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Valuation Reports UK and Scottish Property from Shepherd

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					       Guidance Notes
Internal and External Valuers




                                 February 2009
                              PRINCIPALITY SURVEYORS
                                 TY CROES CWRLWYS
                               VALEGATE RETAIL PARK
                                CULVERHOUSE CROSS
                                      CARDIFF
                                      CF5 6EH


                               Tel No: 0845 045 0450
                               Fax No: 0845 045 0460

                     e-mail: surveyinstructions@principality.co.uk



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Principality Surveyors process all mortgage valuation instructions on behalf
of Principality Building Society as well as other Group Subsidiaries including
Nemo Personal Finance.

Service levels are monitored on an ongoing basis and we have a formal audit
process in place to ensure adherence with all aspects of lending and
reporting requirements.

If you have any queries relating to a Principality valuation instruction,
please do not hesitate to contact a member of the survey team.


David Evans                      Head of Surveying Services
                                 david.evans@principality.co.uk

Andrew Gregory BSc MRICS         Managing Surveyor
                                 andrew.gregory@principality.co.uk

Katie Newsham                    Survey Administration Manager
                                 katie.newsham@principality.co.uk

Administration Team              Tel: 0845 045 0450
                                 Fax: 0845 045 0460
                                 surveyinstructions@principality.co.uk




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    SECTION 1                      Administration

Service Level Agreement

Please only undertake a valuation instruction on our behalf if you are able to
return the completed valuation to the instructing source, within the following
agreed service standard;

    PRA and Mortgage Valuation –3 working days.

    Re-inspection/Revaluation/Drive-by/Re-type – 3 working days.

    Homebuyers Report – 3 working days for the PRA and mortgage
     valuation, 5 working days for the Homebuyer element.

    Building Survey – 3 working days for the PRA and mortgage valuation, 7
     working days for the building survey.

All service standards are measured from the day of instruction to the day
that the report is received by Principality Surveyors.

    Instructions must be declined if there is a conflict of interest.

Cancellations

    If you are unable to carry out a valuation within the Service Standard
     time-scales detailed above, or for any other reason, then please contact
     the Administration Team.

Appointment Dates

    Appointments for the valuation should be made and logged on the day of
     receipt of the instruction. Please update Quest with appointment dates
     immediately.

Delays

    If the appointment date is made outside agreed service standards (e.g.
     at the request of the applicant) or contact cannot be made with the
     applicant, please notify the survey team.

Buy to Let Cases

    Please note that when completing the valuation report for these
     products that additional information is required.




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Fees and Invoicing

   Valuations are instructed in accordance with the Principality fee scales
    and must only be accepted on this basis.

   For right to buy and remortgage cases the fees will be based on the value
    as at present.

Valuation Reports

   If there is a problem with the valuation e.g. 10% variance below the
    stated purchase price/estimated value, major defects or retention,
    suspected fraud etc, you should contact the survey team immediately.

Post Valuation

   If you need to correct something on the original instruction, e.g change
    of address or applicants details, please do not change the record on
    Quest. In these cases you must contact the admin team and they will
    ensure that our records are updated.




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    SECTION 2                    Acceptability

Qualifications

    FRICS & MRICS qualifications are acceptable.

    The Panel Company is required to have a minimum of two RICS qualified
     partners/directors.

    Limited Liability Partnerships (LLP) will not be accepted in most
     instances.

    Any change in status MUST be notified to the Professional Services
     Manager in writing.

Professional Indemnity Insurance:

    We should be provided with a copy of the PII renewal details within a
     maximum of 28 days of expiry of the existing policy.
    The excess should not exceed 3% of the cover.
    Minimum PI cover is now £1m. Panel Companies agree not to undertake
     a valuation that exceeds their PI limit.
    Please note ALL valuations over £1m must be countersigned by an Area
     Surveyor or Director.

Any changes in the policy terms MUST be highlighted




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  SECTION 3                  Report Changes

As part of a general business review, all valuers should be aware of the
revised reporting requirements for all new Principality mortgage cases.

Please note that these changes have been introduced to facilitate the
use of automated underwriting procedures, where appropriate, and
compliance in full with this guidance is mandatory.

Any queries should be directed to the Professional Services Manager.

OUTLINE

With effect from 16th February 2009, the existing mortgage valuation form
(PB1) will be replaced by a combined PRA and Mortgage Valuation form
(PB9).

Please note that an additional form will be introduced shortly. This will
comprise a PRA only option and further guidance will be issued when
appropriate.

The form will be available on Quest, together with associated mandatory
and preferred text for use where required.

All valuers should in particular note the guidance below for completion of
the property risk assessment and the use of mandatory text. Failure to
comply will lead to increased processing times and regular audits will be
undertaken to ensure compliance with this guidance.

Particular care is required for completion of the PRA as this underpins our
underwriting platforms.

All valuers should familiarise themselves with these requirements and note
that ONLY the short mandatory paragraphs can be used within the PRA. The
paragraphs for the PRA are as attached with Section 3 – for example
paragraph 01 is the abbreviated version for the PRA with paragraph 1 being
the corresponding paragraph for the customer copy mortgage valuation.




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  SECTION 4               Reporting Requirements

Property Risk Assessment

Correct completion of the Property Risk Assessment [PRA] is essential to
allow appropriate underwriting functions.

In addition surveyors should be aware that text entry for the PRA
sections is limited and only the brief mandatory paragraphs 01 to 054
can be used.

PBS reference:             Currently eight digits as per instruction

Inspection date:           DD/MM/YYYY

Report date:               DD/MM/YYYY

Report type:               V – for physical inspection, to include mortgage
                           valuation, re-inspection, further advance or
                           revaluation.

                          E – for external appraisal – see revised guidance
                          for requirements.

Present Condition
Value:                     Complete in all instances.

                           New build property - Where             property   is
                           incomplete please insert zero.

                           Zero should also be inserted where matters
                           affecting lending have been highlighted and
                           where it is not possible to provide a current value
                           or until such time as appropriate reports have
                           been obtained.

Value after
improvements/
completion:                Only complete in the following instances :

                           New build property – for incomplete properties
                           the present condition value is zero. Please
                           complete value after improvements/completion.

                           Where matters affecting value is “Yes” please
                           enter value assuming completion of required
                           works to leave in acceptable state of repair.



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                          Where essential repairs is “Yes” please enter
                          value upon satisfactory completion of repairs.

                          Retentions will only normally be considered
                          where the difference between the 2 valuation
                          figures is greater than £5,000.

Matters affecting lending: Y or N

Comments –                Only mandatory paragraphs 01 to 023 may be
                          used in this section – see Section 3. Please note,
                          where advice is needed outside the scope of
                          these paragraphs, please use paragraph 09 and
                          complete as appropriate.

                          Minor or insignificant matters need not be
                          included in this section. Only matters which
                          would have a significant impact upon suitability
                          for lending or future saleability should be
                          reported.

                          Valuers should note the reporting requirements
                          for holiday let and HMO properties.

Essential repairs:        Y or N

Comments –                Minor or insignificant repairs need not be
                          included, although these may be appropriate for
                          inclusion in the customer copy, where considered
                          prudent.

