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Question: 5.14.9. If different from 1.11, contact point for matters connected with the lease:

Lender Answer
Accord Buy to Let As 1.11a.
With regard to ground rent, please note that we have the following additional requirements to those set out in Part 1 of Section 5.14.9:
* the maximum ground rent at the start of the lease term must not exceed £1000 a year;
* the ground rent must not be capable of being increased during the first 21 years of the lease, and not more frequently than every 21 years during the rest of the lease term;
* when the ground rent is reviewed, any increase must not exceed the higher of i) 100% of the ground rent payable immediately before the date of the rent review: ii) a figure increased in accordance with the equivalent percentage change in the Index of Retail Prices since the date of the previous rent review.

Accord Mortgages Ltd As 1.11a.
With regard to ground rent, please note that we have the following additional requirements to those set out in Part 1 of Section 5.14.9
* the ground rent at the start of the lease term must not exceed £1000 a year
* the ground rent must not be capable of being increased during the first 21 years of the lease, and not more frequently than every 21 years during the rest of the lease term
* When the ground rent is reviewed, any increase must not exceed the higher of i)100% of the ground rent payable immediately before the date of the rent review: ii) a figure increased in accordance with the equivalent percentage change in the Index of Retail Prices since the date of the previous rent review.
Adam & Company See 1.11
Adam & Company International See 1.11

Ahli United Bank (UK) plc Ground Rents
We will not lend on properties with onerous ground rent provisions. Ground rent must not exceed 0.1% of the property value when being taken as security. It is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index, however ground rent provisions that contain unreasonable multipliers (i.e. doubling every 5, 10 or 15 years) are not acceptable as standard and must be referred to Central Administration Unit.
Aldermore Bank PLC As 1.11.
Allied Irish Bank (GB), a trading name of AIB Group (UK) Refer to AIB Group (UK) plc, Central Securities (GB)
Atom Bank plc As per 1.11.

You should enquire whether the landlord or managing agent foresees any significant increase in the level of the service charge in the reasonably foreseeable future and, if there is, you must report to us (see part 2).
Aviva Equity Release UK Ltd See 1.11
Bank of Ireland (UK) plc Case Manager (see front page of the Offer for contact details).

A property will be considered to have onerous leasehold terms where one or all of the following is identified
• The original lease term on a new build flat (or second hand flat built post 2000) is less than 125 years
• The original lease term on a new build house (or second hand house built post 2000) is less than 250 years
• The maximum ground rent at the start of the lease term exceeds 0.1% of the property value or £500 a year whichever is the higher.
• The ground rent must remain reasonable at all times during the lease term, with unreasonable multipliers not allowed. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
The lease must be amended to comply with the above. If not the case cannot proceed.
Bank of Ireland as Bank of Ireland Mortgages Case Manager (see front page of the Offer for contact details).

A property will be considered to have onerous leasehold terms where one or all of the following is identified
• The original lease term on a new build flat (or second hand flat built post 2000) is less than 125 years
• The original lease term on a new build house (or second hand house built post 2000) is less than 250 years
• The maximum ground rent at the start of the lease term exceeds 0.1% of the property value or £500 a year whichever is the higher.
• The ground rent must remain reasonable at all times during the lease term, with unreasonable multipliers not allowed. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
The lease must be amended to comply with the above. If not the case cannot proceed.
Bank of Scotland Beginning A Bank of Scotland Plc, Mortgage Operations, Pentland House, 8 Lochside Avenue, Edinburgh, EH12 9DJ. Tel: 0345 603 1136 Fax: 0131 339 2366
Bank of Scotland Beginning O Address and telephone number on the Mortgage Offer.
Barclays Bank UK PLC Usually there must be adequate ground rent to ensure that the lessor has continuing interest in the property:

Peppercorn or low ground rent may be accepted in the following circumstances:

• If the lessor is a Management Company and all the leaseholders are obliged to be members so there is no merit in paying themselves a ground rent. Check that there are adequate provisions for repairs, maintenance, insurance etc. and an adequate maintenance charge.
• If the lessor covenants do not require any positive action, e.g. in the case of maisonettes.
• If the lessor is the Local Authority
• If the lessor is a long established company and adequate repairing and other arrangements together with a maintenance charge are contained in the lease.
• If the lessor is a Housing Association or Local Authority under shared ownership arrangements.
• The lease has been extended under the Leasehold Reform Housing and Urban Development Act 1993 (as amended) which gives an additional 90 years at a peppercorn ground rent.

