS

Other specialist reports such as mining, agricultural, Mundic, environmental, arboricultural and drainage reports do not require the individual to be a member of any particular body, but they should be determined as a suitably qualified expert.

The report and any attached guarantees should be transferable to any owner and lender in possession. In most circumstances, we would expect a specialist report to be dated within the last 12 months.

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).

Where all or part of the mortgage is to be conducted on an interest only basis, and the repayment vehicle is ‘sale of the security property’ Studio Flats are not acceptable.

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 4^th 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.

Japanese knotweed

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

Where a category A infestation is identified, we will not lend.

Where a category B infestation is identified, we require further investigation by a competent specialist who is able to provide a 5-year insurance backed guarantee. We will not lend until any required eradication works have been completed.

Category C and D infestations are subject to valuer’s comments.

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

• Any property over which buildings insurance cannot be arranged on standard terms
• Properties which are structurally unsound
• Bed-sits, houseboats and mobile / park homes
• Properties with less than 30 sqm internal habitable floor area
• Properties split into separate units of accommodation (e.g. house converted into two flats without separate leases)
• 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
• Live / work units
• 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
• 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

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.