                          Only the use of mandatory paragraphs 040 to 054
                          is allowed within the PRA – see Section 3.

                          Where repairs outside the scope of the paragraphs
                          are identified, please use paragraph 041 and
                          complete as appropriate.

Insurance Reinstatement
Cost:                   To be calculated in accordance with BCIS.

Rental Value [BTL only]: Monthly rental to be included based on six month
                         Assured Shorthold tenancy – please see additional
                         guidelines and lending criteria for further
                         information.

Property address:         As per instruction request. If the address is
                          incorrect please refer to Principality Surveyors for
                          guidance.


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Name of applicant(s):     As per instruction request.

Type of property:         H, B, F, M, O [House, bungalow, flat,
                          maisonettes, other]. Please note, for flats or
                          maisonettes the detachment type can be either P
                          or C [Purpose built or converted].

Detachment type:          D, S, E or M [Detached, semi-detached, end
                          terrace or mid terrace]. For flats or maisonettes,
                          P or C [Purpose built or converted].

Number of bedrooms:       Numeric

Number of living rooms:   Numeric

Number of bathrooms:      Numeric

Number of kitchens:       Numeric

Number of separate WCs: Numeric

Number of garages:        Numeric

Conservatory:             Yes or No

Number of parking
spaces:                   Numeric – this relates either to on-site or
                          dedicated off-site parking facilities.

Central heating and
type:                     E, O, G, SF, N (Electric, Oil, Gas, Solid Fuel or
                          None). All except none should be prefixed with
                          Part or Full (P or F).

Mains gas:                Yes or No

Mains electric:           Yes or No

Mains water:              Yes or No

Gross external floor area: Complete in m2

Is property new?:         Yes or No. Must be completed in all cases
Is property complete?:    Yes or No. Must be completed in all cases even
                          if the property is not new. No is only required
                          where property is new and not complete.

Age of property:          Please insert age of property, ie 80 years, and not
                          date of construction. This is an approximate
                          figure and appropriate assumptions may be made.

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Condition:                   Good, average or poor

Wall construction:           Free text. Please see guidance notes.

Roof construction:           Free text. Please see guidance notes.

Tenure:                      F, L or C (Freehold, leasehold or commonhold)

Unexpired lease:             Only complete if tenure is leasehold.

Garden included:             Yes or No

Land area more
than 1 acre:                 Numeric

Storeys in block (for flats
& maisonettes):             Numeric

Floor in block:              Numeric

Revaluation

For revaluation or further advance cases all sections of the PRA should be
completed – the mortgage valuation section can be left blank.

External Appraisal

For external appraisal instructions, please complete the following sections
of the PRA only:

PBS reference:               as previous guidance
Inspection date:             as previous guidance
Report date:                 as previous guidance
Report type:                 E
Present Condition Value:     amount
Matters affecting lending:   Y or N
Comments:                    Mandatory text only as per guidance
Insurance Reinstatement
Cost:                        Estimate as per guidance below
Rental Value [BTL only]:     Estimated figure on basis of unfurnished 6 month
AST
Property address:            As per instruction request
Name of Applicant(s):        As per instruction request

   This is not a "Drive by". The inspection should normally be carried out
    whilst standing outside of the boundary of the property on
    public/communal areas.



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   It is quite permissible to approach or telephone the occupier/applicant
    to confirm any relevant information, and to obtain permission to enter
    the garden but please do not enter the property internally, as this would
    extend the appraisal beyond its intended scope.

   You should retain site notes and relevant comparables.

   Assumptions

         Unless you have more specific knowledge or information is given in
         the instruction you are entitled to make the following assumptions

         1. That the tenure is freehold, except in the case of a flat where the
            tenure is leasehold with a minimum of 80 years unexpired on the
            lease.
         2. That all the main services are connected to the property.
         3. That the property is in a satisfactory condition internally.
         4. Vacant possession.

   Estimated Insurance : Estimated external floor area and insurance
    reinstatement value must be provided in accordance with the latest BCIS
    rebuilding cost tables. Appropriate assumptions should be made to
    provide an approximate guide only.

Re-inspection

For reinspection cases only the PRA should be completed. The mortgage
valuation sections can be left blank.

CUSTOMER COPY – MORTGAGE VALUATION

This report is completed for all cases in conjunction with the PRA. However
the report will not be disclosed to customers where the case is a
remortgage. Where the case is identified on Quest as a remortgage (RM)
the mortgage valuation section can be left blank. In due course a revised
stand-alone PRA will be issued.

Guidance and completion of the Principality Mortgage Valuation Report is
as follows:

Name of applicants:          As per instruction request

Reference:                   PBS reference – currently 8 digits – as per
                            instruction

Property address:            As per instruction

Post code:                   Please ensure correct post code is inserted.



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Date of inspection:       DD/MM/YYYY

Date of report:           DD/MM/YYYY

Property description:     Brief description of property, to include type and
                          age. Use of preferred text is recommended – see
                          Section 3.

Construction of walls     Brief description only – use of preferred text is
and roof:                 recommended.

Services:                 Brief description only, to include connections
                          available – preferred text available.

Valuation:                Preferred text available. The insurance valuation
                          should be provided using paragraph 146.

Legal considerations:     Any legal matters which should be brought to the
                          attention of the Society’s or purchaser’s
                          solicitors. Preferred text available.

General information:      Preferred text is available for completion of this
                          section.

                          The first paragraph should be one of the
                          preferred paragraphs outlining general overall
                          condition.

                          Any items listed within the PRA under “Matters
                          Affecting Lending” or essential repairs should
                          then be replicated in full, using the corresponding
                          full mandatory paragraph e.g 1 where 01 used in
                          the PRA, prefaced where appropriate by
                          paragraph 206.

                          Any additional relevant information can then be
                          inserted although the continued use of preferred
                          text is recommended.

Site Notes

Appropriate site note recordings should be made and retained together with
details of at least 3 comparables used in arriving at the valuation figure.

During audit, we may request that copies of these site notes be submitted
to us for scrutiny.

E-Mails and Correspondence

Any e-mails received relating to ongoing cases must be responded to within

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24 hours of receipt, even if the reply is merely that you are awaiting further
information to complete any outstanding matters on the case.

Buy to Let Valuation Instructions

The ‘Buy to Let’ valuation instructions will identify the instruction as a ‘Buy
to Let’ property and, where known, the anticipated rental figure.

Buy to Let Acceptability

The criteria for Buy to Let property is generally the same as for property
intended for owner-occupation.

Houses in multiple occupation will be considered, e.g. student let, but the
rental assessment must be based on a MAXIMUM OF 4 INDIVIDUAL
TENANTS on a shared assured shorthold tenancy. The valuer should also
be satisfied that the property stands in an area with strong continued
demand for this type of accommodation.

Please note that where a property is, or may in the future, be subject to the
HMO licencing provisions, this should be highlighted within the PRA. Please
use paragraph 011.

   The valuation basis is to be Market Value with vacant possession.

   Comparables – Principality expect comparable evidence for rentals to be
    as robust as those for Market Value. In this instance we would expect
    details to be held on file of similar properties and recent lettings.

