Unit 4:15 Lenders Decisions (HARD)

Question 1

Extension Planning Guidelines

Answer 1

• Limited to less than 50% of available land area
• Must follow specific height and depth limits to keep original roof appearance
• Two-story extensions need to be at least 7m from the rear boundary
• Two-story rear extensions can’t stick out more than 3m from the existing wall

Question 2

Extension Construction Standards

Answer 2

• Utilize matching building materials to maintain architectural integrity
• Ensure garage conversions maintain proportional building aesthetics
• Restrict loft extensions to maximum 50m³ volume (detached) or 40m³ (other dwellings)
• Communication equipment (dishes, antennas) should be placed discreetly

Question 3

Regulatory Compliance

Answer 3

• Extensions exceeding permitted development requires local authority consent
• Building regulations approval mandatory for structural modifications
• Planning permission necessary for extensions beyond specified parameters
• Consult local planning authority regarding permitted development rights

Question 4

What Needs Planning Permission

Answer 4

• Work outside the permitted development scope
• Anything that defies the original planning consents
• Splitting one property into many
• Converting existing buildings like barns

Question 5

Additional Planning Requirements

Answer 5

• Playing with a listed property or one in a conservation area
• Crafting a brand-new property
• Lenders will likely want proof of planning consent
• Or confirmation it wasn’t needed before they open money taps

Question 6

Planning Permission Process

Answer 6

• Contact local authority planning department with proposal
• Submit outline plan or pre-application to save costs
• Application enters public inspection register with neighbour notifications
• Planning committee adjudicates application

Question 7

Pre-Application Benefits

Answer 7

• Provides early indication of approval likelihood
• Often more cost-effective than full application submission
• Enables preliminary feedback before comprehensive planning
• Facilitates modifications prior to formal submission

Question 8

Listed Buildings Overview

Answer 8

• Architectural gems possessing historical or architectural significance
• All alterations require consent authority approval by relevant government minister
• Preservation costs can be substantial
• Previous modifications must have been properly authorised
  1. Grade I: Most exceptional (2.5% of listed buildings)
  2. Grade II*: Particularly important (5.5% of listed buildings)
  3. Grade II: Special interest dwellings (92% of listings)

Question 9

Environmental Factors

Answer 9

• Radon Gas [invisible radioactive gas seeping through cracks]
• Land Legacy [industrial aftermath leaving soil contaminants]
• Overhead Lines [electromagnetic concerns from power infrastructure]
• Road Developments [access and noise implications from transport projects]
• HS2 Project [major railway infrastructure affecting nearby properties]

Question 10

Environmental Risks 2

Answer 10

• Riverside Risks [flood plains, bustling roads, mobile phone masts, and substations]
• Past Subsidence [can make a property uninsurable, a red flag for mortgages]
• Clay Chronicles [London clay notorious for slippage and subsidence]
• Mining Mysteries [subsidence caused by historic mining works]
• Rent-a-Roof [company owns roof, solar panel leases that remain even when property changes hands]

Question 11

Loan To Value Calculation

Answer 11

(Mortgage Amount ÷ Property Value) × 100 = LTV%

Question 12

Mortgage Indemnity Guarantee

Answer 12

• Also known as Higher Lending Charge [fee for borrowing at high LTV ratios]
• Insurance policy [protects lender against loss if borrower defaults]
• Required for high LTV loans [typically above 75-80% LTV]
• Does not protect borrower [lender can still pursue borrower for losses after repossession]
• The relationship is between lender and insurer

Question 13

Subrogation

Answer 13

• Insurer’s right to chase responsible party for insurance loss [legal right to pursue compensation]
• Similar principle applies in mortgage context [lender can pursue third parties]
• Allows recovery of costs after claim pay-out [recouping money from responsible parties]

Question 14

Exit Fees

Answer 14

• Charges applied when mortgage is fully repaid [regulated by MCOB and FCA]
• Can include releasing deeds, Land Registry fees, staff costs, and administrative overheads

Question 15

Stamp Duty Land Tax (SDLT)

Answer 15

• First-time buyers: exempt up to £425,000 [no tax on properties below this value]
• Properties £425,000-£625,000: exempt on first £425,000 [standard rates apply only above threshold]
• 3% surcharge: applies to buy-to-let or second homes over £40,000 [additional to standard rates]
• Major interest threshold: owning property worth over £40,000 globally [each buyer’s share counts]

Question 16

SDLT Special Situations

Answer 16

• Main residence replacement: no extra SDLT if selling current main home within 36 months of buying new one
• Buy-to-let retention: no extra SDLT when keeping investment property if selling main home and buying new main residence within 36 months
• Joint purchase anomaly: two buyers (including first-time buyer) still pay if if one already owns property
• Temporary ownership overlap permitted [grace period for transition between properties]
• Divorce partner forced to leave get SDLT grace