Property specifics BTL criteria

Back to back sub sales
Where the transaction is a purchase, the property must have been owned for a minimum of six months by the vendor conveying the property to the applicant.

Flats/Maisonettes
Must be self-contained with private facilities and have direct access to the highway via covered common parts.

Unacceptable Property Types
The following flats are unacceptable property types:

Properties with planning/occupancy restrictions
Property owned for less than 12 months by the seller
Properties with restrictions in place that would affect future resale valuer and whether the property is desirable in a rental market.
Properties with more than two kitchens
Properties with more than four bedrooms
Properties with no internal bathroom, kitchen or W.C.
Social Housing Shared Ownership/Right to Buy
Properties with an internal area of less than 35m2
HMO's (Houses of Multiple Occupancy)
Freehold flats and maisonettes
Properties with locks to internal doors
MOD flats
Two storey properties where one storey comprises a commercial unit
Property liable to be subject to clearance or compulsory purchase order
Properties (flats) where the landlord is resident in one of the units (Resident landlord)
Live/work units
Properties with cross leases, e.g. Tyneside flats
Isolated rural properties with restricted access and services
Residential property divided into bed sitting rooms and with no communal areas
Studio flats
Sheltered accommodation
Timeshare accommodation
Holiday homes
Dwellings of totally timber construction i.e. not clad with brick, stone etc., including log cabin/chalet construction types
Partially built property
Any property comprising more than one dwelling unit (including properties with granny flats/annexes and properties with a self-contained basement)
Properties with the benefit of land with planning permission.

This list is not exhaustive and all property must be supported by the comments of the valuer. 

Tenure

Acceptable Tenure: Freehold and leasehold in England and Wales (freehold flats are not acceptable) 
Acceptable Tenure in Scotland:  Absolute and Outright Ownership  (houses and flats)

Leasehold and ground rent

There should be at least 85 years unexpired lease remaining at the start of the mortgage application.
There cannot be a provision that the lease is forfeit if the lessee becomes bankrupt.
Any new leases from 30th  June 2022 must not charge more than a nominal amount for ground rent, such as £1 annually - this includes voluntarily extended leases.
Maximum initial ground rent to be no higher than £1,000 per annum
Ground rent reviews to be a minimum of 21 years from commencement of the lease, and at no more frequent intervals thereafter
Increases in ground rent, at review, must be limited to no more than the higher of:
- a doubling of the rent payable immediately prior to the review or,
- a figure increased in accordance with the percentage change in RPI/CPI over the previous review period

Freehold - Estate rent-charge/freehold service charge

Maximum initial estate rent-charge/service charge be no higher than £500 per annum in present value and must be no more than double every 25 years.

Property above or below commercial

These properties must meet the following:

Have at least 3 storeys in the block of flats (to include commercial premises) - our property can be on any floor
The valuer must confirm there is consistent and reliable demand for the property and the commercial element is acceptable.
Any flats that exceed 4 storeys must have adequate lift arrangements.

Energy performance certificate

In order for a property to be deemed as acceptable security, it must have a minimum Energy Performance Rating of E, unless the property has a valid exemption.

A valuation report will only be returned if the property has a valid EPC with a rating of A – E. If the valuation has an EPC below E and does not have a valid exemption, the property is deemed unsuitable for our security and the application will be declined. To find whether a property in England or Wales has a valid exemption, the property can be checked on the GOV.UK PRS exemptions register.
 

Solar panels

Solar panels are acceptable subject to a satisfactory valuation being returned.  Please note some restrictions may apply to solar panels that were previously installed free of charge and have certain lease restrictions, please contact our support team or your business development manager for queries of this nature.

Cladding

Where the valuer has requested an EWS1 form due to the cladding being present on the property the following guidance will apply. 

A completed EWS1 form will be required from a member of a relevant professional body, along with a covering letter on headed paper which will confirm they are suitably qualified. This will then be assessed by our underwriters.  

If an EWS1 form is not available for a new build property a letter from the developer can now be accepted. This is subject to the letter being on a headed letter with the developer’s company details clearly present. The letter must confirm that the property is being built in accordance with the Building (Amendment) Regulations SI 2018/1230 and/or, that there are no materials included in the building of the flats that would cause an EWS1 form to be unsuitable. 

Japanese knotweed

If Japanese knotweed is present at the property, the valuer must confirm what category/stage the knotweed is at and the following rules must be applied;

Category A and B – The property may be considered as acceptable for mortgage purposes, subject to an inspection by a suitably qualified remediation specialist and commitment shown to the commencement of any recommended works under an insurance backed Japanese Knotweed Management Plan
Category C and D – Acceptable to lend

If the valuer identifies a heavy stand of Japanese knotweed on neighbouring land (eg very close to the boundary) that may present a threat, the subject property should be declined.  

Minimum property value

The minimum property valuation is £75,000 (in current condition). The property must be suitable for immediate letting at the time of valuation.

The minimum property valuation for new build properties is £100,000.

Reports and retentions

Where a valuer requests specialist reports, such reports will be referred to the valuer for analysis and comment prior to any offer being issued. No funds will be released until the property has been confirmed as suitable for lending.

Accord BTL will not hold any retentions for works to be completed. The property must be suitable for immediate letting at the time of the valuers inspection.

Exposure limits

Maximum exposure to any block of flats or development is limited to 25%.
A maximum of 1 flat/unit will be acceptable as security in all buildings made up of 4 or less flats/units. The 25% exposure limit will also continue to apply for blocks greater than 4.
 

Buildings insurance

Suitable buildings insurance must be in place at completion (remortgage) or at exchange (purchase). The insurer must be aware that the property is to be let. Our interest must be noted in the policy.

Inter-family purchase

At the time of application the customer must have owned the property for a minimum of 6 months. There is no minimum period of ownership when a property has been inherited.  

Inherited properties

There is no minimum period of ownership when a property has been inherited.

Overriding interest

We will not consider applications where:

The property is being sold by a family member at a discounted price.
A previous owner retains an interest in the security.
Any tenant retains or may acquire an overriding interest in the property.

Flying freehold

Flying Freehold is only acceptable where it is 15%  or less of the whole property footprint. 

Steel framed properties

An Intrusive Structural Report (in accordance with BRE113) must be obtained on all pre-1980 Steel. 

Mundic

Mundic Properties are of concrete block construction, often found in Cornwall and Devon. Concrete deteriorates and in the worst cases the property may need to be demolished.

If a test is required by the valuer this must be obtained before mortgage offer. We consider the gradings as follows:
A - Acceptable
A/B - Should be referred to the valuer to check it doesn’t affect his valuation
B and below - Not acceptable 