Escalating ground rents are acceptable provided the amounts and terms are clearly stated and they comply with the following requirements:

RPI linked Ground rents:
• Ground rent is indexed to RPI no more frequently than every 5 years.
• Ground rent up to 0.1% of the current market value is acceptable
• We may accept Ground rent up to 0.2% of the current market value subject to review

Doubling ground rents:

• Should not double more frequently than every 20 years
• Should not continue to double after 125 years
• Ground rent up to 0.1% of the current market value is acceptable
• We may accept Ground rent up to 0.2% of the current market value subject to review
Barnsley Building Soc, a trading name Yorkshire Building Soc As 1.11a.
Birmingham Midshires Completions Team at office issuing mortgage instructions. See Offer for contact details.
Bluestone Mortgages As per 1.11.
Bradford & Bingley Plc As 1.11a
Britannia, a trading name of The Co-operative Bank plc Unreasonable multipliers of ground rent or other onerous ground rent provisions are not allowed and must be reported to us. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index, and where this is the case, we do not need to be advised. However, neither fixed increases which are clearly above inflation expectation nor unreasonable multipliers of ground rent (for example, doubling every 5, 10 ,15 or 20 years) will be permitted.

Ground rent must not exceed 0.1% of the market value of the property when taken as security. However, we may accept ground rent up to 0.2% of such market value, subject to review.

Where ground rent provisions cause (or, during the term of the mortgage, are likely to cause) the lease to be treated as an assured shorthold tenancy under the Housing Act 1988, this need not be reported to us if either:
(i) arrangements are made for the lease to be formally varied to restrict the ground rent below the statutory level (currently, an annual ground rent of more than £250 (or over £1,000 for properties in London)); or
(ii) a suitable indemnity policy (which complies with our requirements as set out in section 9 (Indemnity Insurance)) is put in place to protect us.
Buckinghamshire Building Society Buckinghamshire Building Society, High Street,
Chalfont St Giles, Bucks,
HP8 4QB
e-mail mortgages@bucksbs.co.uk
Tel: 01494 879517
Fax: 01494 877259
Capital Home Loans Customer Services, Capital Home Loans Ltd, Admiral House, Harlington Way, Fleet, Hants, GU51 4YA
Chelsea Building Society (a trading name of Yorkshire BS) As 1.11a.
With regard to ground rent, please note that we have the following additional requirements to those set out in part 1 of Section 5.14.9:
* the maximum ground rent at the start of the lease term must not exceed £1000 a year
* the ground rent must not be capable of being increased during the first 21 years of the lease, and not more frequently than every 21 years during the rest of the lease term
* when the ground rent is reviewed, any increase must not exceed the higher of i) 100% of the ground rent payable immediately before the date of the rent review: ii) a figure increased in accordance with the equivalent percentage change in the Index of Retail Prices since the date of the previous rent review.
Clydesdale Bank plc Mortgage Services
PO BOX 3105
Clydebank
Glasgow
G60 9AU
Tel - 0800 121 4203

The Bank has no objection to a lease which contains a provision for a periodic increase of the ground rent provided that the amount remains reasonable throughout the term of the lease; any increase must be linked to the equivalent percentage change in the Retail Price Index (RPI) or a similar index. If subject to a multiplier, any multipliers which cause a doubling of rent every period of 15 years or less are not permitted.

If you are unsure if the terms of the lease are unreasonable please refer the details to us.
Co-operative Bank plc The Co-operative Bank New Lending, Britannia House, Leek, Staffordshire Moorlands ST13 5RG or The Co-operative Bank New Lending DX16351 LEEK.
Tel No: 08000 288 288
Coutts See 1.11
Coutts Finance Co See 1.11
Coventry Building Society New Lending Department, Godiva House
Binley Business Park,
Harry Weston Road,
Coventry
CV3 2TB
Cynergy Bank As per 1.11.b
We will not lend on leasehold properties where the ground rent or service charge is onerous; ground rent and other analogous property fees must be reasonable at all times during the lease term and must not exceed more than 0.1% of the property value at the start of the lease term. It is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index or to escalate periodically in line with the increase in the RPI since the date of the last review. Unreasonable multipliers of ground rent will not be permitted and cases other than as described above must be referred to us.
Darlington Building Society Customer Support Department, Principal Office
DB UK Bank Ltd db mortgages
PO Box 890
Newport
NP20 9LZ
Tel: 0845 650 6281
DX Address - not available
Dudley Building Society As 1.11a
Earl Shilton Building Society Refer to Mortgage Dept at Head Office - Earl Shilton 01455 844 422
Ecology Building Society As 1.7
Family Building Soc (a trading name of National Counties BS) Loans Underwriting Department, Ebbisham House, 30 Church Street, Epsom, Surrey KT17 4NL
DX 30729 EPSOM
Email: loansunderwriting@familybsoc.co.uk

