Valuation & Policy Guidance Notes

Transcription

1 Valuation & Guidance Notes In association with: Version: 2015 v4.0 Updated: 17 Dec 2015 Effective Date: 17 Dec 2015

2 Document Revision History Date: Version Revised Sections Effective 10/04/ Page 14 Section added to reflect minimum 14/04/2014 valuation of 50,000 for all lending segments 11/06/ Self-build section of the guidance notes 13/06/2014 (previously page 15) removed following change of Lending Removed references to Self-build from the sections on Barn Conversions on page 5 and New Build on page 14 10/10/ New Build (page 16), updated to: 10/10/2014 o Include The Q & CRL 10 Year Structural Defects Insurance as acceptable warranties. o Make an amendment to the - Retentions - section to remove the wording Retain All and reflect that a numeric value must be used. Re-instated the General Remarks section at page 11. Tenure section page 18: Wording change to replace Feudal / Feuhold with Former Feudal. 13/01/ _v1.0 New Build (page 16) updated to include 15/01/2015 Global Home Warranties 10 Year Structural Defects Insurance as an acceptable warranty On page 17, the Specialist Reports section now includes Chartered Building Surveyor (MRICS/FRICS) The Flats section on page 10 now provides guidance on Coach Houses The Society might be prepared to consider some properties where a section 106 agreement is in place. Rather than setting out a list of acceptable restrictions, the guidance notes have been updated on pages 18 and 20 to re-enforce current practice that if the valuer is aware of the restriction this must be reflected in the valuation report. 01/05/ v2.0 Flats (page 10) now includes the wording 11/05/15 Properties based on the ground and first floors are considered acceptable as long as there is suitable re-saleability and demand. Added a new section Two Kitchens on page 19 with the wording Executive type houses with second kitchens are considered suitable as long as the property cannot be let as separate units. Utility rooms are not considered as a second kitchen. 2

3 01/09/ v3.0 Japanese Knotweed (pg 14) now includes the wording: Where Further Investigation is required, this is to be provided in the form of a report undertaken by a Japanese Knotweed specialist who is employed by a Property Care Association (PCA) registered firm. 27/11/ v3.0 Lease length in RICS guidance changed to The unexpired lease remaining at the start of mortgage must be 85 years, JK, amended wording re specialist. 27/11/15 17/12/ V4 Added requirement to recommend lease extension for below 85 years and provide an after value. Amended commercial property to unacceptable other than Home office, private paddock or similar. 17/12/15 3

4 Contents Subject Page Introduction 5 Standard & Non-Standard Construction Construction Overview 6 and Guidance Notes Barn Conversions 7 Buildings Insurance 7 Buy To Let 7 Concrete Properties 9 Commercial and Mixed Use 10 Declined Properties 10 Flats 11 Flooding 12 General Remarks 12 Green Deal 12 Holiday Lettings 12 HS2 13 Innovative Construction 13 Japanese Knotweed 14 Land 15 Local Authority Properties 15 Masonry Walls 15 Minimum Value 16 Mundic Block 16 New Build 16 Retentions 17 Roofs 17 Solar Panels 18 Specialist reports 18 Tenure 19 Timber Frame 20 Two Kitchens 20 Unacceptable Properties 20 Valuation 22 4

5 Introduction These guidance notes are intended for panel valuers. The Society s panel valuers are the Society s representatives and are expected to be polite and courteous and to act in a manner that will be seen as professional and competent. The Society requires appointments to inspect to be made within two days of receiving instructions and the report received within five working days, including day of instruction. Difficulties in gaining access must be reported to the Society s Panel Manager. Valuers must not visit without appointments and must carry suitable identification. Valuers must advise the Panel Manager of any conflict of interest, e.g. when the selling agents are a related company. Valuers must be MRICS, FRICS or AssocRICS members of the RICS and in addition must be approved under the Valuer Registration Scheme (VRS), to be able to complete residential valuations. Valuations must conform to the RICS Professional Standards (Red Book) and the RICS Guidance Note The valuation of individual new-build homes or any document that supersedes this. Valuers must retain their site inspection notes for a period of at least 15 years Although copies of the reports are given to applicants, valuers must not enter into any discussion with third parties. Any queries should be referred to the Society s Panel Manager. Properties must generally be of good quality, readily saleable and be used for domestic residential owner-occupation as the main residence of the applicants, unless the instruction is for a buy to let product. Properties must be situated in England, Wales, Northern Ireland, mainland Scotland or the Isle of Skye. 5

