We appreciate that due to coronavirus many customers are reluctant to let surveyors carry out the usual physical property valuations and that many surveyors willl no longer conduct them. So we can continue to help meet customers’ needs, we have found an alternative approach. We will be valuing properties using a remote desktop valuation and to enable us to adopt this we need to make some changes to our lending criteria as outlined below.
- Restricted our lending criteria for all new business and any existing applications in the pipeline which have yet to progress to valuation stage.
- Restricted the maximum LTVs on the J3, J4 and J5 LTV series lending until a full valuation is available.
LENDING CRITERIA
To enable us to continue accepting and processing lifetime mortgage applications, we have implemented some temporary lending criteria changes in respect to property criteria, LTV limits and valuations.
Until further notice the following changes apply to our acceptable properties criteria, please see updated Acceptable Properties Guide.
Based on the amended criteria, we will continue with both pipeline (where a valuation has not yet been carried out) and new applications using a remote desktop valuation. Where an application does not meet the updated criteria we will hold the application until such time as a full physical inspection can be carried out.
Changes to lending criteria
| Criteria | Acceptable | Not acceptable for desktop valuations |
|---|---|---|
| Minimum property value | £100,000 and above (was £70,000) | Below £100,000 |
| Maximum property value | Up to £1m within Greater London Up to £750,000 for the rest of the UK | Above £1m within Greater London Above £750,000 for rest of the UK |
| Land | Up to 1 acre of land (was 5 acres) | Above 1 acre |
| Property location | ||
| Region | England, Wales and mainland Scotland | Northern Ireland, Scottish Isle and rural locations |
| Proximity to commercial premises | Where in close proximity to commercial premises that do not affect resaleability | Adjacent or above commercial premises |
| Flood risk area | Medium or under | High |
| Coastal erosion area | Not acceptable for desktop | |
| Age of property | Built in the period 1850 to 2017 | Built before 1850 or after 2017 |
| Property type | ||
| Construction type | Traditional construction | Non-traditional construction i.e. thatched or flat roofs, modern methods of construction. |
| Flats | Flats with acceptable EWS1* or built pre-1996 of traditional construction and with no visible evidence of combustible external material relating to the wall system. | No ESS1 form in place |
| Office to residential conversions | Not acceptable for desktop | All office conversions |
| Properties with an annex | Not acceptable for desktop | All properties with an annex |
*RICS, the BSA and UK Finance have agreed an industry-wide process – to be used by valuers, lenders, building owners and fire safety experts – The External Wall Fire Review process requires a fire safety assessment to be conducted by a suitably qualified and competent professional and confirmed using the EWS1 Form. It delivers assurance for lenders, valuers, residents, buyers and sellers.
Just For You Lifetime Mortgage LTV series – availability
The J1 and J2 LTV series remain available at the published LTV scales.
Initial advances on the J3-J5 LTV series will be subject to a 10% reduction to the published LTV scales. The remaining 10% will be held within an unused cash facility, please see the worked example below. The unused cash facility will be temporarily suspended until a full physical inspection valuation being carried out as soon as possible.
Worked example for J3-J5 retained cash facility.
Property value: £200,000 J3 (youngest applicant age 67) our standard LTV is 38.1%. With a desktop valuation the maximum initial advance LTV would reduce to 34.29% meaning an initial loan amount of £68,580 and a cash facility of £7,620, the cash facility will only become available to drawdown once a full inspection valuation has been carried out and confirms the property valuation and the property meets our standard lending criteria.
Existing Customers
For rebroke customers* who require additional lending or a Further Advance customer, where we have a satisfactory existing valuation dated within the last 24 months, we will carry out a desktop valuation and the advance will be subject to our published LTVs.
For rebroke customers* who require additional lending or a Further Advance customer, where we have a satisfactory existing valuation which is more than 24 months, we will carry out a desktop valuation and the advance will be subject to the same rules as new customers.
For rebroke customers, if the existing valuation is more than 24 months old and the amount to be borrowed is the same as the existing loan amount after any ERC payable then the standard LTVs will be available.
*Rebroke customer is defined as an existing Just customer looking to remortgage to new loan on J1-J5 LTV series.
Additional Customer Questionnaire
In support of the desktop valuation we will require the completion of an Additional Property Questionnaire and provision of supporting internal photos as explained in the questionnaire.
