Minimum Property Standards

We want to help landlords provide quality homes to their tenants. This means we will only lend on properties that meet certain minimum standards.

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Property concentration exposure limits

The Mortgage Works will consider its overall exposure by applicant, geographical area and development when assessing applications. These exposure limits are per applicant and the number of units include securities mortgaged to other lenders and/ or unencumbered properties. The maximum concentration that can be considered per development is:

Minimum property value/purchase price

£50,000 (apart from HMO which will need a minimum property value of £100,000).

Scheme abuse

The Mortgage Works customers aren’t allowed to live in the Buy to Let property at any time and will be in breach of the terms and conditions of the mortgage contract should they choose to do so. Where this is the case, The Mortgage Works's policy is to give the customer a period of time in which to vacate the property, or instead remortgage to a residential loan. If a customer fails to comply with these terms, this may lead to legal action being taken against them, which could ultimately result in The Mortgage Works taking possession of the property.

Valuation criteria

• Leasehold properties must have a minimum lease of 70 years at application.
• The valuer must be satisfied that there is a market for any property taking the lease term into consideration.
• Although an application may meet the guidelines above, the property may still be declined by the valuer, e.g. a mortgage application in England for a 20 year term with a 71 year unexpired lease is within policy, but the valuer may advise the property is not readily marketable and saleable and we will therefore not consider the property as suitable security.

Construction types

Traditional Construction

The following are regarded as traditional construction and normal lending terms apply:

Walls

• Cavity outer walls of brick/reconstituted stone/block (including rendered walls) with inner walls of brick or block.
• Timber framed property with outer walls of brick/reconstituted stone/block (including rendered walls), built 1970 or after.
• Solid stone (eg limestone, granite).
• Cob - or any regional variant (for example cobb, clom and Wychert).

Roof

• Tile (concrete)
• Slate
• Thatch (reed or straw)
• Felt, asphalt
• Copper, lead

Spray Foam Insulation

If spray foam insulation has been fitted in the wall voids of the property, then the valuer will decline the property.

Where spray foam has been installed in the rafters, frame, and/or underfloor structure, the property will initially be declined by the valuer, but can be reconsidered with evidence of either:

Confirmation the installation of the foam is in accordance with the manufacturer’s recommendations, and

• The full pre-survey suitability report including details of the materials/isolating card
• The condensation risk assessment
• Evidence of BBA certification
• The warranty/guarantee provided of the installation and insulation. This warranty must be transferable upon sale of the property to the new owners.

Or

A Chartered Building Survey (FRICS or MRICS qualified) should be instructed to undertake an invasive inspection. They'll need to report on the frame integrity. Where it requires remediation or foam removal work, you will need to include an estimated cost.

Non Traditional Construction

Many properties have been built using a variety of other construction methods. Lending terms vary depending on construction types and if a repair scheme, where appropriate, has been used. Where a property is of non traditional construction please contact your usual Service Centre with the following details for further advice:

• The name of the type of construction
• Year built (if known)
• Flat/terrace/semi or detached
• Details of any repair scheme if appropriate and if the scheme applies to the whole block (e.g. the whole terrace/both semi's)

The exact construction name is important as lending terms may differ between different types and year built. For example, our lending terms differ between Gregory, Gregory Drury System 3 and Gregory Housing. All three have different lending terms and it is important to ensure you give us the full and accurate name to avoid us giving inappropriate advice.

Modern Methods of Construction

We're supportive of development schemes which incorporate Modern Methods of Construction (MMC), although an MMC scheme must display sufficient robustness, technical rigour and suitability for its location. Due to the wide and constantly changing range of products in the market, each development (not system) is treated independently. Please provide the information below to enable us to consider your development fully:

• Principal construction materials - e.g. steel frame, timber frame, CLT (Cross Laminated Timber)
• Details of the roof and wall finishes - please also provide confirmation/evidence of their British Board of Agrément (BBA) or similar accreditation, which should be for a minimum 30 year lifespan (to include fixings)
• Warranty details - this should be a mainstream warranty accepted by The Mortgage Works (preferably “NHBC Accepts”). We also require confirmation as to whether the system has Buildoffsite Property Assurance Scheme (BOPAS) accreditation
• Any available site specific information regarding the development.

Purpose built flats, converted flats and studio flats

The internal floor area must be no less than 30 square metres. Studio Flats must contain a separate bathroom.

Where the property is a Studio Flat, enter '1' for number of bedrooms.

Property developers

• Property developers (for example, a person who owns 25% or more of a business whose principal activity is property development) are not accepted.
• Applications for properties that have been built or converted by an applicant who isn’t a property developer can be accepted, providing the property is fully complete and will be let on completion.
• Where properties within your client's portfolio are undergoing development, a review will be undertaken to determine if the applicant is considered to be a property developer.

Local Authority flats

We won’t accept former local authority flats in blocks of more than five storeys. This also applies to maisonettes and Scottish tenements in blocks of more than five storeys that were, or still are, in local authority ownership.