6 Standard and Non-Standard Construction CONSTRUCTION OVERVIEW Standard construction for residential properties is classed as: Main walls are of masonry i.e. brick, block or stone and cavity or solid walled with a minimum depth of 200mm. Main walls of modern timber frame with a masonry external skin will be classed as standard construction. Main walls of modern steel frame with a masonry external skin will be classed as standard construction if originally constructed with a NHBC guarantee. Main pitched roof covering is tiled or slated or a modern metal sheet roof (not a corrugated iron roof covering.) Main flat roof covering is felt, asphalt or GRP. Main roof structure is of timber cut or trussed or a steel framework. Non standard construction: If the property is of a non standard form of construction it will be considered on an individual basis. The property will have to be well maintained and in a satisfactory condition. A suitable demand and market for the property will be essential and this must be recommended and confirmed by the valuer. For Modern Methods of Construction, please refer to the relevant section. Cross wall construction having parallel structural sidewalls and lightweight front and rear panel walls. 6

7 and Guidance Notes BARN CONVERSIONS All necessary planning permissions and Building Regulation Consents must have been obtained. The property must be completely converted and have reached practical completion prior to any release of funds. All conversion works must have been supervised by a professional with appropriate PI or the property has a structural warranty upon completion. If no warranty or professional supervision then a structural engineers report must be obtained to ensure structurally sound. If the property was converted over ten years previously then a structural engineers report only required if no professional supervision or a previous warranty. BUILDINGS INSURANCE Building Insurance: The BCIS guide to house rebuilding costs must be used as the basis for calculating the reinstatement figure. The figure should include the costs of demolition, site clearance and professional fees and reflect the floor areas stated in the report. The figure should include basements, garages and any permanent outbuildings. BUY TO LET They are acceptable to the Society. However, the Valuation is subject to Special Assumptions. Terms of Engagement: the guidance notes and the Buy to Let report format are deemed to constitute these. Completion of the Buy to Let report in accordance with guidance and report format is deemed as confirmation/acceptance of these. The Lender s Special Assumptions: Market Rent: is the gross rental income based on 100% occupation of the subject and the total number of lettable rooms. Market Value: is as defined in the RICS Valuation Professional Standards (the Red Book )/Residential Mortgage Valuation Specification (i.e. Market Value of the subject as a single residence with vacant possession). It will not be an Investment Valuation. 7

8 Notes: 1. Neither Market Rent nor Market Value will reflect deductions for landlord s costs, e.g. voids, insurance and management expense or other outgoings. 2. The Market Value may reflect the cost of returning the subject to a single dwelling; e.g. the removal fixtures and fittings such as kitchen units in the individual rooms, additional shower/wc facilities. Reporting Requirements: If the Project Form/Instruction does not specify it is to be a HMO valuation (using the BTL report format) and/or on inspection the surveyor finds it is a HMO the BTL report format must be used/selected manually. The following statements must be included in the Buy to Let report. Until the report template is amended these statements or similar must be included in General Remarks: The Present Market Value shown on page 2, is based upon vacant possession, single occupancy as if the property was presented as a single residence without alterations such as additional showers or kitchen units in bedroom, and not on an investment basis. Valuer s opinion of achievable Gross monthly rent based upon 100% occupation of the lettable rooms with no deductions for insurance, management, maintenance, voids or other outgoings. HOUSES IN MULTIPLE OCCUPATION These could fall within Category 3 of the RICS Professional Standards (UK Appendix 11, Section 5), i.e. licensable houses in multiple occupation (HMO) and with multiple units held on a single title. HMO s with more than 5 bedrooms are unacceptable. Valuation for the property to be provided on a normal residential basis i.e. how much would this type of family home sell for in the open market. Market Rent to be calculated on a room by room basis to reflect the special nature of a HMO. This will provide the maximum rent achievable in comparison to a normal single family occupation. Present Condition Valuation (special assumption that the property is vacant and exposed to the normal open market) Market Rent (special assumption that the rent is calculated assuming all lettable rooms are let with no deductions for voids, maintenance etc.) 8