   Valuation Discount / Cashbacks / Guaranteed Rents – Any form of pre
    or post sale incentive must be identified and taken into account in
    arriving at your valuation.

   Market Conditions – Valuers should make specific enquiries about the
    percentage of the Development currently sold, or expected to sell, to
    Buy to Let applicants and give consideration to the impact of this fact on
    the likely achievable rental.

Holiday Let

Principality will in some instances consider applications for Holiday Let
properties. Where the valuer believes that the property is used, or may in
the future be used for holiday let purposes, the following guidance should
be followed.

The rental figure should be provided based on a 6 month Assured Shorthold
Tenancy in all cases and any income relating to current or potential holiday
let should be excluded.



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The valuer should provide a specific comment within the PRA confirming
that the property, where applicable, stands in an area with sustainable
holiday let demand. Please use paragraph 017.

Homebuyer Report

Where a Homebuyer report has been requested, both the PRA and mortgage
valuation should still be completed.

        The Principality fee scale will apply. Instructions you receive may
         well include instructions to carry out a simultaneous Homebuyer
         Report. In this case, although the fee has been collected from the
         mortgage applicant by Principality, it is essential that you confirm
         Conditions of Engagement directly with the mortgage applicant
         when you receive instructions. The instruction will include the
         applicant’s current address and contact telephone number where
         available.

        You should not release the Homebuyer Report until signed Conditions
         of Engagement have been returned directly to you by the applicant.
         Principality normally expects Homebuyer Reports to be completed
         and forwarded to the mortgage applicant within 5 working days and
         the PRA and Mortgage Valuation Report to be returned directly to the
         Principality, within the normal Service Standard.

Building Surveys

Where a Building Survey report has been requested, both the PRA and
mortgage valuation should be completed.

        The Principality fee scale will apply. Instructions you receive may
         well include instructions to carry out a simultaneous Building Survey.
         In this case, although the fee has been collected from the mortgage
         applicant by Principality, it is essential that you confirm Conditions
         of Engagement directly with the mortgage applicant when you
         receive instructions. The instruction will include the applicant’s
         current address and contact telephone number where available.




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  SECTION 4                  General Requirements

All valuations undertaken on behalf of the Principality are required to
comply with the requirements of UK Appendix 3.2 RICS Mortgage Valuation
Specification of the RICS Appraisal and Valuation Standards.

In addition valuations of residential property for mortgage purposes shall be
in accordance with the RICS Specification for The Valuation and Inspection
of Residential Property for Mortgage Purposes.

The Financial Services Authority’s (FSA) guidance to building societies states
that ‘Valuers should have sufficient experience and expertise and should be
free from conflicts of interest.’

The role of the valuer, who must have knowledge of and experience in the
valuation of the residential property in the particular locality, is:

        to advise the Principality of the Market Value, usually excluding
         development value at the date of inspection;
        to advise the Principality as to the nature of the property and any
         factors likely to affect its value; and
        to provide an assessment of the property’s estimated current
         reinstatement cost in its present form (unless otherwise stated) for
         insurance purposes.

As the valuers role is limited to assessing the adequacy of the security,
valuers must neither accept instructions to make, nor volunteer
recommendations, as to the length of the term, or the amount to be
advanced, nor give advice as to whether the property is suitable for ‘second
mortgage purposes’.

In order to fulfill the instructions the valuer must inspect the property to be
valued.

Basis of Valuation

The Basis of Valuation is Market Value.

This is defined as:

‘The estimated amount for which a property should exchange, on the
date of valuation, between a willing buyer, and a willing seller, in an
arm’s-length transaction, after proper marketing wherein the parties
had each acted knowledgeably, prudently and without compulsion.’

This definition should be applied in accordance with the conceptual
framework set out in the RICS Appraisal and Valuation Standards, PS3.2.


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Unless otherwise instructed, any value for development that either has, or
requires, planning permission should be excluded from Market Value.

Relevant factors

Among the relevant factors that should be taken into account in the
valuation are:

    the tenure of the interest offered as security and, if known, the terms of
     any tenancies to which that interest is subject;
    the age, type, accommodation, siting, amenities, fixtures and features
     of the property and other significant environmental factors within the
     locality;
    and the apparent general state of and liability for repair, the
     construction and apparent major defects, liability to subsidence,
     flooding, and/or other risks. Particular care must be taken with non-
     traditional construction.

    New Build Property

    All valuers undertaking mortgage valuations for PBS on new build
    properties should have strong regard to second hand values. This is more
    likely to be the ‘true’ value in current market conditions and reduces the
    risk relating to undisclosed incentives/discounts.


The valuation of new build property should be undertaken with revised RICS
guidance as in effect from 1st September 2008 (Section 5.5.2). It is expected that the
valuer will obtain a copy of the CML Disclosure of Incentive form in each case – in
the event that the form is not obtained or made available, this should be reported
within the PRA and customer copy (use paragraph 022 or 023 for the PRA and put
Y in Matters affecting lending).

Regard must be given to the effect of any incentives in the context of the overall
consideration for the property. Valuers should remember that valuations for secured
lending on residential property are provided to lenders to assist in the assessment of
loans secured on property and that incentives may not be repeated in a resale.
Therefore, care must be given to the assessment of the weight that should be
attached to a notified sale price as evidence of Market Value.

Developers may offer incentives on new properties, and occasionally on non new-
build property, in order to achieve quicker sales and give the appearance of high sale
prices. Incentives may take many forms and may include: payment of legal and
surveying fees; reimbursement of the deposit on signing contracts; guaranteed rents
for a number of years; discounts/reductions if more than one property is acquired;
purchase of the buyer’s existing property; payment of the mortgage for a specified
period; high level material gifts, for example, a new car, cash backs after completion,
furnishings and electrical goods and so on. This list is not exhaustive.



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The valuer will need to distinguish between incentives that are property related, but
have little impact on value, and incentives that have a greater impact, to the extent
that the price would be significantly lower if they were not available.

The valuer will have regard to incentives in arriving at the valuation on the defined
basis but will not reflect them purely as an arithmetical exercise starting with the
notified sale price or a selected comparable. The valuer must exercise professional
judgement in the light of all the information and evidence that is available.

The true value of a property will be used when assessing the maximum amount that
can be borrowed. Some builders (new properties) or other vendors (older properties)
will offer cash or “deposit paid” incentives. However, Principality Surveyors and our
panel valuers will normally be expected to value the property ‘net’ of the incentive in
accordance with RICS standards. The value of the property ‘net’ of incentive will be
used to calculate the loan to value ratio.

  General Principles

          Read the Mortgage Valuation Specification at Appendix 3.2 in the
           Red Book and in particular Section 5.5 Treatment of Incentives.
          Ensure that good comparable evidence is obtained and recorded in
           order that a clear methodology can be referred to if the valuation is
           challenged at a later date.
          Value new build property as if it had been occupied but vacated in a
           good condition.
          Principality considers new build to be anything that has not been
           occupied for two years from date of completion of construction,
           conversion or refurbishment.
          Treat each case on its individual merits.
          Ignore the new build premium.
          Use comparables from the second hand market.


