15. Other Factors Affecting The Lending Decision Flashcards
1
Q
What is permitted development?
A
Changes to a property that can be made without planning consent
2
Q
Where is permitted development usually not allowed? (3)
A
- conservation areas
- areas of natural beauty
- heritage sites
3
Q
What is the maximum amount of land surrounding the property that permitted developments can take up?
A
50%
4
Q
What are the height and depth limits for permitted developments? (4)
A
- front or side not closer to a highway than before
- not higher than the highest part of existing roof
- two storey extensions must be 7m away from rear boundary
- two storey extension depth must be less than 3m from the rear wall of original house
5
Q
What considerations are there for building materials used in permitted developments?
A
must match the existing building
6
Q
When is converting a garage internally allowed as permitted development?
A
When it does not add to the size of the building
7
Q
What are the maximum loft extensions for permitted development? (2)
A
Detached houses - 50m3
All other houses - 40m3
8
Q
Are putting up aerials and satellites permitted development?
A
yes
9
Q
What is the maximum a single storey extension can extend from the original wall? (2) What other caveat is there for whether single storey extension is allowed?
A
detached houses - 8m
all other - 6m
must get approval from the neighbourhood consultation scheme (local council). They will consult neighbour regarding if there are any issues raised before coming to a decision
10
Q
What is meant by the term ‘the original house’?
A
Either when it was built
or
as it stood on 1 July 1948 (if built prior to this)
11
Q
Under what circumstances is planning permission needed (6)
A
- anything outside of permitted development
- listed properties/those in conservation areas
- New builds
- converting use of existing buildings (barn conversions)
- dividing existing properties (creating 2 homes out of 1)
- Anything that contravenes the original planning consent
12
Q
Can a new owner of a property have consequences for a previous owner not adhering to planning consent?
A
Yes, can be forced to re-instate to original condition
13
Q
What is a pre-application?
A
Cheaper, less detailed plan submitted to a local authority to seek planning permission initially
14
Q
What are the two main aims of building regs?
A
- ensure health and safety
- energy conservation
15
Q
What are the two things that building regs aim to control?
A
- property structure
- materials used
16
Q
True or false, if you don’t need planning consent, you don’t need to adhere to building regs?
A
False, always need to comply with building regs, even if planning consent is not needed
17
Q
Who is responsible for enforcing building regs?
A
local authority
18
Q
Who is allowed to carry out building regs inspections? (2)
A
- local authority
- approved inspector
19
Q
What are the 3 main exemptions that are not required to comply with building regs? When might the exemptions not apply?
A
- Carports
- open on 2 sides
- less than 30m2 floor - detached garage
- at least 1m away from property boundary
- less than 30m2 floor - Garden or boundary walls
may not be exempt with listed buildings
20
Q
What is the main way in which building regs assesses for energy efficiency?
A
Air leakage inspections must be carried out on a sample of new homes within developments
21
Q
What is a listed building?
A
One of historic or architectural importance
22
Q
What are the three categories of listed buildings? What qualifies a building for each one?
A
Grade I - Exceptional interest
Grade II* - Particular importance
Grade II - Special interest
23
Q
Which is the most common type of listed building?
A
Grade 2, make up 92% of all listed buildings
24
Q
Who has ultimate responsibility for enforcing rules on listed buildings?
A
Government minister
25
Who should applications be made to for making changes to a listed building?
Local authority
26
Who might the local authority consult to make their decision to allow changes to listed buildings? (4) what grade listings is this relevant to?
Grade I & Grade II*
1. English Heritage
2. CADW - Wales
3. Historic Environment Scotland
4, Northern Ireland Environment agency
27
Who controls building in conservation areas? (3)
1. Local authories
2. bodies like English heritage and CADW
3. Govt secretary of state for communities and local government
28
What do owners need to ask permission for with regards to conservation areas
changes, demolishing and trees
29
What is a tree preservation order?
trees cant be cut or pruned without LA consent
30
What are the main dangers of radon gas? (3)
1. radioactive
2. carinogenic
3. goes through cracks and cavities
31
What are the main solutions to radon gas? (3)
1. Install fans and pipes to blow out the gas
2. radon barrier in the floor
3. material and cavity trays
32
What is contaminated land?
