Property

General policy | Buy-to-Let policy | Income | Property | Special lending situations

 

Index

• Overview
• Construction
• Acceptable property types
• Unacceptable property types
• Properties with land
• New builds/new conversions and recently built/recently converted properties
• Tenure

Overview

The property must be situated in England, Wales, Northern Ireland or Scotland and must be Freehold, Leasehold, Commonhold (or Absolute Ownership (Scotland only).

 

The property must be of good quality, in good condition, of traditional construction and must be a single dwelling used solely for residential purposes.

 

All new lending will require the mortgaged property to be valued at £40,000 or more.

 

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Construction

• Conventional brick/tile/stone/slate
• Thatched house
• Any other types of property construction, please contact your Business Development Manager

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Acceptable property types

Converted or purpose-built flats

 

• Local-authority blocks not acceptable over 4 storeys

Flats over shops

 

Flats over shops are defined as all flats in a block which are above shops not just those immediately above the shop premises.

 

• The whole property must be in good condition with no repairs required (except minor cosmetic ones)
• The owner of the flat and the shop cannot be the same person as this would have legal implications in the event of repossession

If the LTV is greater than 60%:

 

The case will be referred to underwriters and the following information will be requested:

 

• Who owns the shop/office below
• The nature of the business
• Position of property/general use
• Saleability issues

Please do not refer any of the following applications to Underwriters:

 

• Properties that are not situated in a city centre location
• Buy-to let properties
• Flats over take aways or restaurants
• Properties of low value – anything below £150,000
  

For further information please contact your Business Development Manager or our Product and Policy line on 0845 604 1206.

 

Studio flats

 

• Mortgage underwriters will consider studio flats in some circumstances

Ex-council house/flat

 

Adjoining Or adjacent properties

 

The following applications are acceptable where the customer wants to purchase the adjoining property:

 

• Where a customer lives in one property and proposes to buy (or remortgage) the property next door
• Where an adjoining flat (above, below or to the side) is to be purchased (or remortgaged).

If a customer buys (or remortgages) two or more adjoining properties with the intention of converting them into one large property, the application must be referred to Underwriters. Three valuation figures will be obtained by the valuer, but the customer pays only one valuation fee.

 

If the customer is buying or remortgaging two adjacent/ adjoining properties which they are not intending to convert into one property, then the case can proceed as normal and no referral to Underwriters is required.

 

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Unacceptable property types

• Properties with no inside WC
• Properties with no bathroom
• Farm/small holdings and properties where there is land subject to current agricultural use are unacceptable
• Town-planning restrictions – properties with a town planning restriction that mean they can be occupied only by a person employed in agricultural are unacceptable
• Properties with time restriction on occupancy

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Properties with land

Up to and including 10 acres of land are acceptable, provided there is vacant possession and no farming activity or agricultural planning restrictions.  For remortgages there must be no tenancies in place.

 

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New build/new conversions and recently built/recently converted properties

All new-build or new conversions and all ‘recently’ built/converted properties must either have a warranty from a provider*, or a professional consultant’s certificate in a format provided by the Council of Mortgage Lenders signed by a person with an acceptable qualification**, (see below for acceptable warranties/qualifications).

 

A new-build or new conversion is defined as any property mortgaged within 6 months of being occupied for the first time.

 

‘Recent’ is defined as any property built or converted within ten years of the date of mortgage application.  

 

Converted includes:

 

• Flats formed by the conversion of a house or of an industrial building such as a warehouse.
• Houses formed from the conversion of barns, schools, or churches.

*Warranty providers acceptable to Lloyds TSB Bank plc (the lender for C&G mortgages) are:

 

• National House Builders Council (NHBC).   
• Zurich Municipal (no longer offering new policies, but honouring existing commitments).
• LABC New Homes Warranty.
• Premier Guarantee.
• BLP Housing (Building Life Plans)
• Self-Build Zone or Build Zone.
• CRL (Construction Register Ltd).

**Qualifications acceptable to Lloyds TSB Bank plc are:

 

• An architect registered with the Architect Registration Board (including RIBA qualified).
• A chartered architectural technologist who has the designation M.C.I.A.T.
• A full member of the Royal Institution of Chartered Surveyors who has the designations of either M.R.I.C.S. or F.R.I.C.S.
• A fully qualified civil engineer with the designation of either M.I.C.E or F.I.C.E.
• A fully qualified structural engineer with the designation of either M.I. Struct E or F.I. Struct E.

The above requirements also apply to individually designed properties.

 

The legal adviser has responsibility to establish compliance with these requirements. Lack of compliance may become apparent during the mortgage process and might mean that the loan cannot be approved.

 

Any application where the above certification has not been obtained for the property will be declined; the application can not be referred to Underwriters.

 

Disclosure of Incentives Form

 

The Council of Mortgage Lenders has introduced a Disclosure of Incentives form which must be completed by the developer for all new build properties (including properties that have been newly converted or renovated). The form must be made available to the valuer and the conveyancer.

 

If the person raising the mortgage actually built the property, a builder's incentives form is NOT required.

 

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Tenure

• Freehold property
• Leasehold house/flat
• Absolute ownership house/flat (Scotland)
• Commonhold (flat)
• Flying freehold (subject to solicitor/valuer approval)
• Minimum lease required on application is 70 years
• Minimum lease required on redemption is 30 years

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