Choice of Valuers and Assessment of Competence

The valuation requirements of the Principality are managed by Principality
Surveyors.

Principality Surveyors are expressly prohibited from valuing properties
where the Principality is mortgagee in possession, and where the vendor is a
director or employee of the Principality or any of its subsidiaries.

Where valuation instructions cannot be undertaken by Principality
Surveyors, instructions will be panelled to a member firm of the approved
Principality Valuation Panel. The requirements and standards for these
valuations are provided to each member of the valuation panel.

The requirements for membership of this panel are regularly reviewed by
the Professional Services Manager and any changes to the requirements will
be communicated to all parties.

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All valuations must be undertaken by a qualified member of RICS (M/FRICS)
with a normal requirement for a minimum of 2 years post qualification
experience. Applications for valuations to be undertaken by Technical
Members of RICS (TechRICS) may be considered but only where the
individual is a member of a larger firm with approved quality and training
systems in place. The TechRICS qualification must be specific to Survey and
Valuation and the requirement for 2 years post qualification experience
remains.

No valuations may be undertaken by a TechRICS surveyor without formal
written approval from the Professional Services Manager.

The Valuation Panel is constructed on a postcode basis. Valuers must
confirm that they hold PII cover to a minimum level of £1,000,000 for each
and every claim, together with "run off" cover, where appropriate. The
terms of the PII must exceed the minimum criteria as determined by RICS.

  Where the applicant elects to have a Home Buyers Report the Valuer will
complete a PRA and mortgage valuation for the Principality. The Home
Buyers Report is prepared for the applicant and the surveyor is responsible
for agreeing the terms for the Home Buyer Report directly with the
applicant. Similar arrangements apply in the event that the applicant elects
to instruct a Building Survey.

Surveyors may not have any interest, financial or otherwise, in the property
being valued, or any associated transaction, including arranging the
mortgage or any insurance policy.

Post Valuation/Audit Process

Principality Surveyors are responsible for the audit and quality control of all
valuations undertaken on behalf of the Principality.

Please note that if further comment/advice is required, the Panel Company
agrees to accept periodic correspondence relating to the work undertaken
at no additional cost.

        You must retain comparable evidence on file.               In normal
         circumstances, we would expect a minimum of three comparables.
         Such a comparable is a property that has been recently sold or let. It
         is not an asking price or Letting/Estate Agents opinion. When
         internal databases are used, only actual sales will be considered
         acceptable and should be stated as such. There must be an ability to
         identify accommodation etc. and we would not expect comparables
         to be in excess of six months of age without detailed explanation.

        The Valuer will comply with valuation audit requirements, and
         produce whatever file documentation is requested.       Where


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         comparables are requested for audit purposes, an accompanying
         comment/explanation may be necessary, where the comparables
         have been adapted to arrive at the valuation figure.

        Valuers will be expected to assist in the resolution of
         customer/branch/intermediary queries and complaints. Remember
         the Principality is your Client.              Any complaints from
         borrowers/applicants should initially be referred to Principality
         Surveyors for resolution or further guidance.




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  SECTION 6               Principality Property Lending Criteria

Overview

Principality Building Society will only lend on residential property in
England and Wales and subject to the following criteria:

        The property offered as security must be readily saleable –
         buyers/lenders should not be deterred by any factors which may
         have an adverse effect on future saleability to include location
         (e.g. next to a filling station) or other factors (e.g. above a
         takeaway restaurant).

        The property must be readily mortgageable – in the event of
         borrower default, any future potential buyer will be able to obtain
         mortgage funding without difficulty.

To meet these requirements, the property must be:

        Of a construction type acceptable to most buyers, lenders and
         insurers, and

        In a satisfactory state of repair with no significant outstanding
         defects which may cause deterioration to the suitability of the
         property as security

In all cases where the valuer is uncertain, the case should be referred to the
Professional Services Manager for clarification of policy.

In addition, the following are unacceptable:

        farms subject to the Agricultural Holdings Act.
        properties subject to a flying freehold unless the area affected by the
         flying freehold is less than 25%.

Buy to Let Valuation Instructions

The ‘Buy to Let’ valuation instructions will identify the instruction as a ‘Buy
to Let’ property and, where known, the anticipated rental figure.

Buy to Let Acceptability

The criteria for Buy to Let property is generally the same as for property
intended for owner-occupation.

Houses in multiple occupation will be considered, e.g. student let, but the
rental assessment must be based on a MAXIMUM OF 4 INDIVIDUAL
TENANTS on a shared assured shorthold tenancy. The valuer should also


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be satisfied that the property stands in an area with strong continued
demand for this type of accommodation.

Please note that where a property is, or may in the future, be subject to the
HMO licencing provisions, this should be highlighted within the Mortgage
Valuation.

   The valuation basis is to be Market Value with vacant possession.

   Comparables – Principality expect comparable evidence for rentals to be
    as robust as those for Market Value. In this instance we would expect
    details to be held on file of similar properties and recent lettings.

   Valuation Discount / Cashbacks / Guaranteed Rents – Any form of pre
    or post sale incentive must be identified and taken into account in
    arriving at your valuation.

   Market Conditions – Valuers should make specific enquiries about the
    percentage of the Development currently sold, or expected to sell, to
    Buy to Let applicants and give consideration to the impact of this fact on
    the likely achievable rental.

   There is a misconception that properties may be acceptable for Buy to
    Let purposes when the Surveyor would decline for prime/standard
    lending. This is NOT the case, and if the property is not considered
    suitable for prime lending, it should not be recommended for Buy to Let.

Holiday Let

Principality will in some instances consider applications for Holiday Let
properties. Where the valuer believes that the property is used, or may in
the future be used for holiday let purposes, the following should be
followed.

The rental figure should be provided based on a 6 month Assured Shorthold
Tenancy and any income relating to current or potential holiday let should
be excluded.

The valuer should provide a specific comment within the PRA confirming
that the property, where applicable, stands in an area with sustainable
holiday let demand.

Summary of Acceptable Construction Types

Traditional solid masonry and cavity construction including stone, brick and
block.

Modern softwood timber frame built since 1965 (see guidance for
information on cavity fill and cladding types)


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Some system built houses – see detailed guidance

Some older steel framed houses – please note that in all such cases a
Structural Engineer’s report is required. This report should not exclude
inspection of cavities. BRE guidelines require inspection of sample
locations within the structure.

Large Panel System houses (LPS), subject to a Structural Engineer’s report
and the valuer being satisfied about future saleability prospects.

Summary of Unacceptable Construction Types

System built properties designated as defective.

Repaired former designated defective systems which either:

         (a)      were not repaired to a PRC licensed scheme, or
         (b)      adjoin an unrepaired dwelling.

Single skin timber or steel constructions – see detailed guidance for
exceptions including period design and character, subject to a Structural
Engineer’s report.

Large panel system flats.

Local authority flats in buildings over 4 storeys high.

Detailed Guidance

Acceptable Construction Types

The following provides more detailed guidance for assessing whether or not
a property complies with Principality Building Society lending criteria.