We will not lend on properties with onerous ground rent provisions. We consider ground rent provisions to be onerous where:
- the maximum ground rent at the start of the lease term exceeds 0.1% of the property value or £500 per year whichever is higher;
- the ground rent must remain reasonable at all times during the lease term, with unreasonable multipliers not allowed. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
The lease must be amended to comply with the above. If not, the case cannot proceed.
Fleet Mortgages See 1.11a
Foundation Home Loans New Business Department, Foundation Home Loans, 5 Arlington Square, Downshire Way, Bracknell, RG12 1WA
Email: FHL@foundationhomeloans.co.uk
Tel: 0344 770 8033
Any concerns regarding onerous or commercially biased lease terms must be referred to us.
Furness Building Society As 1.11a
GE Money Home Lending Ltd GE Money Home Lending has withdrawn from the UK mortgage market.
Godiva Mortgages Ltd New Lending Department, Godiva House
Binley Business Park,
Harry Weston Road,
Coventry
CV3 2TB
Habito as per 1.11
Halifax Customer Services Centre,(see offer for address and fax number)
Halifax Loans Ltd Halifax Loans Limited, Trinity Road, Halifax, HX1 2RG
Hampden & Co. plc See 1.11
Handelsbanken Refer to Branch office instructing you.
Harpenden Building Society As 1.11a
Hinckley and Rugby Building Society Principal Office, Mortgage Department, Advances Section.
Hodge Equity Release As per 1.11a
Hodge Life As per 1.11a
Holmesdale Building Society Lender.
HSBC UK Bank plc We will not provide residential or Buy to Let Mortgages in the following circumstances:
• The property is subject to an onerous Lease clause regarding an excessive or unreasonably escalating ground rent.
Intelligent Finance Securities, Intelligent Finance, PO Box 890, Leeds, LS1 9UG


Investec Bank plc Please contact the member of Banking Legal or PBLO notified to you in the Transaction Instructions.
ITL Mortgages New Lending Department, Godiva House
Binley Business Park,
Harry Weston Road,
Coventry
CV3 2TB
JPMorgan Chase Bank, N.A. Refer to office issuing Mortgage Instructions.
Kensington Mortgage Company Ltd Kensington Mortgages, New Business Operations Centre, Ascot House, Maidenhead Office Park, Maidenhead, SL6 3QQ. Tel: 03444 990011 Fax: 03444 990022.


Any ground rent provisions which cause (or, during the term of the mortgage, are likely to cause) the lease to be treated as an AST under the Housing Act 1988 are NOT acceptable unless the Lease is varied or a suitable indemnity policy is put in place to protect us. The applicable legislation relates to leases with an annual ground rent of more than £250 (or over £1,000 for properties in London).
Kent Reliance (a trading name of OneSavings Bank plc)  
Keystone Property Finance As 1.11a
Any concerns regarding onerous or commercially biased lease terms must be referred to us
Landbay See.1.11a Legals@landbay.co.uk
Landmark Mortgages Limited New Mortgage Completions
Landmark Mortgages
PO Box 656
Durham
DH1 9LY

Tel - 0330 159 7152
Leeds Building Society As per 1.11a.

With regard to ground rent, where the ground rent exceeds 0.1% of the property value you must report this to us and we will confirm whether the mortgage can proceed.
Legal & General Home Finance Ltd Legal Services Department.
LendInvest See 1.11a
Lloyds Bank plc pre fixed 20/40 Mortgage Processing. Please see 1.11.
Lloyds Bank plc pre fixed 50/30/77 Mortgage Processing. Please see 1.11a
Lloyds TSB Scotland plc Mortgage Processing. Please see 1.11a
M&S Bank M&S Bank, PO Box 12, Skipton, BD23 2HL. Telephone Number 0345 002 1128 Fax 0345 111 0322
Magellan Homeloans Issuing Office
Manchester Building Society Underwriting Department.
Market Harborough Building Society As per 1.7

