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Lending criteria

M - R

Property

Unacceptable Properties

The following section provides general guidance on the types of property that the bank will not consider.

This list is not exhaustive and any queries not covered here should be directed to us in the first instance prior to submission of any application.

We do not lend on the following types of property:

  • Agricultural restrictions
  • Freehold flats / maisonettes
  • Live / work units
  • Mobile homes / river boats
  • Shared equity
  • Low cost housing / restricted resale covenant schemes
  • Sheltered housing and properties with restricted age for the occupants
  • Properties which cannot be occupied for 365 days per year
  • Care homes, kennels, catteries, caravan parks and working farms are considered predominantly commercial propositions and are not considered suitable for residential mortgage purposes
  • Studio flats with internal floor space of less than 30sqm
  • Houses in Multiple Occupation (HMOs)

If there are any queries that are not listed, please contact us in the first instance.

Buy to Let

Residential property in either owner occupied areas or in predominantly tenanted areas will be considered. Consideration will be given to demand for purchase and rental of the type of property being purchased.

Multiple Buy to Lets

This type of property will be considered where the property is split into several self-contained units, each with its own leasehold and where:

  • The conversion is to a good standard and complies with Planning and Building Regulation requirements at the time of conversion
  • Maximum of 4 self-contained units in the building
  • Each unit must have its own Kitchen, Bath or Shower and WC and these must be located wholly within the  self-contained unit

Minimum Energy Efficiency Standards (MEES)

Regulations effective from 1st April 2018 require that in order to let a property, the EPC must show an energy rating of E or above subject to certain exemptions.

For all BTL cases the Bank's Valuers will check whether the MEES meets the required Standard. If the EPC does not meet the required standard, the application will be declined as unsuitable security for the BTL lending.

Ex-local Authority Flats/Maisonettes

Mortgages and re-mortgages on former local authority flats and maisonettes in blocks of 7 storeys and less are acceptable, providing the property meets our guidelines.

Deck / Balcony Access - where the flat is accessed via a Deck or Balcony and this is considered detrimental to the use and/or value of the flat, the property should be declined. To be acceptable, should have suitable entrance doors to stairwells and be located in areas of good owner occupier demand.

Flats Above/Adjacent to Commercial Premises

These are properties are deemed acceptable where:The commercial part of the property will not deter prospective purchasers and will not be detrimental to the enjoyment of the flat. This will be determined by the Bank’s Valuer.

  • In the context of the block and the block in the context of its surroundings the property is considered reasonably saleable.
  • There is complete separation between the shop unit and the commercial premises has its own entrance.

    Land/Large Acreage

    The amount of land that will be included within the valuation is a maximum of 2 acres. The whole area of the land will form the security for Clydesdale Bank. Any added value created by any additional land will not be included in the valuation.

    We do not impose an actual overall limit however consider saleability in relation to the size/type of residence.

    New Home Guarantees

    Properties less than 10 years old should be covered by one of the following guarantees:

    • NHBC
    • Zurich
    • Build Zone Structural Warranty
    • Checkmate Castle 10
    • LABC New Home Warranty (Local Authority Building Control)
    • BLP (building Life Plans)
    • Premier Guarantee
    • HAPM (The Housing Association Property Mutual Scheme)

    We will also accept a Professional Consultant's Certificate (e.g. an architect completion certificate) that complies with section 6 of the CML (Council of Mortgage Lenders) handbook is also acceptable (details below):

    We do not lend on property conversions prior to or during construction.

    Larger scheme conversions such as office to residential with a normal builder/developer selling multiple units will be considered in a similar way to new build lending on the completed property only.

    Please note that we will not accept warranties or professional consultant’s certificates that are offered retrospectively.

    Freehold Flats

    We do not accept Freehold Flats

    High Rise Blocks of Flats

    We accept properties in blocks of greater than 7 storey's where:

    • The block was originally constructed for owner occupation and not for Local Authority housing. 
    • New or recently constructed/converted blocks, where the property to be mortgaged is for full owner occupation or shared ownership are likely to be acceptable subject to valuation;
    • The block is formed of concrete or steel frame, with an external face of brick, block or other robust cladding/rain screen e.g. stone, glass or metal.
    • Access to flats on floor 5 or above must be provided by a lift. Where this is not the case the application will be declined.
    • Where a flat is located on the 4th storey or below, there is no requirement for a lift to be provided irrespective of the number of floors to the block.

    Japanese Knotweed

    Japanese Knotweed is an invasive and aggressive plant introduced into the UK with no effective natural predators. The plant is known to exploit existing weaknesses in buildings. Japanese Knotweed will be reported by the Valuer in accordance with the following policy:

    Category 4

    Japanese Knotweed is within 7 metres of the main building, habitable spaces, conservatory and/or garage and permanent outbuilding, either within the curtilage of the property or on neighbouring land;

    and/or

    Japanese Knotweed is causing serious damage to permanent outbuildings, associated structures, drains, paths, boundary walls and fences.