Traditional construction using traditional materials

Traditional constructions are considered to be:

        Solid wall construction - of predominantly brick or stone construction
         with typical thicknesses ranging from 225mm to 600mm.

        Cavity wall construction – of typically brick or block construction
         incorporating a cavity within their thickness.

Traditional materials are defined as:

        For walls – brick, natural stone, reconstituted stone, concrete blocks,
         cob or flint.


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        For pitched roofs – timber frame construction covered by either
         slates, tiles, manmade slates, thatch or lead/copper/zinc.

        For flat roofs – copper, lead, zinc, asphalt, mineralised felt or
         fibreglass.

Modern flats – frame and clad

Modern flats of a column and beam concrete or substantial steel structural
frame type clad externally in brick or block.

These will normally be good quality residential developments for private
occupation and built by an established and recognised developer.

Local authority built flats in a building over 4 storeys high will not be
acceptable even if the construction complies with our criteria.

Hardwood timber framed period houses

These will usually date from approximately 1300 to 1800 and are built from
substantially sized framing such as oak or elm with the sections between
infilled with brick or wattle and daub.

Modern softwood timber framed houses and flats

These would normally have been constructed after 1965 and to be
acceptable will be clad externally with either brick, reconstituted stone or
rendered blockwork.

In the cases the timber frame is the structural support for the building and
is protected from the elements by external cladding. Insulation will
normally be built integral to the frame during the course of construction
with a cavity existing between the frame and cladding. It should be noted
that in instances where cavity insulation has been provided after
construction this would make the construction unacceptable to Principality.

Softwood timber framed houses of period design and character

These would normally acceptable subject to satisfactory valuer comments
on future saleability and demand. A satisfactory structural engineer’s
report should also be requested prior to lending.

These houses will normally have been built in the 1800s and this category
does not include houses or bungalow built between 1930s and 1950s, which
are specifically excluded from this policy.

In this form of construction the structural frame is normally concealed from
view by external cladding such as weatherboarding.



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In view of the potential of defects to concealed areas, for this type to be
acceptable we will require a satisfactory report from a structural engineer
before lending. This report must confirm that parts of the cladding have
been removed to determine the likely condition of the structural frame.

Cross wall construction using traditional materials

These were usually built in the 1960s and 1970s.

In these cases the parallel sides are the main structural walls with
lightweight panels forming front and rear panels. The cross walls may be
built in large concrete panels, in which case the policy for large panel
systems overrides this policy statement.

Poured concrete systems

Certain named poured concrete systems are acceptable.

Concrete is poured on site (in situ) into shuttering, which is then removed
when the concrete is set. Typically these properties will have been built for
local authority occupation in or around 1950. The acceptable types are :-

        No Fines – Wimpey or Scottish Housing Association type – a concrete
         construction with fine aggregate in the concrete mix.
        Laing Easiform. If built in 1945 – a concrete system with horizontally
         placed reinforcement.
        Mowlem

Lightweight steel frames – brick, reconstituted stone or rendered block
external cladding
Privately built houses / bungalows (flats / maisonettes are not acceptable)
of a lightweight steel frame type with a brick, reconstituted stone or
rendered block external cladding. For further information see unacceptable
construction, steel framed local authority flats / houses of prefabricated
external appearance in this document. Additional policy requirements are
:-

        Satisfactory report from a structural engineer prior to lending.
         Engineer must follow building research establishment inspection
         guidelines for this type of construction. These guidelines require the
         engineer to inspect some of the hidden steel.
        Satisfactory comment on saleability from valuer.

Modern Methods of Construction (MMC)

There is an increasing trend within the industry for alterative forms of
construction, a number of which may be fabricated off site. These will
include steel construction, currently used by a number of national
developers, to include the Redrow Debut range.


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Subject to satisfactory valuers comments regarding future saleability
properties of this type would normally be acceptable although each
development will be assessed on a case by case basis.

Appropriate warranties should be available.

Large Panel System houses

Large panel system houses (not flats) are normally acceptable subject to :-

        Satisfactory report from a structural engineer.
        Satisfactory comment on saleability from the surveyor / valuer.

In these cases large, factory produced, reinforced concrete panels are
craned into position on site. Generally large panel systems were utilized by
local authorities and housing associations in the 1950s and 1970s.

A separate policy statement exists for Woolaway bungalows of individual
construction.

Ex Prefabricated Reinforced Concrete houses (PRC)

Where the walls have been totally rebuilt in traditional materials and where
PRC Homes Limited have issued a guarantee and where any adjoining houses
have been improved to the same standard then these will be normally
acceptable to lending.

In these instances the concrete components were factory produced. The
concrete is reinforced with steel which in many cases has started to
corrode, leading to structural disintegration. As a result various types were
designated as being defective under the Housing Defects Act 1985. In many
cases grant aid has been made available to house owners to rebuild the
walls.

High alumina cement

These properties may be considered for lending providing the construction :-

        Is no more than four storeys in height.
        Does not include commercial premises within the structural block.

For properties with high alumina cement content in structural blocks of over
four storeys high (this assumes the block is not of local authority
construction) or with integral commercial premises, a satisfactory structural
engineer’s report is required before lending. For further information see
unacceptable property types, local authority flats / housing association flats
or maisonettes in blocks over four storeys in this document.



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HAC is more likely to have been used in construction of flat blocks from
1960 to 1974. The valuer will not be able to assess that HAC has been used
to mere superficial inspection of the building.

Pre 1950 concrete constructed properties in Cornwall

For these properties to be acceptable the following applies :-

        A suitable mundic report has been obtained.
        This report must be approved in writing by the instructed surveyor /
         valuer as being suitable for PBS lending purposes.

A suitable mundic report is defined as a report from a suitably experienced
chartered surveyor, chartered structural engineer or chartered architect,
who should confirm that his report is entirely in accordance with the RICS
mundic guidance note. The person carrying out the report should be
required to acknowledge that PBS and its borrower can rely upon the
contents of the report. A new report will be required if the mundic surveyor
/ engineer / architect is not prepared to confirm the previous report is
acceptable or the previous report is over 6 years old. To be acceptable the
concrete will need to be classified as concrete Class A or Class A/B.

It should be noted that for certain post codes, namely PL12, 13, 14, 15,
17, 18, 22 and 23, mundic reports are required for pre-1960 properties
and not 1950, as outlined above.

Pre 1950 concrete construction in parts of Devon

Pre 1950 concrete construction in parts of Devon, where the valuer has
recommended a mundic report will be considered for lending, subject to a
satisfactory mundic report as outlined above.

Asbestos

Properties that contain asbestos can be classed as acceptable, providing
that :-

        The property is not made of load-bearing asbestos panels.
        The valuer does not mention anything adverse with respect to the
         asbestos element (i.e. it is not breaking down or damaged), or
        the valuer does not comment adversely on the market reaction in
         respect of asbestos.

Note: Caution should be applied to properties containing an element of
asbestos that were built around the 1930s, as the asbestos may well have
deteriorated, or its may existence may well be adverse to the resale of the
property.




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Asbestos was used widely throughout house construction, eg in ceiling artex,
insulation cladding, decoration board finishes, roof slates etc. Providing
that the above points have been taken into consideration and complied with
then the property can be considered acceptable.