Land previously used for industrial purposes
33
What consideration needs to be made regarding overhead electrical power lines?
Some think this causes cancer
no proof but enough to put people off and make some lenders reluctant
34
How might road widening and infrastructural development affect a property? (2)
1. property or garden can be subject to compulsory purchase by the government
2. some properties might not be close enough for compulsory purchase but value might decrease due to close proximity with road/rail
35
When making a compulsory purchase, how much does govt pay for the property?
Will pay market value, but this can still be a loss/result in negative equity for homeowner due to market slumps
36
Who is responsible for subsidence due to mining works?
Mine owners, they must pay compensation or pay for repairs
37
What are the feed in tariff and smart export guarantee?
Owners paid for excess energy put back into grid from their solar panels
38
What are the disadvantages of installing solar panels as part of the smart export guarantee? (5)
1. intrusive
2. affects kerb appeal
3. solar panels put strain on the roof - needs to be regularly checked
4. maintenance of panels is owner's responsibility
5. takes 9-10 years for owner to get their money back for installation costs
39
What is the rent a roof scheme?
Roof is leased to a company for 20-25 years so they can put solar panels on it. The company pays for the installation and the owner is given an energy discount
40
Why has the rent a roof scheme become less popular in recent years? (2)
1. lower govt tariffs
2. cheaper costs of buying own panels
41
What are the possible issues that can be had with rent a roof schemes? (5)
1. lease stays with property - hard to sell
2. owner would need permission from company to make alterations affecting panels
3. if owner needs to repair roof, they may need to compensate company for removing panels
4. Lenders will require more searches before they will lend
5. Some lenders may not lend at all
42
Why are lenders reluctant to lend on agricultural property? (2)
1.Hard to evict people from it
2. restrictions on the usage of land
43
What is a supervision order (Agricultural property)
When there is evidence of poor management of the land, supervision order takes the land out of the person's control
44
What are 3 ways in which lenders can increase their security?
1. Let max LTVs
2. Guarantees
3. Higher lending charges
45
When will a higher lending charge be payable?
If LTV exceeds a certain level set by lender
46
How is the Higher lending charge paid?
A single payment equal to a percentage of the loan
can be added to the loan
47
Why do lenders charge higher lending charges?
To offset higher risk
48
What do some lenders use HLC to do?
Purchase a Mortgage Indemnity Guarantee (MIG)
49
What is a mortgage indemnity guarantee?
Insurance policy that protects the lender if a borrower defaults & forced sale doesn't make enough to cover the outstanding mtg
50
How much excess are lenders usually responsible for claiming when making claims on mortgage indemnity guarantees?
first 20%
51
Who is the contract between for mortgage indemnity guarantees?
Lender and insurer
52
Are HLCs refundable?
no
53
What is subrogation? What is an example?
Insurer can sue a third party for doing something which makes them have to pay out to the insures.
Insurer can sue borrower for defaulting and having to make them pay out mortgage indemnity guarantee to lender.
54
Can lenders go after the borrower for the excess they have to pay before they can receive MIG? if so, how long do they have to do this?
Yes - they have 6 years from property being sold to do so
55
What is a product fee?
Fee charged by lender for discounted products
can be fixed or percentage
56
What is a lenders reference fee?
charge for your existing lender to give a reference to your new lender if you remortgage (usually around £50)
57
What are lenders able to take into account when charging mortgage exit fees? (4)
1. deed release fee
2. land registry charges
3. staff processing fees
4. reasonable proportion of general overhead
58
If borrower feels their exit fee is unfair, who should they contact?
Financial ombudsman
59
Where do solicitors search for obligations and restrictions?
Local land charges registry
60
When do solicitors conduct their searches? are they refundable?
pre-exchange of contracts
non refundable
61
When do sols need land registration fees? are they refundable?
Post completion, refundable only if completion doesn't go ahead
62
What are the amounts of land registration fees? how does this differ if postal or online?