9 CONCRETE PROPERTIES PRC houses are only acceptable when repaired under a PRC guaranteed scheme. Ex-Local Authority houses designated under the Housing Defects Act 1984 and the Housing Act 1985 where improvements have been undertaken under a PRC Home Ltd scheme or other approved scheme and a 10- year guarantee is available. The Leeds City Council repair scheme with certification is acceptable. All adjacent dwellings in a terrace must have been similarly repaired. Both halves of a semi-detached house must also have been repaired. The following house types are listed in the Acts: Airey Newland Underdown Boot Orlit Unitroy Boswell Lindsey Parkinson Unity Butterley Rema Wates Cornish Unit Schindler Walker Dorran Smith Wessex Dyke CC Stent Woolaway houses Gregory Stonecrete Woolaway bungalows Hamish Cross Stour Whitson-Fainhurst Hawksley SGC Tarran Wingett Myton Tee Beam System built properties except for those classified and listed above and repaired by PRC Ltd or other approved scheme are generally NOT acceptable security unless built after 2000 and with B.R.E. certification. Other system built houses are unacceptable with the exception of: 5 M'S Laing Easiform Livett-Cartwright The above three types are acceptable, subject to valuation. Wimpey No Fines are acceptable provided they are of post war construction. Large Panel Construction in either houses or flats is generally considered unacceptable. 9

10 COMMERCIAL AND MIXED USE Properties which are above, adjacent or near to commercial premises may be acceptable subject to the following: Properties which are directly above a commercial unit with an A3 usage licence will usually be declined. Properties which are adjacent or in close proximity to a Public House, Cattery, Kennels, restaurant or food outlet, petrol station, laundrette or pet shop would not be deemed as suitable security. This is not an exhaustive list. The proximity of the commercial use must not affect the quiet enjoyment of the property. Consideration should be given to the location of the property. The property must be located in a desirable area with good demand, readily saleable and readily marketable to be acceptable when considering the commercial usage. Hotels, Guest Houses and Bed & Breakfast: This type of use renders the property unacceptable. However, the Valuer may be asked to value the property on a single occupancy basis where the applicant is intending to convert the property into a single dwelling. Details of any structural alterations required should be identified in the valuation report as Essential Repairs. DECLINED PROPERTIES If the property is to be declined, complete the Mortgage Valuation Form as indicated above. Enter the reasons for declining in General Remarks. ENTER 0 as the valuation figure Recommendation enter NO to the question asking if the property represents suitable security. Generally, do not decline SUBJECT TO REPORTS If you suspect that there are significant works required, please do not enter a valuation. A valuation will be required upon receipt of any specialist reports that the Society subsequently obtain. 10

11 FLATS Flats and maisonettes are acceptable if they comply with the following criteria: Leasehold (freehold not acceptable) The property is purpose built or suitably converted The usual long leasehold tenure is offered as security NB See Tenure The minimum acceptable accommodation (not shared) consists of the following: Separate bedroom Separate bathroom or shower Combined sitting rooms/kitchens are acceptable as long as future saleability will not be affected. Where there are more than four floors there must be a lift. Properties based on the ground and first floors will be considered acceptable as long as there is suitable re-saleability and demand. Conversions If the property is a conversion, the Solicitors must confirm planning permission has been obtained from the local authority and the Valuer must report the conversion is of a good quality and be readily saleable. Modern good quality conversions (flats and maisonettes) are acceptable. Studio Flats Studio flats are acceptable for residential applications Internal floor areas of a minimum of 30sqm Self-contained with a separate bathroom required No basement studio flats Natural light required Studio flats are not acceptable for Buy to Let purposes Other (non-studio) new build flats must be over 28sq.m Ex Local Authority flats up to a maximum of 4 floors are acceptable if of a satisfactory form of construction with secure non-communal access, i.e. not balcony or deck access, and where a proven re-sale market exists. Coach Houses A flat above 2 or more garages where the flat owner may own one of the garages whilst others are used/owned by owners of neighbouring properties. These are acceptable provided the applicant will own the freehold of the whole block, the flat and all the garages (one or more of the garages will be subject to a long lease to a neighbouring property(ies)). 11