Unacceptable Construction Types

Timber or metal framed buildings

Timber or metal framed buildings where the cavity between frame and
cladding has been filled with an insulation material will be unacceptable.

Pre 1965 softwood timber framed construction

Pre 1965 softwood timber framed construction lacking special merit on
saleability – for example mid-war bungalows or thin walled local authority
timber framed houses. Well known named types such as Colt or Guildway
will be considered on the individual merit of the property and advice should
be obtained from the Professional Services Manager before lending.

Steel framed local authority flats/houses of prefabricated external
appearance

Steel framed local authority flats and house of prefabricated external
appearance will not be acceptable. A common type – BISF (British Iron and
Steel Federation) is not acceptable whether re-clad in more sympathetic
materials or not. Steel framed flats of lightweight steel construction are
not acceptable, even with traditional external appearance.

Concrete walls built in Cornwall and Devon before 1950

Concrete walls built in Cornwall and Devon before 1950 (1960 for some post
codes – see previously) where a test of the concrete has classified the
concrete in either Class B or Class C will be unacceptable. For further
information please see previous comments.

Unrepaired PRC houses

Unrepaired prefabricated reinforced concrete construction properties will
be unacceptable – whether designated as defective under the Housing
Defects Act or not.

PRC flats (whether repaired or not)

As PRC houses above.

Flats or maisonettes of Large Panel System type

Flats or maisonettes of large panel system types are not acceptable.


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Laing Easifom properties

Laing Easiform properties built before 1945 are not considered acceptable.

Asbestos and Gypsum plaster

Load bearing panels or asbestos or gypsum plaster construction will render
the property unsuitable for lending.

Local authority/housing association flats or maisonettes in blocks over 4
storeys

Flats or maisonettes in local authority or housing association multi-storey
tower blocks of over four storeys will be unacceptable. If flats or
maisonettes contain two or more floors, each floor should be considered as
one storey, eg two two-floored flats / maisonettes will be counted as four
storeys. The following explanation was given at the request of the Council
of Mortgage Lenders:-

“General unwillingness to live in the environment presented by high rise
council flats causes a limited demand for these properties and difficulties
often occur with making resales”

In addition, there has been recent publicity with regard to high maintenance
charges for occupiers of these buildings.

Properties with time restrictions on occupancy

Properties with time restrictions on occupancy, e.g 11 month occupation are
not normally considered suitable security. However they may be considered
in holiday let cases and the appropriate paragraph should be used within the
PRA and a value provided.

Farms/smallholdings

Small farms or smallholdings with land appropriate for leisure use will be
considered for lending.       Properties with land currently subject to
agricultural use will be considered unacceptable, although these cases
should be referred to the Professional Services Manager for further advice.




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Glossary of common construction names

Airey
Description: PRC house type – designated defective
Policy:      Unrepaired – not acceptable
             Repaired – acceptable subject to guidelines outlined previously

Ayreshire County Council (Lindsey)
Description: PRC house type – designated defective
Policy:      As for Airey

Bellrock
Description: Load bearing gypsum plaster panels
Policy:      Not acceptable

Blackburn - Orlit
Description: PRC house type – designated defective
Policy:      As for Airey

British Iron and Steel federation (BISF)
Description: Steel frame type
Policy:       Not acceptable

Boot
Description: PRC house type – designated defective
Policy:      As for Airey

Border Oak Homes
Description: Oak frame with rendered infill panels
Policy:      Acceptable subject to suitable warranty and valuer comments
             on saleability

Boswell
Description: PRC house type – designated defective
Policy:      As for Airey

Bryant/Bryant Cross Wall frame
Policy:      Acceptable subject to satisfactory Structural Engineer’s report
             and valuer comments on future saleability
Butterley
Description: PRC house type – designated defective
Policy:      As for Airey

Colt
Description: Timber frame commonly with shingles or cedar wood cladding
Policy:      Only acceptable subject to valuer comments on condition and
             saleability




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Cornish Unit
Description: PRC house type – designated defective
Policy:      As for Airey

Dorlonco
Description: Steel frame
Policy:      Acceptable subject to satisfactory Structural Engineer’s report
             and valuer comments on future saleability
Dorran
Description: PRC house type – designated defective
Policy:      As for Airey

Elliott
Description: Elliott Durabrick Modular
Policy:      Acceptable subject to       chartered   engineer   approval   of
             structural design

Gregory
Description: PRC house type – designated defective
Policy:      As for Airey

Guildway
Description: Timber framed type
Policy:      As for Colt

Hawksley
Description: PRC house type – designated defective
Policy:      As for Airey

Jesperson
Description: Large concrete panel building system
Policy:      Flat – not acceptable
             House - acceptable subject to satisfactory Structural
             Engineer’s report and valuer comments on future saleability

Laing Easiform
Description: Poured concrete system
Policy:      Acceptable if built after 1945

Levitt Cartwright
Description: Steel frame type (can have a concrete frame) generally clad
             with precast concrete units
Policy:      Acceptable subject to satisfactory Structural Engineer’s report
             and valuer comments on future saleability

Lilleshall
Description: PRC type
Policy:      As for Airey



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Mowlem
Description: Poured concrete system
Policy:      Acceptable

Myton
Description: PRC house type – designated defective
Policy:            As for Airey

Myton-Clyde
Description: PRC house type – designated defective
Policy:      As for Airey

Newland
Description: PRC house type – designated defective
Policy:      As for Airey

Orlit
Description: PRC house type – designated defective
Policy:      As for Airey

Parkinson
Description: PRC house type – designated defective
Policy:      As for Airey

Potton
Description: Post and aisle timber construction
Policy:      Acceptable

Reema Conclad
Description: Large Panel System
Policy:      Acceptable subject to satisfactory Structural Engineer’s report
             and valuer comments on future saleability (Houses only – flats
             are not acceptable)

Reema Hollow Panel
Description: PRC house type – designated defective
Policy:      As for Airey

Scottwood
Description: Local Authority timber frame
Policy:      Not acceptable

Schindler
Description: PRC house type – designated defective
Policy:      As for Airey

Smith
Description: PRC house type – designated defective
Policy:      As for Airey


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Space 4 (Westbury)
Description: Factory foam injected timber frame
Policy:      Acceptable

Spooner
Description: Timber frame
Policy:      Not acceptable

Stent
Description: PRC house type – designated defective
Policy:      As for Airey

Stonecrete
Description: PRC house type – designated defective
Policy:      As for Airey

Sure Build
Description: Steel frame
Policy:      Acceptable subject to previous guidance

Swedish
Description: Local Authority timber frame
Policy:      Not acceptable

Tarran
Description: PRC house type – designated defective
Policy:            As for Airey

Tarran-Clyde
Description: PRC house type – designated defective
Policy:      As for Airey

Tee Beam
Description: PRC house type – designated defective
Policy:      As for Airey

Thorncliffe
Description: Cast Iron structural panels
Policy:      Not acceptable

Trusteel
Description: Steel framed
Policy:      Acceptable if traditionally clad and subject to satisfactory
             Structural Engineer’s report and valuer comments on future
             saleability

