All you need to know about property and valuations

• A first charge or standard security must be taken over the property. 

• A charge over part of the registered title is not acceptable. 

• Multiple Titles- Lending on the properties with multiple titles can be considered.

Acceptable property tenure:

• Absolute ownership (Scotland).

• Freehold (flying) – please see Freehold flats / Flying freehold properties.

• Leasehold.

• Sub-Leasehold.

Unacceptable property tenure:

• Commonhold.

Where the remaining leasehold term is less than 85 years, the value of the property will continue to reduce until the lease is extended. This may result in the valuation being less than the purchase price or estimated value. This could also result in the property being declined. 

In all instances, assessment will be made based on the valuer's comments. We require a minimum of 30 years to be remaining on the lease at the end of the mortgage term. However, some flexibility is allowed for properties in prime locations in central London, where the minimum lease left at the end of the mortgage should be 10 years. 

Each case is assessed on its own individual merits. The valuer will consider the current value of the property and review period. Where escalating ground rents have short review periods and/or are high in relation to the property value this may have an impact on the valuation and mortgageability. 

Solicitors have a duty of care to ensure that any leasehold agreement is not onerous for the customer.

NatWest will be advised by either the valuer or the Solicitor of any restrictions, often these will be detailed in a Section 106 agreement (Section 75 in Scotland). 

The restrictions we can consider are: 

• Retirement complexes where there is a restriction in the age of the owner or occupier, for example must be over age 50. 
• Properties where occupation is restricted to only part of the year, for example 10/11 months provided the customer is using the property as a holiday/2nd home.
• Right to Buy - properties may have a restriction in the title whereby the owner has to offer the property back to the local council if selling This restriction lasts for 10 years As NatWest are supportive of the Right to Buy scheme.
• Agricultural Restrictions:
  • Maximum Loan to Value (LTV) is 50%
  • There should be no evidence of agricultural or commercial activity. 
  • The applicant must be employed in an agricultural related job. However, their primary source of income must not be related to the mortgaged property.

The restrictions we can’t consider:

• An overage clause which may entitle the previous vendor to a share of the profit of a subsequent sale of part (or whole) of the property. 

• Restrictions determining who can buy the property, for example people on a housing waiting list, people who have lived in the area for a certain period, people of certain professions. 

• Restrictions on the selling price, e.g. the property must be sold for 20% under market value.

This is not a definitive list of unacceptable restrictions. 

Acceptable subject to: 

There being a satisfactory report from a structural engineer.  

Note: Not to be confused with the British Iron and Steel Federation house type which is not acceptable. 

Acceptable

Acceptable subject to:

There being no known structural issues and there is an established resale market.

Acceptable: 

Will be considered on their individual merits by the valuer.

Acceptable subject to:

The valuation report making mention whether the property is modernised and suitable treatments carried out where appropriate.

Note: Typically dating from 1300 to 1800 and build from wood, such as oak or elm with the sections between frames infilled with brick or wattle and daub.

Acceptable subject to:

The construction being no more than 4 storeys high (this assumed the block is not of Local Authority construction) or with integral commercial premises. 

A satisfactory engineer’s report is required.

Properties listed are unacceptable unless repaired under the PRC Home Ltd Scheme.

Unacceptable

Acceptable

Unacceptable

Acceptable subject to:

There being a satisfactory report from a structural engineer. 

Acceptable

Acceptable: 

Will be considered on their individual merits by the valuer.

For more information, please see BOPAS.

Acceptable

Acceptable subject to :

A report obtained from an experienced Chartered Surveyor.

The report must be less than 6 years old.

The report must be classified is as ‘A’. 

Unacceptable 

Acceptable subject to:

An acceptable structural warranty in place.

For more information, please see BOPAS.

Acceptable only where:

The walls have totally been rebuilt in traditional materials and where PRC Homes limited have issued a guarantee and where all houses in the structural block have been improved to the same standard. 

Flats are unacceptable.

Unacceptable whether designated as defective under the Housing Defects Act or not.

Unacceptable 

Acceptable subject to :

A satisfactory report by a structural engineer.

Acceptable.

This definition does not encompass houses or bungalows built in the 1930’s, 40’s or 50’s.

Unacceptable unless it is a well known type such as Colt or Guildway where the individual property will be considered on its own merits. 

Acceptable:

Note: Known as Modern Softwood timber framed houses and flats

Unacceptable 

Acceptable

Unacceptable. The common type BISF (British Iron and Steel Federation) is not acceptable whether reclad in more sympathetic material or not. Steel framed flats of lightweight steel construction are not acceptable even with traditional external appearance.

Acceptable 

Acceptable

Please see Cladding for full details.

Please see Cladding for full details.

Acceptable

Remortgage- We provide a free valuation on properties valued up to £10 million. 

Purchase- We provide a free valuation on properties where the lower of the purchase price or value is less than or equal to £3 million.

• The free valuation is applicable per property, rather than per application.

• We will complete our own checks to make sure a property meets our lending criteria. This may not be a physical inspection of the property. We may use an Automated Valuation Model (AVM) or complete a desktop valuation. This check is for the banks use only. The customer will not receive a copy of the valuation report. 

• We highly recommend that your customer considers carrying out their own checks to satisfy themselves of the property value and condition before completing on a purchase. 

You can find more information on mortgage valuations here. 

A valuation will always be obtained using a panel surveyor instructed by us (NatWest). 

Where a valuation fee is payable, the fees are:

• Up to £3 million                    £102

• £3 million - £10 million       £1380

This fee is based on the lower of the purchase price or estimated value of the property.

The payment will be taken from the card details supplied on the application form.  If for any reason, payment can't be processed from these details the customer or broker will have to call 0345 600 0205 and make the payment.

For any properties valued over £10 million, valuations are available upon request via Legal and General Surveying Services.

Where a valuation fee is applicable, we will provide customers with a full valuation fee refund if their applications are declined on the grounds of affordability or credit scoring or where we can't lend the full amount requested due to affordability issues (unless they have requested to instruct a valuation at their own risk i.e a purchase application where the property value is over £3 million).

For applications where the purchase price is above £3 million or the property value is over £10 million (remortgage applications), our processing team will contact you prior to the valuation instruction and we adhere to the following process:

Where the valuation fee is applicable, the customer is given the choice between whether the valuation is instructed on Day 2 at the customers own risk following receipt of application or wait until the case is fully agreed by an underwriter (Please note that if the customer does proceed and the valuation is instructed at customers own risk, they could lose the fee if the valuation is carried out but they withdraw.

Please consult our Service Levels page for current processing timescales.

Valuation challenges will now only be accepted where it meets one of the following criteria:

1)      Factual error on the valuation instruction e.g. number of bedrooms noted is incorrect. Please contact the BrokerLine to make us aware of any errors.

2)      The property is a New Build and there are relevant recent comparables on the same site, along with evidence of second hand properties and/or other new build properties on a separate development. For further guidance and to raise a valuation challenge, please see our L&G New Build Valuation Challenge Form.

We will only arrange a standard Valuation for Mortgages Purposes. 

Where the customer wants a more in-depth survey, they will need to arrange this themselves. 

Customers can use the RICS website to find a qualified surveyor. 

Alternatively, the customer can contact our partners Legal & General on 0345 200 2046 

Legal & General Website