12 FLOODING Where the valuer is aware that the property is affected by flooding or is at potential risk from flooding with reference to local knowledge and freely available information, this should be highlighted to the lender. Details should be provided in the section further matters considered essential for mortgage purposes and reflected in the valuation for the property. GENERAL REMARKS Must be brief and relevant. Avoid the use of technical phrases or comments that may cause offence. Use the following order: 1. Location 2. Description of property including land where appropriate 3. General overall condition. If extended it is appropriate to mention in this section. Conveyancers should be asked to confirm appropriate consents obtained. GREEN DEAL From October 2012, home owners and tenants will be able to apply for energy improvements to a property with the cost of the works being met buy a loan provided by a Green Deal Provider. The loan is paid for via the energy supplier to the property where the savings in the energy use are used to service the loan. The loan is not secured against the property, but remains with the property upon re-sale. Where the surveyor becomes aware that the property has benefited from improvements under the Green Deal Scheme, these should be highlighted in the Valuation Report under further matters considered essential for mortgage purposes. HOLIDAY LETTINGS Properties proposed as security for holiday lets must be of traditional construction and should also be suitable for owner occupation. This means that any properties that exhibit restrictions on the length of time they can be occupied each year are unacceptable. A proven track record of resaleability is required. Properties on new build holiday park developments will not be acceptable. 12

13 HS2 The route of the High Speed rail network phase 1 (London Birmingham) has been established for some time now, with details of the proposed route of phase 2 (Birmingham to Manchester & Leeds) having now been released. Where a property is believed to be within influencing distance of the route, based upon available evidence at the time of inspection, the valuer will report whether a property is affected by the proposal. The impact upon future marketability will/may be affected and this has been reflected in the valuation of the property. Where a route has been finalised and a property is immediately adjacent to the track, the property should be declined as not in accordance with lender guidance. INNOVATIVE CONSTRUCTION Modern Methods of Construction or Innovative Construction will be judged individually on their merits. Where a form of construction is generally acceptable to Leeds, the construction specifics will be included in this section. Beco and Met Sec construction is acceptable. Ecobuild (i.e. Environmentally friendly or Green forms of construction) may be acceptable, but each application will be considered on its own merits provided guarantees are in place. Some System Build properties constructed after 2000 and with B.R.E. certification are generally acceptable. All new forms of construction will have to comply with the New Build with regard to New Build Warranties and Guarantees. NEW SYSTEM BUILD PROPERTIES (Also called Off Site Manufactured O.S.M.) Properties built after 2000 with certification from the Building Research Establishment are acceptable. BOPAS Generally properties built under the BOPAS scheme will be considered acceptable. 13