Underdown
Description: PRC house type – designated defective
Policy:      As for Airey


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Unity
Description: PRC house type – designated defective
Policy:      As for Airey

Unitroy
Description: PRC house type – designated defective
Policy:      As for Airey

Waller
Description: PRC house type – designated defective
Policy:      As for Airey

Wates
Description: PRC house type – designated defective
Policy:      As for Airey

Wessex
Description: PRC house type – designated defective
Policy:      As for Airey

Whitson-Fairhurst
Description: PRC house type – designated defective
Policy:      As for Airey

Wimpey No Fines
Description: Poured concrete type
Policy:      Acceptable

Winget
Description: PRC house type – designated defective
Policy:      As for Airey

Woolaway
Description: PRC house type – designated defective
Policy:      As for Airey

Woolaway Bungalow

Description: Usually individually built – concrete panel type
Policy:      Acceptable subject to valuer comments on condition and
             saleability




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  SECTION 7                   Mandatory and Preferred Text

Mandatory Paragraphs for PRA

Matters Affecting Lending

=1 [*]            The property is unsuitable for lending due to <identify>.

=01 [*]           Unsuitable <text>.

                  Required text – brief description of reason for decline – eg
                  construction, location, outside lending criteria. Sufficient to
                  allow underwriter to understand reasoning. No valuation to be
                  provided.

=2 [*]            In its present condition the property is unfit for letting.

=02 [*]           Unsuitable for letting.

                  No further detail required

=3 [*]            There are only <text> years remaining on the lease. The
                  property is not suitable for lending unless the term can be
                  extended or the freehold acquired.

=03 [*]           Short lease <text>.

                  No further detail required

=4 [*]            There is structural movement in the form of <text>. A report
                  should be obtained from a Structural Engineer or Chartered
                  Building Surveyor identifying the cause together with the costs
                  of the work necessary to ensure future stability. No valuation
                  can be provided until this report has been seen.

=04 [*]           Movement <text>.

                  Required text – brief note of location/concern – use where
                  movement cannot be confirmed as longstanding and valuation
                  cannot be provided without reports.

=5 [*]            There is structural movement <identify> which may be
                  continuing. There is a current insurance claim. No valuation
                  can be given until further details are provided.

=05 [*]           Movement - insurance claim.




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                  No further detail – use where movement previously identified
                  and subject to ongoing monitoring/insurance claim.

=6 [*]            The property is of a type designated defective. No valuation
                  can be provided until details of an approved repair scheme are
                  provided.

=06 [*]           Defective construction <text>.

                  Provide system name/type if known

=7 [*]            There are signs of serious rot and repairs may prove expensive.
                  A specialist timber contractor, preferably BWPDA registered,
                  should check all timbers and provide details on the required
                  remedial works together with an estimate of the costs.

=07 [*]           Rot

                  No further detail required – use where concern regarding
                  presence/ extent of serious timber decay and where valuation
                  cannot be provided without further investigation.

=8 [*]            The property is of <text> construction. A report should be
                  obtained from a Structural Engineer or Chartered Building
                  Surveyor confirming that concealed parts of the structure are
                  free from defect. No valuation can be given until further
                  details are provided.

=08 [*]           Construction <text>.

                  Required text – type/system – use where construction meets
                  lending criteria subject to satisfactory report.

=9 [*]            The property is <text>. Please refer to valuer.

=09 [*]           Refer <text>.

                  Use where significant issue found which will impact on decision
                  to lend and not covered elsewhere.

=10 [*]           The property is in multiple occupation. The property should be
                  reinstated as a single dwelling to include <text>.

=010 [*]          Multiple occupancy.

                  No further detail required

=11 [*]           The property may at some point be subject to the licensing
                  requirements for Houses in Multiple Occupation (HMO’s).


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=011 [*]          HMO

                  Use where property may be subject to HMO requirements.

=12 [*]           Saleability may be affected by health uncertainties relating to
                  the proximity of [A] electrical sub-stations\, [B] overhead
                  cables\, [C] <text>[-].

=012 [*]          Health <text>.

                  Use to identify significant impact from EMF or other.

=13 [*]           Obtain a mining report from the [A] Coal [B] Tin [-]Authority to
                  provide information as to historical and future mining activity.


=013 [*]          Mining.

                  No further detail required – only use if concerns regarding
                  impact on value/saleability. Do not use for routine mining
                  reports.

=14 [*]           The property lies within the Cheshire Brine Extraction area and
                  appropriate reports should be obtained.

=014 [*]          Brine.

                  Use if report required to confirm decision to lend.

=15 [*]           The property is [A] on a flood plain, [B] near to a watercourse,
                  [C] and it has been flooded in the past. [D] although we are
                  unaware of any flooding.

=015 [*]          Flooding risk.

                  Use where known or potential flooding risk requiring further
                  investigation prior to lending decision.

=16 [*]           Some properties in the area have been identified as being
                  affected by radon gas emissions. Further advice can be
                  obtained from the National Radiological Protection Board.

=016 [*]          Radon

                  Use where further investigation recommended.

=17 [*]           The property [A] appears to be\, [B] may be\, [C]used for
                  holiday let purposes although the rental figure provided is on
                  the basis of an unfurnished 6 month Assured Shorthold
                  Tenancy. [D] The property is considered suitable for continued

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                  use on this basis and stands in an area of reasonable holiday let
                  demand. [D] The property does not stand in an area considered
                  suitable for continued holiday let use.

=017 [*]          Holiday let <text>.

                  Refer to lending guidance – provide 6 month AST rental only.
                  Required text - <acceptable> for areas with ongoing holiday let
                  demand and property suitable, <unacceptable> for areas with
                  no established holiday let demand or property unsuitable.

=18 [*]           The property may be affected by [A] a private road. [B] an
                  unadopted road.

=018 [*]          Road <text>.

                  Required text – <private> or <unadopted> where concerns
                  regarding access/legal rights and further enquiries required.

=19 [*]           The property has been subject to past structural repairs and it
                  is assumed appropriate guarantees and certificates are
                  available.

=019 [*]          Structural warranties.

                  Use where past structural repairs undertaken.

=20 [*]           The property was originally of non-traditional construction but
                  appears to have been refurbished. It is assumed appropriate
                  guarantees and certificates are available.

=020 [*]          Repaired construction.

                  Use where previous defective          dwelling    required   and
                  warranties/ certificates required.

=21 [*]           The property is subject to restrictions on occupancy comprising
                  <text>. This is reflected in the valuation but may limit future
                  saleability. [A] This property should only be considered within
                  the context of a specialist holiday let application.

=021 [*]          Occupancy restriction <text>.

                  Use where S106 or other restrictions may apply.

=22 [*]           Sales incentives of <text> have been disclosed on this sale and
                  should be confirmed in accordance with the CML Handbook.
                  The effect of these on the selling price has been taken into
                  account in the valuation


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=022 [*]          Sales incentive <text>.

                  Use where CML disclosure of incentives form obtained and
                  reveals incentives

=23 [*]           No information regarding disclosed sales incentives was
                  available at the time of inspection, and the valuation is based
                  on the understanding that no sales incentives are offered on
                  this property. This should be confirmed by the lenders legal
                  adviser in accordance with the CML Handbook.