a. Any ground rent at the start of the mortgage term should not exceed annually £250 outside of London or a £1,000 inside London. If this is the case you must immediately contact the Society. We will advise you if our mortgage offer remains valid.
b. Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to the Society and we will advise you if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to the Society immediately.
Masthaven Bank As per 1.11.
Metro Bank plc As per 1.11.
Molo Finance Buy to Let Mortgages As 1.11a.
Monmouthshire Building Society Lending Operations Department
Monmouthshire Building Society
Monmouthshire House
John Frost Square
Newport
NP20 1PX
Mortgage Agency Services Unreasonable multipliers of ground rent or other onerous ground rent provisions are not allowed and must be reported to us. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index, and where this is the case, we do not need to be advised. However, neither fixed increases which are clearly above inflation expectation nor unreasonable multipliers of ground rent (for example, doubling every 5, 10 ,15 or 20 years) will be permitted.

Ground rent must not exceed 0.1% of the market value of the property when taken as security. However, we may accept ground rent up to 0.2% of such market value, subject to review.

Where ground rent provisions cause (or, during the term of the mortgage, are likely to cause) the lease to be treated as an assured shorthold tenancy under the Housing Act 1988, this need not be reported to us if either:
(i) arrangements are made for the lease to be formally varied to restrict the ground rent below the statutory level (currently, an annual ground rent of more than £250 (or over £1,000 for properties in London)); or
(ii) a suitable indemnity policy (which complies with our requirements as set out in section 9 (Indemnity Insurance)) is put in place to protect us.
Mortgage Express As 1.11a
Mortgage Express No 2  
National Counties Building Society Loans Underwriting Department, Ebbisham House, 30 Church Street, Epsom, Surrey KT17 4NL
DX 30729 EPSOM
Email: loansunderwriting@ncbs.co.uk

We will not lend on properties with onerous ground rent provisions. We consider ground rent provisions to be onerous where:
- the maximum ground rent at the start of the lease term exceeds 0.1% of the property value or £500 per year whichever is higher;
- the ground rent must remain reasonable at all times during the lease term, with unreasonable multipliers not allowed. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
The lease must be amended to comply with the above. If not, the case cannot proceed.

National Westminster Bank plc As 1.11a.

N.B. if the ground rent exceeds £250 per annum (£1000 per annum for London properties) you must confirm that the terms of the lease in relation to the ground rent are acceptable. We can then approach the valuer to confirm whether the cost of the ground rent would affect property suitability and marketability.
Nationwide Building Society Issuing Office

- Our minimum unexpired lease term is 55 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.


SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) – acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to every 5 years
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Nedbank Private Wealth Ltd You must refer to us.
New Street Mortgages New Street Mortgages, PO Box 4761, Maidenhead, SL60 1HW. Tel: 0333-300-3100, Fax: 0333-300-3132, email: enquiries@newstreetmortgages.com

Any ground rent which is currently at a level or, may reach a level referred to within the Housing Act 1988 (hence allowing a long lease to be treated as an AST) is NOT acceptable unless the Lease is varied or a suitable indemnity policy is put in place to protect us. The applicable legislation relates to leases with an annual ground rent of more than £250 (or over £1,000 for properties in London).
NRAM Ltd See 1.11a
Paragon Buy to Let Mortgages 1. Where ground rent provisions cause (or, during the term of the mortgage, are likely to cause) the lease to be treated as an Assured Tenancy under the Housing Act 1988, this need not be reported to us if either:-
a. The lease can be varied to restrict ground rent below the statutory level; or
b. A suitable indemnity policy is put in place to protect us (but please notify us about the policy in accordance with our instructions)
2. Any onerous ground rent provisions should be reported to us. In particular, provisions which allow for ground rents to be increased over and above the Retail Price Index (or other inflation-linked index) are considered to be onerous and are unlikely to be acceptable to us e.g multipliers such as doubling after fixed periods of less than 25 years; or fixed increases which are clearly above inflation expectation.
Paragon Residential Owner-Occupied Mortgages As 1.11a.
Paratus AMC Ltd New Business Department, Foundation Home Loans, 5 Arlington Square, Downshire Way, Bracknell, RG12 1WA /Email: FHL@foundationhomeloans.co.uk/ Tel: 0344 770 8033.
Any concerns regarding onerous or commercially biased lease terms must be referred to us.
Parity Trust As 1.7
Pepper Money Pepper Money Completions Department Tel No. 0333 370 1101 or email lendingenquiries@pepper.money
Pepper Money (PUK) Pepper Money Completions Department Tel No. 0333 370 1101 or email lendingenquiries@pepper.money
Platform (a trading name of The Co-operative Bank p.l.c.) Unreasonable multipliers of ground rent or other onerous ground rent provisions are not allowed and must be reported to us. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index, and where this is the case, we do not need to be advised. However, neither fixed increases which are clearly above inflation expectation nor unreasonable multipliers of ground rent (for example, doubling every 5, 10 ,15 or 20 years) will be permitted.