14 JAPANESE KNOTWEED Japanese Knotweed Cases will be treated on individual merit. Report as follows: Location of Japanese Knotweed Action It is within 7m of the subject s Further investigation is required. habitable space; and/or It is causing serious damage (including when it is over 7m from the subject s habitable space) to outbuildings, ancillary structures to the subject (e.g. conservatory), drains, drives/paths, boundary walls, etc. It is not within the subject s Report presence of the Japanese boundaries but is on neighbouring land and more than 7m from the subject s Knotweed. NOTE: if it is within 7m of the habitable space. subject s habitable space further There is no visible evidence but it is known to have been present on the subject plot (*and treated) but no details available. There is no visible evidence but there is a history in the area. investigation is required. Further investigation is required. Where Further Investigation is required, this is to be provided in the form of a report undertaken by a Japanese Knotweed specialist who is employed by a Property Care Association (PCA) registered firm. All recommended remedial works must be undertaken and covered by an insurance backed guarantee. The guarantee must be for a minimum of 10 years, be property specific and transferable to subsequent owners and mortgagees in possession. Valuer Reporting where Japanese Knotweed requires Further Investigation, a Nil Value should be returned pending Further Investigation. Upon receipt of the extent of the Japanese Knotweed and the cost of the remedial works, a valuation can be returned on the assumption that the works will be completed to a satisfactory standard. There is likely to still be some impact on the value of the property with the Japanese Knotweed being treated due to public perception, market and lender attitude to the problem. Valuer Reporting where Japanese Knotweed is understood to have been treated, a Nil Value should be returned pending confirmation of the remedial works and any guarantees. When the lender confirms that the treatment and guarantees are in accordance with their policy, a valuation can be returned on the assumption that the works were completed to a satisfactory standard. 14

15 LAND Houses With Land The amount of land must be consistent with the size and quality of the house, but usually no more than ten acres. The property must not be restricted to agricultural or associated issues. Agricultural Use: Properties with land used for agricultural purposes are unacceptable. These include smallholdings and farms. In addition, property with planning permission restricting its occupancy to persons employed in agriculture is unacceptable. Contaminated Land: either under or significantly close to the property to affect its saleability renders the property unacceptable. Valuers are expected to comment upon any known contamination in the area and its affect on saleability. LOCAL AUTHORITY PROPERTIES Ex Local Authority houses are acceptable if of a satisfactory form of construction. Ex Local Authority flats are acceptable if of a satisfactory form of construction with secure non-communal access, i.e. not balcony or deck access, and where a proven re-sale market exists. Local Authority properties should be interpreted as any former Social Landlord, Housing Association or MOD properties. MASONRY WALLS Walls of either solid (min 230mm) or cavity (min 280mm) construction and constructed of brick, natural stone, reconstituted stone, concrete block, cob or flint are acceptable. Single Skin/Single Leaf external walls are unacceptable. They can be considered to be acceptable if the applicant proposes to undertake a full programme of repair with the provision of an additional leaf. The Valuer should request full details as an essential repair. Small areas of single skin walls in single storey construction may be acceptable provided the Valuer is satisfied that the structural integrity of the wall, including damp penetration, is reasonable and that saleability is not affected. 15

16 Properties must have a minimum value of 50,000. MINIMUM VALUE MUNDIC BLOCK Mundic Block is a form of building material used in buildings built or extended between 1900 and 1950 in Cornwall and parts of Devon. Its use renders the property unacceptable unless a Mundic Report is obtained which indicates that the sample falls within category A or A/B NEW BUILD All New Build Valuations are to be valued in accordance with RICS guidance. The lender defines New Build as any property built within the last two years, which is complete and awaiting first occupation. In respect of New Build Incentives forms, the valuer should not complete a report in the absence of a CML disclosure of incentives form. Details of any incentives should be included in the section Are there any further matters considered essential for mortgage purposes? This applies to both the standard Mortgage Valuation and the Buy To Let Forms. Valuation Form Completion: The following text is mandatory and must be used in General Remarks in all New Build cases. The property is newly <<constructed/refurbished/converted>> and I confirm the valuation figure provided is for the property as new. It may not be possible to obtain the valuation figure if the property is resold as second-hand, especially if comparable new property is on offer at the same time. The New Property question on the valuation form should be answered Yes if New Build. Is the property under Construction Y/N: If New Build state Y if construction has started. If Major Refurbishment always state Y. Stage Completed: If New Build indicate stage of construction If works have commenced indicate closest stage from Wallplate, Roofed In or Plastered Out. 16

