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The property must meet minimum criteria. 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.
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.
Applications that involve a distressed sale or a sale and leaseback are not acceptable.
We will lend subject to the valuer confirming the property is suitable mortgage security and providing a present condition valuation figure. To assess the property the valuer will require a report outlining the issues and a quote from a treatment company who must either be a member of the Property Care Association or be able to offer a warranty backed treatment plan. If treatment is advised and where possible, then this is often over 3-4 years.
An initial occupancy/ new build is any property being occupied and/or sold for the first time on the open market in its current state and includes converted and refurbished properties.
These will fall into one of four categories:
Property must be subject to one of the following requirements:
All new build properties when being purchased for the first time must either have a warranty from a provider (see below for acceptable warranty providers), or a professional consultant's certificate in a format provided by the Council of Mortgage Lenders signed by a person with an acceptable qualification.
Where developments contain more than 5 units we may place a limit on the percentage of properties we will lend against on that particular site. Where the limit has been reached, the valuers will decline to carry out a valuation and will advise accordingly.
Acceptable Warranty Providers
Confirmation of what warranty is in place is required. This should be received prior to offer.
Builder cash incentives include but are not limited to deposit contributions, cash-backs, contribution to legal fees/stamp duty, mortgage subsidies.
Builder cash incentives will typically be acceptable provided the value of these does not exceed 5% of the lower of purchase price/valuation. Cash incentives in excess of this amount may result in a reduction in the maximum loan available. All builder cash incentives must be declared at the point of sale.
All lending decisions are based on valuation or purchase price (whichever is lower).
If the purchase property address changes once a mortgage application has been made, and the customer’s original mortgage product has been withdrawn, a new product from the current range must be selected.
If the property being purchased is not changing but an amendment is required to the address keyed e.g. property number or street name this must be amended by us prior to completion. You should contact us to make this change.
Let’s your customer apply for a mortgage on a property to be used primarily as a holiday or second home
Sub-sales and back-to-back transactions are not acceptable.
A sub-sale occurs when a property is bought and then sold on within six months, i.e. the borrower is buying the property from someone who has themselves bought the property less than six months before. The date of registration at the Land Registry is how we determine the length of ownership.
This means that the current vendor must have owned the property for at least six months before we can accept an application to purchase that property, unless the property has been inherited.
A back-to-back transaction is a type of sub-sale where the intervening seller buys from the original seller and sells on to the borrower on the same day or within a few days. We also regard as sub-sales, cases where the seller acquires the freehold (or superior leasehold) title to the property, which they then immediately sell on to the borrower by the grant to them of a lease (or sub-lease).
The following cases are exceptions where it is acceptable for the property to be sold on within six months of acquisition by the seller.
Where sales are by:
We will also accept Inherited properties where the applicant is a beneficiary but has not owned the property for 6 months. The conveyancer will be responsible for ensuring the application meets the acceptable criteria.
Applications which involve assignable contracts or irrevocable powers of attorney in favour of intervening sellers are not acceptable. Any other structure to the transaction which has a similar effect should be reported to us.
Each application will be assessed on its own merits although there are some property types which are specifically excluded.
Further advice can be found here.
Timber or metal framed buildings where the cavity, between frame & cladding, has been retrospectively filled with an insulation material.
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 Act 1985, Housing (Scotland) Act 1987, Housing (Northern Ireland) Order 1986 are not acceptable.
Flats or maisonettes of large panel system type unless acceptable structural appraisal on the whole block.
Load bearing panels of asbestos or gypsum plaster construction .
Properties which are structurally unsound & Properties which are uninsurable.
Before we can make an advance, we must have a mortgage valuation that takes into account any factors likely to materially affect the value.
The valuation figure is currently valid for six months.
Properties for sale in England, Wales and Northern Ireland must have an Energy Performance Certificate which details the energy rating of the property. The Energy Performance Certificate is not a replacement for a valuation or property survey.
In Scotland, most sellers must provide a Home Report, part of which will include a survey (Scottish Single Survey) and may include a Generic Mortgage Valuation Report (GMVR) which the purchaser and any eventual Lender may rely on.
Where an application relates to a property still being constructed, the valuer will provide a valuation figure based on the assumption that construction is completed to a satisfactory standard.
The appropriate Special Condition will be included in any Mortgage Offer.
For full details about the cost and types of valuation available through our surveyors, visit Charges and Valuation Fees.
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