Ground rent must not exceed 0.1% of the market value of the property when taken as security. However, we may accept ground rent up to 0.2% of such market value, subject to review.

Where ground rent provisions cause (or, during the term of the mortgage, are likely to cause) the lease to be treated as an assured shorthold tenancy under the Housing Act 1988, this need not be reported to us if either:
(i) arrangements are made for the lease to be formally varied to restrict the ground rent below the statutory level (currently, an annual ground rent of more than £250 (or over £1,000 for properties in London)); or
(ii) a suitable indemnity policy (which complies with our requirements as set out in section 9 (Indemnity Insurance)) is put in place to protect us.
Precise Mortgages (Charter Court Financial Services Ltd) Ground rent and its review mechanism: For owner-occupied, residential properties where the ground rent exceeds £250 (or £1,000 in Greater London), or where it may exceed this limit in the future, you must either have the lease varied to remove any risk of its construction as an Assured Tenancy under the Housing Act 1988 or obtain suitable indemnity insurance. This Part 2 requirement does not apply to rental investment properties (Buy to Let mortgage Offers).
Principality Building Society Ground rent and other fees referred to within the Lease must be reasonable at all times during the Lease term. Ground rent increases linked to RPI or a similar index are generally acceptable but unreasonable multipliers of ground rent are not acceptable. If you are in doubt you should refer to us and we shall refer this to our valuer. Any ground rent which is currently at a level or, may reach a level referred to within the Housing Act 1988 (hence allowing a long lease to be treated as an AST) is NOT acceptable unless the Lease is varied or a suitable indemnity policy is put in place to protect us. The applicable legislation relates to leases with an annual ground rent of more than £250 (or over £1,000 for properties in London).
The risk is that a Court has no option other than to grant an order for possession in arrears situations and also the power of a Court to grant relief from forfeiture of the lease does not apply to ASTs if at least 3 month's rent is more than 3 months overdue. The Court has no choice in such cases - it must terminate the lease and give possession back to the freeholder. Usual provisions for relief from forfeiture are not applicable.

As in 1.7:
Mortgage New Business
PO Box 89
Queen Street
CARDIFF
CF10 1UA
0330 333 4021
Rooftop Mortgages Ltd The address and contact details shown on the mortgage offer.
Saffron Building Society As 1.11
Sainsbury's Bank Contact point as detailed in 1.11a.
Santander UK plc Ground Rents
1. Where ground rent provisions cause (or, during the term of the mortgage, are likely to cause) the lease to be treated as an Assured Shorthold Tenancy under the Housing Act 1988, this need not be reported to us if either:
a. the Lease can be varied to restrict the ground rent below the statutory level; or
b. a suitable indemnity policy is put in place to protect us (but please notify us about the policy in accordance with the Indemnity Insurance instructions)

2. Any onerous ground rent provisions should be reported to us. In particular, provisions which allow for ground rents to be increased over and above the Retail Price Index (or other inflation-linked index) are considered to be onerous and are unlikely to be acceptable to the Bank e.g. multipliers such as doubling after fixed periods of less than 25 years; or fixed increases which are clearly above inflation expectation.
Scottish Building Society  
Scottish Widows Bank New Business Processing (see 1.11a).
Secure Trust Bank PLC As 1.11
Skipton Building Society Completions Team