17 If new or less than 10 Years: In all cases state guarantee or method of supervision Incentives: Insert Y/N Alterations: If required, provide further details in Matters considered essential for mortgage purposes. New properties or those built within the last 10 years must be covered by: an NHBC Certificate; Zurich Municipal Scheme (for cover issued up to 30 September 2009); Building Life plan or Premier guarantee; Castle 10; LABC; Build Zone; The Q or; CRL 10 Year Structural Defects Insurance. Global Home Warranties 10 Year Structural Defects Insurance An Architect's Certificate may be accepted provided it is signed by a corporate member of the BIAT, RIBA or RICS and accompanied by evidence of Professional Indemnity cover. Retentions: If the New Build is under construction and not subject to Stage Payments you should enter the full loan amount being requested in the Amount of Retention field in the Valuation Section. RETENTIONS Retentions are required where there are essential matters to improve or maintain the property to a mortgageable standard. A retention should not be used for minor works. ROOFS Pitched Roofs of timber frame covered in slate, thatch, tile or copper. Modern lightweight mock slate is generally acceptable. Flat Roofs covered in copper, lead, zinc, asphalt or felt are generally acceptable. If the flat roof area is over 40% of the total roof area, details to be provided within the valuation report. 17

18 SOLAR PANELS Many residential properties are being installed with solar or photovoltaic panels. The panels can be installed at the owner s expense or form part of a rent a roof scheme. Where possible, the surveyor should identify the presence of solar panels in the valuation report and whether they form part of a rent a roof scheme or not in General Remarks. The lender accepts Leased Solar Panels where they are installed in accordance with the minimum requirements set out by the CML on behalf of lenders. SPECIALIST REPORTS The following sets out the types of specialist report and the qualification or governing body for the specialist to have or be a member of. Specialist Reports should only be requested to protect the property as a security, to ensure the property is improved to a mortgageable standard and where further specialist investigation is required. Asbestos Licensed contractor Dampness - Member of the Property Care Association (PCA) Drains - Specialist Drainage Contractor or Structural Engineer. Electrical - Member of the Institute of Electrical Engineers (IEE) Or Member of the National Inspection Council for Electrical Installation Contractors (NICEIC) Or National Association for Professional Inspectors and Testers (NAPIT) Gas - Gas Safe Registered Japanese Knotweed - Member of the Property Care Association (PCA) Invasive Weeds Group Mundic - Laboratory testing of core samples by Cornwall Consultants Structural Engineer: Member or Fellow of the Institution of Chartered Engineers or Structural Engineers. (MICE or FICE) Chartered Building Surveyor (MRICS/FRICS) Timber - Member of the Property Care Association (PCA) Trees - Qualified Arboriculturalist Wall Ties - Member of the Federation of Master Builders Or Member of the British Wall Tie Association Or Member of the Wall Tie Installers Federation 18

19 TENURE Select one option from Freehold, Leasehold, Former Feudal or Commonhold. Provide details where appropriate, e.g. for Leasehold the number of years unexpired. Leasehold properties are acceptable where: The unexpired lease remaining at start of mortgage must be 85 years If not known, assume 85 years remaining in accordance with Red Book If confirmed to the valuer to be below 85 years, The present value is to be returned as zero. The valuer should then include the need to extend the lease in Further matters considered essential and provide an after works value, which would include the lease extension (assume min 100 years) and any other works recommended. (a) It shall not be the valuers responsibility to establish unexpired lease length (b) Variable ground rent increases are fixed by the lease at the outset and reviews (which must be reasonable) are at 21 years or more intervals. Former Feudal /simple ownership is acceptable in Scotland. Shared ownership is acceptable report tenure as Leasehold unless advised to the contrary. The property should be valued on the basis of the Tenure as stated or assumed by the Valuer. Tenure that is not covered by the tick boxes should be described under Matters considered essential for Mortgage Purposes. Shared ownership is acceptable where a proven re-sale value exists. Generally, the Society considers any property that contains a restriction on resale unacceptable. However, there might be some circumstances where the restriction can be considered. It is not proposed that a list of acceptable restrictions is contained within these guidance notes, however the instruction to the surveyor is: Where the surveyor is made aware of a restriction they must take this into account when valuing the property and the impact on the value/marketability must be reflected and specifically referenced in the valuation report. 19