    We require further investigation from the Valuer

    Category 3

    Japanese Knotweed is present within the curtilage, but it is more than 7 metres from the main building, habitable spaces, conservatory, and/or garage and permanent outbuilding. If there is damage to outbuildings, associated structures, paths and boundary walls and fences, it is minor.

    We require further investigation from the Valuer

    Category 2

    Japanese Knotweed was not seen within the boundaries of this property, but it was seen on a neighbouring property or land. It is within 7 metres of the curtilage of the subject property, but more than 7 metres away from the main building, habitable spaces, conservatory and/or garage and permanent outbuildings.

    Report in the valuation report and value the property. No further investigation or action required.

    Category 1

    Japanese Knotweed was not seen on this property, but it can be seen on neighbouring property or land where it was more than 7 metres away from the curtilage of the subject property.

    Report in the valuation report and value the property. No further investigation or action required.

     

    Occupancy Restrictions

    We will not accept the following occupancy restrictions:

    • Holiday Lets
    • Unable to occupy a property for 365 days per year
    • Agricultural Restrictions / Ties
    • Section 106 (any - including affordable housing, for example any re-sale restrictions geographically, person type)
    • Age restriction, for example retirement flats for over 55s
    • Live / Work units

    Construction - Standard and Non-Standard

    Standard construction for residential properties is classed as:

    • Main walls are of masonry i.e. brick, block or stone and cavity or solid walled
    • Main walls of modern timber frame with a masonry external skin will be classed as standard construction
    • Main walls of modern steel frame with a masonry external skin will be classed as standard construction if originally constructed with a NHBC guarantee
    • Main pitched roof covering is tiled or slated or a modern metal sheet roof (not a corrugated iron roof covering)
    • Main flat roof covering is felt, asphalt or GRP. Up to 100% purpose built flats, 25% other property
    • Main roof structure is of timber cut or trussed or a steel framework

    Properties of non-standard construction

    • If the property is of a non-standard form of construction it will be considered on an individual basis. The property will have to be well maintained and in a satisfactory condition. A suitable demand and market for the property will be essential and this must be recommended and confirmed by the valuer. A suitable new build warranty is also required.

    If you have a property that is a non-standard construction please contact us in the first instance.

    Fire Risk Assessments (FRA) and Cladding

    Current advice states that a building over 6 floors/18m should have an annual Fire Fisk Assessment. We expect this to include assessment of cladding (if present) and whether a flammability test is required.For new build properties that are incomplete at the time of inspection, issues of fire safety should be covered by the processes governing new build construction, warranty and insurance by the time the property becomes habitable for the first time.

    For all other properties, our Valuers will ask if there is a current Fire Risk Assessment (within the last 12 months) If:

    • A FRA is available and there are no works required that are likely to have a material effect on value, the property will be deemed acceptable and a value given
    • There is no FRA available/Not known (or not within the last 12 months) a value will not be returned and the property will be deemed not suitable for mortgage lending until a valid FRA is produced.

    Modern Methods of Construction (MMC)

    We will consider each form of construction individually on its merits. Each property will require a physical inspection and valuation by one of the Bank’s Valuers who will advise on the condition, marketability and saleability of the property.

    As a minimum, MMC properties will be required to have the necessary unqualified NHBC guarantees or similar and have BPS 2020 & BPS 2021 certification for materials used. The property should be situated in a location where marketability would not be an issue and they would also need to be acceptable to insurers.

    If you have a property that is a MMC, please contact us in the first instance.

    Timber Framed Construction

    Modern factory produced timber-framed construction, generally constructed by the major house builders since the 1960s are acceptable if constructed with an outer skin of brick/stone or rendered blockwork, subject to individual inspection and the Valuer being satisfied with construction methods, site supervision and storage facilities on new properties and developments.

    Lightweight thin claddings such as rendered boarding, timber, e.g. shiplap or similar equivalent material are generally not acceptable unless decorative and a relatively small proportion of the wall surface.

    A small proportion of modern timber framed dwellings have been constructed with a cement render finish on expanded metal mesh or similar applied direct to the timber frame. If the property has NHBC approval and TRADA certification, we will consider this property as acceptable subject to Valuer comments.

    "Lightweight" Softwood Timber Framed are not acceptable. An example would be "between the wars" timber "garden shed" construction, often built with walls of asbestos sheet cladding and roofs of asbestos tiles or of felt.

    Medieval and/or Historic Timber Frames Houses are acceptable, subject to individual inspection and saleability, and are of hardwood timber framed construction with infill material.

    Escalating Ground Rent

    We will consider properties where the Lease contains a provision for a periodic increase of the ground rent provided that the amount remains reasonable throughout the term of the lease; any increase must be linked to the equivalent percentage change in the Retail Price Index (RPI) or a similar index.

    If subject to a multiplier, any multipliers which cause a doubling of rent every period of 15 years or less are not permitted.

    If you are unsure if the terms of the lease are unreasonable please refer the details to us.


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