GROUND RENT & EVENT FEES
Ground rent and other event fees must remain at a reasonable level at all times during the lease term with a minimum period of 10 years between any increases.
It is acceptable if the ground rent escalation is linked to the Retail Price Index (RPI) or a similar index.
Clauses providing for Ground Rent increases that 'double' (or more) the preceding level are not acceptable.
For any cases not meeting these requirements that are considered not to constitute onerous terms, please report to Completions team for further consideration.
For any cases that are unacceptable due to any of the points above, we would consider proceeding if you are able to remove the issues of concern by way of a lease variation to complete no later than at the time of the mortgage advance.
St James Place Bank Mortgage Administration, St James's Place Bank, Administration Centre, PO Box 1869, Livingston EH54 7XS
State Bank of India UK As 1.11a.
Swansea Building Society 11/12 Cradock Street
Swansea
SA1 3EW
01792 739100
Tesco Bank (a trading name of Tesco Personal Finance plc) Ground rent and other event fees must be reasonable at all times during the lease term. The following increases are acceptable:
- Increasing no more than RPI (Retail Price Index) or a similar index;
- Doubling no more than every 25 years
Where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, and must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
Contact point as detailed in 1.11b.
The Mortgage Business The Mortgage Business, PO Box 548, Leeds LS1 1WU. Fax no. 0845 6039009
The Mortgage Lender Limited completions@themortgagelender.com

Tel: 0344 257 0426
The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to 5 years
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
The Royal Bank of Scotland plc As detailed above in 1.11a.

N.B. if the ground rent exceeds £250 per annum (£1000 per annum for London properties) you must confirm that the terms of the lease in relation to the ground rent are acceptable. We can then approach the valuer to confirm whether the cost of the ground rent would affect property suitability and marketability.
The Royal Bank of Scotland plc Direct Line Mortgages As detailed above in 1.11a.
The Royal Bank of Scotland plc Direct Line One As detailed above in 1.11a.
The Royal Bank of Scotland plc First Active As detailed above in 1.11a
The Royal Bank of Scotland plc Natwest one Account As detailed above in 1.11a.
The Royal Bank of Scotland plc One Account As detailed above in 1.11a.
The Royal Bank of Scotland plc Virgin One As detailed above in 1.11a.
The Tipton & Coseley Building Society Mortgage Department.
Together Personal Finance Limited Contact point as detailed in 1.11a above.
Topaz Finance Ltd Topaz Finance Limited
Gateway House, Gargrave Road,
Skipton,
North Yorkshire,
BD23 2HL
0345 389 1672
TSB Bank plc Mortgage Processing. Please see 1.11a
Ulster Bank Ltd As detailed above in 1.11a.

N.B. if the ground rent exceeds £250 per annum (£1000 per annum for London properties) you must confirm that the terms of the lease in relation to the ground rent are acceptable. We can then approach the valuer to confirm whether the cost of the ground rent would affect property suitability and marketability.
Vida Homeloans As 1.11a
Virgin Money Mortgage Processing
Operations
Virgin Money
Jubilee House
Gosforth
Newcastle upon Tyne
NE3 4PL

or DX 60350 Gosforth

Solicitors Helpline: 0845 604 4858
Whistletree (a trading name of TSB Bank plc) Details as 1.11a
Yorkshire Bank Home Loans Ltd Mortgage Services
PO BOX 3105
Clydebank
Glasgow
G60 9AU
Tel - 0800 121 4203

The Bank has no objection to a lease which contains a provision for a periodic increase of the ground rent provided that the amount remains reasonable throughout the term of the lease; any increase must be linked to the equivalent percentage change in the Retail Price Index (RPI) or a similar index. If subject to a multiplier, any multipliers which cause a doubling of rent every period of 15 years or less are not permitted.

If you are unsure if the terms of the lease are unreasonable please refer the details to us.

Yorkshire Building Society As 1.11a.
With regard to ground rent, please note that we have the following additional requirements to those set out in part 1 of Section 5.14.9:
* the maximum ground rent at the start of the lease must not exceed £1000 a year
* the ground rent must not be capable of being increased during the first 21 years of the lease, and not more frequently than every 21 years during the rest of the lease term
* when the ground rent is reviewed, any increase must not exceed the higher of i) 100% of the ground rent payable immediately before the date of the rent review: ii) a figure increased in accordance with the equivalent percentage change in the Index of Retail Prices since the date of the previous rent review.
Zephyr Mortgages We will not lend where the lease reserves a ground rent in excess of £250 per annum or £1000 in Greater London. Ground rent increases which reference the retail price index are acceptable to us. Please refer to us if a different index is referenced. Where ground rent increases reference a fixed multiplier, the minimum period over which the ground rent may double is 25 years. For example, a ground rent which doubles every ten years is not acceptable to us. If you are unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us for Valuer consideration.