Properties under £80k = £40
properties up to £1 million = £910
remortgages = £40-250
online = 50% less
63
What are indemnity fees? when are they arranged? how much are they?
protects the borrower or lender against a faulty title or when there is no evidence of planning permission
Before completion
usually 0.1% of value
64
Where does stamp duty land tax apply?
England and NI
65
true or false, non uk residents have to pay a SDLT surcharge on uk property?
True
66
What are non natural persons? how is SDLT charged for this group?
Companies
pay higher rate SDLT if purchase price is more than £500k
67
How is SDLT paid? within what timeframe?
Buyer's solicitor has to pay within 14 days of completion
68
When someone buys a leasehold property, which two payments do they have to make and to whom?
1. Premium - paid to leaseholder
2. Ground rent - paid to free holder
69
What SDLT is due on
1. EXISTING leasehold properties
2. NEW leasehold properties
1. SDLT payable on PREMIUM ONLY
2. SDLT payable on premium, plus any ground rent which is MORE THAN A NOMINAL CHARGE
70
Is the first time buyer exemption available for leasehold properties?
yes
71
What SDLT rates are payable by first time buyers? (3)
1. Under £300k = fully exempt
2. £300-500k = first £300k is exempt, pay SDLT on rest
3. over £500k = no exemption at all
72
What is the eligibility criteria for the first time buyer SDLT exemption? (2)
1. Not ever owned a major interest (be a beneficiary of) a RESI property ANYWHERE IN THE WORLD
2. Has to be used as MAIN RESIDENCE
3. Has to be a SINGLE DWELLING
73
If a couple is buying a house and the man is a first time buyer but the woman is not, will the first time buyer exemption apply?
No, both have to be FTB
74
How is SDLT paid on shared ownership properties? (2) Is FTB exemption applicable?
1. pay based on market value
2. pay based on share price & then if you ever acquire 80% of share, you must pay SDLT again for all shares bought since
FTB exemption only available first time, so not when later shares are paid
75
When is an SDLT surcharged due on BTL properties? What is the rate of the surcharge?
1. charged on SECOND property with purchase price of £40,000+
2. IF at least one of the shareholder's interest in the property is also £40,000+
(property costing £75k with 50% joint owners wouldn't pay the surcharge)
Rate = 3% of full purchase price, including the nil rate band
76
When might someone who would otherwise be required to pay BTL second home SDLT surcharge not be required to do so on a leasehold property?
If SOMEONE ELSE OWNS THE LEASE and it HAS 21+ YEARS UNEXPIRED
77
Married couples are 'one unit' for SLDT purposes - what does this mean?
They are considered as one, so even if he buys a house in his sole name and she buys a house in her sole name, because they are one, this counts as the wife already owning a home and she will need to pay SDLT on the second of the two purchases
78
What happens if you sell your main residence between the SDLT is due on new property? (ie within 14 days)
No SDLT due
79
What happens if you buy a new house as your main residence before you are able to sell your old house, is SDLT due?
No, so long as you sell it within 36 months
Usually it is paid and you get a refund when you see the house
80
What happens if you sell your main residence, keep your BTL property, then buy a new main home, is SDLT due?
No, so long as you buy new residence within 36 months
81
What SDLT would be due for a parent helping their child to get a mortgage by registering to be an owner?
Child would not be eligible for FTB exemption
Because parent has their own home, 3% is due on whole purchase price
82
What SDLT is due if couple own two individual properties and decide to move in together, keeping the extra property as an investment?
3% surcharge applies but can be claimed back if other property is sold within 36 months
83
What SDLT is due if in court divorce proceedings, one partnet is ordered to remain in former marital home and other must buy and new house whilst still remaining a joint owner of the marital home?
No SDLT due
84
What happens if a couple has a permanent desire to separate and one decides to move out and buy another home? is SDLT due?
no
85
What happens if a couple separates and one sells or transfers their share of the property to the other? is sdlt due?
No, so long as they were still married when the transfer occurred
86
How is SDLT calculated on multiple property purchases
Divide total purchase price by number of houses. Each house will be taxed and banded individually based on this average price
87
What is land transaction tax?
SDLT equivalent in Wales
88
Is there a surcharge on second properties in wales?
Yes, all properties over £40k