20 TIMBER FRAME Timber framed houses with softwood timber frame inner leaf and durable outer leaf of brick, block, stone, etc built before 1920 or after 1965 UNLESS the cavity has been filled. Older hardwood timber framed period houses are acceptable. Timber framed houses built between 1920 and (Except N.I.) are generally unacceptable and should be declined. TWO KITCHENS Two Kitchens: Executive type houses with second kitchens are considered suitable as long as the property cannot be let as separate units. Utility rooms are not considered as a second kitchen. UNACCEPTABLE PROPERTIES Commercial properties. For a residential or BTL application, if the property is part or fully commercial, decline and return a zero present value, however Home/Office use or private paddocks can be ignored provided that the property could be sold as a residence without any significant alteration. If acceptable, do not indicate commercial use on the form. (see commercial lending criteria). Some properties of non-standard construction; see Construction. Flying freeholds - except where relatively small parts extend over an adjoining property and saleability is unaffected. Normally up to a maximum of 10% of the total floor area is acceptable however each case will be considered on merits, so a value should be provided even if above 10% unless saleability is significantly affected. (Coach House flats are normally acceptable see Flats) Unrepaired PRC Homes designated as defective under the Housing Defects Act 1984 as amended. A repair would need to have been completed under an approved PRC Homes Ltd scheme for the property to be considered for mortgage lending purposes. Consideration will be given to repairs undertaken by Local Authorities but only on a case-by-case basis with full details of the repair being supplied. Some System Build properties constructed before Some properties with walls constructed entirely of timber: However, period property, or ones built after 1995 entirely out of timber will be considered on merit. Timber or Steel Framed properties: Where the cavity wall insulation has 20

21 been added after the completion of the original construction. Single Skin/Single Leaf external walls are unacceptable. They can be considered to be acceptable if the applicant proposes to undertake a full programme of repair with the provision of an additional leaf. The Valuer should request full details as an essential repair. Small areas of single skin walls may be acceptable provided the Valuer is satisfied that the structural integrity of the wall, including damp penetration, is reasonable and that saleability is not affected. Asbestos or Gypsum Plaster used in load bearing walls is an unacceptable form of construction. If any asbestos is identified in a property, it should be identified in the General Remarks section. Asbestos dust emanating from old insulation is considered a contaminant and, if identified, its removal should be made an Essential Repair following HSE guidelines & only by licensed contractors. Mundic Block is a form of building material used in buildings built or extended between 1900 and 1950 in Cornwall and parts of Devon. Its use renders the property unacceptable unless a Mundic Report is obtained which indicates that the sample falls within category A or A/B. High Alumina Cement or Calcium Chloride Additive used in the construction of concrete is unacceptable. If suspected in the property, the Valuer should ask for the use of high alumina cement or calcium chloride additive to be investigated by a Structural Engineer. If used in spans of less than 4.6 metres, it may be acceptable. Agricultural Use: Properties with land used for agricultural purposes are unacceptable. These include smallholdings and farms. In addition, property with planning permission restricting its occupancy to persons employed in agriculture is unacceptable. Contaminated Land: either under or significantly close to the property to affect its saleability renders the property unacceptable. Valuers are expected to comment upon any known contamination in the area and its affect on saleability. Mobile Homes and Houseboats are not acceptable. Some properties that contain a restriction upon resale might be considered by the underwriter but generally properties with restrictions will be considered unacceptable. Major Refurbishment projects are unacceptable. 21

22 VALUATION The Valuation figure must be the current market value of the property in its present condition, taking into account recommended retentions. Removable fittings and sales incentives should be disregarded. Valuations must conform to the RICS Professional Standards (Red Book) and the RICS Guidance Note The valuation of individual new-build homes or any document that supersedes this. Essential repairs are defined as those matters which are required to prevent further deterioration in condition State the amount of retention to be made for essential repairs in the report. If the property is recommended subject to structural reports DO NOT enter a Present Condition Value. You must give a valuation with essential repairs completed. Following receipt of reports you will be given the opportunity to amend the valuation if necessary. Please enter a zero if the property is not an acceptable security. 22