Lease terms

• The acceptable minimum lease term is 70 years. If the lease term is less than this, you must confirm at application that the lease will be extended on or before completion. In this scenario, a ‘Decline’ decision will automatically be produced – we'll then send you a Decline Appeal form which must be completed and submitted together with a letter from the solicitor confirming the following;
• Confirmation the applicant(s) owns, or is intending to purchase the Freehold Title, OR
• If the applicant (or the seller as part of a purchase) is extending the remaining lease term, please provide a letter from the solicitor on letter headed paper confirming:
• Length of lease (years)
• Date of commencement of lease
• Ground rent (£ amount)
• Ground rent review frequency
• Ground rent increase methodology (e.g. RPI linked) 

We'll only allow lease extensions on new and existing lending when completed under the Leasehold Reform Act.

The valuer must be satisfied there is a market for any property, taking the lease terms into consideration.

• Please note that there are different limits for acceptable New Build lease terms – see New Build property lease terms above for details

• Where the valuer believes marketability will be impacted by the lease terms, they may reflect this in their valuation, e.g.
• Where ground rent escalation is linked to the value of the property or an index greater than The Retail Price Index (RPI)
• Where lease clauses appear onerous, e.g. disproportionate service charges or event clauses for normal use, such as installing an aerial

• Some lease terms will impact marketability so severely they will always result in the property being declined, e.g
• Where ground rent is greater than or equal to 0.5% of the property value, or where the review period is less than or equal to 5 years.
• Where ground rent doubles in less than 20 years (e.g every 5, 10 or 15 years) or escalates by compounded RPI

These examples aren’t exhaustive, and the solicitor is expected to refer back to us any lease terms they feel may affect the value or future saleability of the security.

Estate Charges

• Estate Rent Charges, or Estate Management Charges, can apply to freehold or leasehold properties.
• Charges must be reasonable at all times. Where charges are greater than £500 per annum, we’ll need to be advised what the charges cover so the valuer can assess whether the valuation is affected.

Japanese Knotweed

Properties with Japanese Knotweed growing within the vicinity are considered with caution and subject to the following terms:

If Japanese Knotweed:

• is actually causing visible material damage to a structure, OR
• is not actually causing visible material damage but is still likely to prevent use of or access to amenity space, OR
• is visible on adjoining land, but is evidently unmanaged and has the potential to significantly impact the subject property/grounds

Then the applicant will be required to obtain a specialist report in respect of eradicating the plant, including an insurance backed 5 year warranty against re-appearance of the plant, and if necessary, repairs to the property and services will be required for the valuer to make a full assessment of the property's suitability.

However, if Japanese Knotweed:

• isn't actually causing visible material damage to a structure and isn't likely to prevent use of or restrict access to amenity space, OR
• is visible on adjoining land but is managed with no potential to significantly impact the subject property/grounds.

Written confirmation is required from the applicant confirming that they're aware of the presence of this invasive plant and the adverse affects it could have on the property should it spread closer. It is recommended the applicant seeks their own independent professional advice regarding the risk this plant might impose.

Building insurance

The Mortgage Works is legally obliged to ensure that adequate insurance is obtained by your client for the property to be mortgaged. Full details may be required in the form of a policy schedule with the interest of The Mortgage Works (UK) plc noted as mortgagee. Switching mortgage products won't affect your client's house insurance.

Post Valuation queries reports

Valuers may request specialist reports within their valuation which are:

• designed to highlight defects
• and/or to assist them in obtaining additional information upon which to base their valuation.

The valuer will advise which reports they need. A surveyor will then need to complete all the requested reports. Once completed, you'll need to upload them to the case, so we can refer them back to the valuer for their consideration. We'll only accept reports from qualified firms and professions and they must show a proper detailed inspection has been made. The initial report might certify that the property is not a suitable security. If this happens we may consider it following an independent review by a specialist.

The following are examples of specialist reports that we might request:

Fire safety assessment

The valuer will decline the property if it has:

• cladding with external wall systems and any attachment (e.g. balconies)
• non-cladding related fire safety concerns with external wall systems and any attachment (e.g. balconies)
• or any other significant fire safety concerns in a multi-storey, multi-occupancy buildings.

Why do we ask for more information before mortgage offer?

It’s important that you highlight and address with your client any fire safety issues with the property as soon as possible.

This means if we’re able to give them a mortgage offer, they can be more confident these issues won’t arise later in their mortgage journey. For example when they’re close to completion.

What happens next?

Governments of each jurisdiction have introduced different legislation and requirements to address fire safety concerns.

We’ll need some more information to decide if the property is suitable. Our requirements will depend on:

• the location (jurisdiction) of the property, (i.e. England, Wales or Scotland)
• the height of the building
• whether the property’s fire safety issues are going to be remediated and/or mitigated. Or, for example, whether they're being refuted by the Principal Accountable Person (the person responsible for repairing and reporting on common parts of the building).

Our requirements for cases affected by fire safety issues

We'll contact you if a Valuer has declined a property due to fire safety concerns that need to be investigated. We’ll know the jurisdiction and height of the building. However, you’ll need to know whether the property’s fire safety issues are going to be remediated and/or mitigated. For example, whether the building is being remediated under the Developer Pledge. 

So we can review the property further, once you have identified the relevant remediation/mitigation route for the building, please use the guidance below, so you know what information to send us.

If a free legal fee product is selected and the valuer raises concerns about fire safety on a property, we can't proceed on a free legal fee basis. We'll contact you to let you know. A new product must be selected using solicitors from our panel.

Our guidance