The Society will accept applications for advances on private dwelling houses of varying types, from terraced houses to detached properties, including leasehold flats, providing they are in the category of Standard Construction.
The standard type of construction that is acceptable to the Society will normally be cavity brick or block wall type of construction with a tiled or slated pitched roof having suspended timber or concrete ground floor with timber joists for the first floor
Brick or block clad timber frame properties will also be acceptable to the Society provided that they have been erected in accordance with the accepted principles of timber framed construction. The Society will rely on an independent valuer’s report to confirm this.
Refer any application for non-standard construction property for consideration on an individual case basis.
New Build Properties
a. Sales incentives
Builder/Developer sales incentives must be disclosed in the ‘Material Information’ section of the Mortgage Application Form. The value of sales incentives will most likely influence the mortgage valuation of the property and therefore may impact on the maximum advance available.
The CML Lenders Handbook (H&RBS – 6.4.4) requires the solicitor acting to report all sales incentives.
b. New build loan LTV limit
The maximum LTV for new build houses and flats is 90%.
Please refer details of all newly converted flats prior to submitting an application.
c. New build warranties – Properties less than 10 years old
The following acceptable new build warranty schemes are listed in section 6.7.1 of the HRBS entry in the CML Lenders Handbook.
NHBC, Zurich Municipal (up to 30/09/09), Premier Guarantee, Building Life Plans, LABC, Castle 10, & Build Assure. Other schemes may be referred for consideration on an individual cases basis.
d. New build properties – re-inspections
A reinspection may be requested by the independent valuer for all new build properties which are not fully completed at the time of the initial inspection, for which a fee will be charged as outlined in the current Tariff of Mortgage Fees. This fee will be deducted from the mortgage advance monies.
There must be at least 85 years remaining on the lease when the mortgage starts, and a minimum of 50 clear years remaining on the lease at the end of the mortgage term.
The Society’s basic legal requirements for leasehold properties are described in the Society’s entries in section 5 of parts 1 & 2 of the CML Lenders Handbook (cml.org.uk/cml/handbook).
Purpose Built or Converted Flats and Maisonettes
Must be Leasehold with appropriate lease arrangements for the management of the property as a whole.
Refer if in a block of more than 6 storeys.
Leasehold flats created by the conversion of larger properties will be considered subject to adequate valuation and acceptable lease arrangements.
For converted flats and maisonettes resulting from the conversion of a single private dwelling house, it is strongly recommended that you check before submitting any application that the lease and independent incorporated management company arrangements meet all of the requirements detailed in the Society’s Part 1 & Part 2 entries in sections 5.14 and 5.15 of the CML Lenders’ Handbook (cml/org.uk/cml/handbook). If an offer of advance is made, the solicitor acting in the creation of the charge will be required in all cases to confirm compliance with these requirements.
Properties we will not normally consider
Flats and maisonettes directly above commercial premises, flats in former local authority high rise blocks, freehold flats, problematic inner city new build developments, properties with more than one kitchen, properties designed or converted for multiple occupation.
Property Assessment & Property Assessment Fees
In all cases, the Society instructs its Panel Manager to arrange for an independent local ARICS qualified valuer to carry out an assessment of the property for mortgage purposes only.
Applicants must be informed that this assessment of the property is for the sole purpose of determining the amount of mortgage the Society may consider lending against the security of the property. Purchase applicants should be advised to obtain their own property survey.
The type of Property Assessment the Society requires will vary with the type of mortgage application.
For all property purchase and BTL remortgage applications, the property assessment will normally be by standard mortgage valuation based on a brief inspection of the property.
For residential remortgage applications (up to 80% LTV), the property assessment will normally be by Drive-By valuation, as long as the property is sufficiently visible from the road. Additional fees will be payable if the valuer is unable to provide a Drive-By valuation, or other types of property assessment are necessary.
Please refer to Product Guides and Key Features leaflets for details of the Property Assessment Fees that are payable. Any property assessment fee must be paid at the time of submitting an application to the Society.
The Society will rely initially on the information provided in the mortgage application form, and will issue property assessment instructions as soon as practicable after receipt of the mortgage application form. It is not possible to underwrite the application before issuing property assessment instructions.
Once the property assessment has been completed, the property assessment fee cannot normally be refunded.
Posted in: Guide to Terms & Underwriting