=023 [*]          No incentive disclosure provided

=24 [*]           The Disclosure of Incentives Form reveals that no incentives
                  have been recorded as being included in the sale. This should
                  be confirmed by the lenders legal adviser in accordance with
                  the CML Handbook

=024 [*]          No incentive disclosure on form

=25 [*]           We are advised that the property is being purchased subject to
                  a shared equity scheme <text for percentage split>. Our
                  valuation represents 100% of the interest.

=025 [*]          Shared equity



Essential Repairs

=40 [*]           There is evidence of cavity wall tie failure and further
                  investigation is required together with necessary repairs.

=040 [*]          Wall ties

                  Use where further investigation required.

=41 [*]           Defective <text> to the <text> requires repair or replacement.

=041 [*]          Defect <text>.

                  Use to cover items not covered elsewhere but are considered
                  significant.

=42 [*]           The <text> roof coverings require [A] significant repair. [B]
                  complete renewal.

=042 [*]          Roof <text>

                  Required text – <repair> or <renewal>.

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=43 [*]           The party [A] wall [B] walls [C]to the roof space [D] is
                  incomplete and\, [E] are incomplete and\, [F] requires
                  upgrading. [G] require upgrading.

=043 [*]          Party wall <text>.

                  Use if significant fire/security risk in roof space. Possible text
                  – <provide>, <upgrade>

=44 [*]           Rainwater goods require repair or replacement.

=044 [*]          Rainwater.

                  Use if significant defects beyond routine maintenance.

=45 [*]           The chimney [A] stack [B] stacks [C] require\, [D] requires\,
                  [E]<text>.

=045 [*]          Chimney <text>.

                  Required text – <dangerouse>, <rebuild>, <repair>.

=46 [*}           [-]There is evidence of dampness to <text> [A] together with
                  possible defects to adjacent timbers[-]. A BWPDA registered
                  damp and timber treatment contractor should investigate the
                  full extent and cost of necessary works.

=046 [*]          Damp.

                  No further detail required – use where specialist reports
                  required.

=47 [*]           The <text> [A] floor is [B] floors are [-]<text>[-] and further
                  investigation is required together with all necessary repairs.

=047 [*]          Floor <text>.

                  Use where concerns regarding stability/condition of floors.
                  Required text – <repair>, <replace> or <investigate>.

=48 [*]           Sub-floor ventilation is inadequate and upgrading is required.

=048 [*]          Floor vent

                  No further detail required – use where upgrading of sub-floor
                  ventilation required.

=49 [*]           There is evidence of [A] penetrating dampness\, [B]
                  condensation\, [-] to <text>. [-]Further investigation is

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                  required together      with   appropriate    remedial    measures
                  including <text>.

=049 [*]          Damp <text>.

                  Use where significant defects noted.        Required text –
                  <penetrating>, <condensation>, <investigate>.

=50 [*]           [A] Chimney breasts [B] Internal walls [-] have been removed
                  and remaining sections [C] may be\, [D] are\, [-] inadequately
                  supported. Opening up and further investigation is required
                  together with an estimate of costs for required works to ensure
                  long term stability.

=050 [*]          Alterations <text>.

                  Use where structural alterations undertaken and possible
                  concerns regarding standard – required text – <unsupported
                  chimney>, <chimney – further investigation>, <wall – further
                  investigation>, <confirm consents>

=51 [*]           Aspects of the services to include <text> [A] give cause for
                  concern [B] are defective [-] and specialist advice is required
                  from a [C] NICEIC registered electrician [D] CORGI registered
                  installer [E] specialist engineer or contractor.

=051 [*]          Services <text>.

                  Use where areas of concern identified – required text
                  <electrics>, <gas>, <oil>, <water>, <heating>, <test>,
                  <dangerous>

=52 [*]           <Text> may contain asbestos material which could be
                  hazardous. Further advice is required from a licensed specialist
                  together with proposals and estimates for appropriate
                  remediation.

=052 [*]          Asbestos <text>.

                  Use where suspected asbestos and potential impact on
                  health/value – required text <location>

=53 [*]           Areas requiring further investigation and attention include, for
                  example, [A] roof coverings\, [B] chimneys\, [C] rainwater
                  goods\, [D] external joinery\, [E] main walls\, [F] internal
                  floors\, [G] internal walls\, [H] ceilings\, [I] all services\, [J]
                  drainage installations\, [K] roof structure\, [L] external
                  structures\, [M] apparent dampness\, [N] internal timber
                  defects\, [-]. This information is given as a guide only and all
                  areas of the property should be investigated.

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=053 [*]          Investigate <text>.

                  Use where further investigation required for items not covered
                  elsewhere. For general repairs and maintenance no comment
                  required – cover in customer mortgage valuation only.

=54 [*]           Aspects of the service installations give cause for concern to
                  include <text>. Further investigation is recommended.

=054 [*]          Services <text>.

                  Use for concerns not covered elsewhere

Preferred Paragraphs – Mortgage Valuation

Property description

=80 [*]           The property comprises a <text> believed to be around <text>
                  years of age and situated within [A] an established residential
                  area\ [B] a mixed area of residential and commercial property\
                  [C] a secondary residential area\ [D] a rural area\ [E] a village
                  location\ [F] an isolated and remote position\ [G] <text>\ [-].

=81 [*]           The property is on a new development by <text>.

=82 [*]           The property is close to <text>.

=83 [*]           The property is in a <text>.

Construction

=100 [*]          The property appears to be of [A] non\ traditional construction
                  with <text> walls and a [B] sloping\ [C] flat\ [D]<text>\ covered
                  roof.

=101 [*]          There are also areas of <text> construction with <text> roof(s).

=102 [*]          The <text> has a <text> roof.

Services

=120 [*]          The property appears to benefit from mains <text> service
                  connections. This should be confirmed.

=121 [*]          The property is believed connected to a private <text>.
                  Further investigation is recommended.

Valuation


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=140 [*]          In its present condition and with the current state of the
                  property market, our valuation for mortgage purposes is
                  £<text>.

=141 [*]          In its present condition, we are unable to provide a valuation
                  figure.

=142 [*]          Our valuation of the property completed to a satisfactory
                  standard and complying with any required approvals is £<text>.

=143 [*]          Our valuation of the property once all required repair and
                  improvement works have been carried to a satisfactory
                  standard is £<text>.

=144 [*]          The property is newly constructed and the valuation provided
                  is on the special assumption that this is a second hand value
                  with no incentives, discounts or builders gifts payable before or
                  after completion and is supported by evidence of comparable
                  property in the resale market.

=145 [*]          The estimated gross monthly rental figure is in the region of
                  £<text>. This is based on the assumption that the property is
                  fit for letting and is let to a person or persons forming part of a
                  single household on an unfurnished 6 month Assured Shorthold
                  Tenancy.

=146 [*]          The estimated rebuilding cost for insurance purposes is
                  £<text>.

=147 [*]          The figure given in respect of the property should be taken as
                  a guide only and specialist advice is recommended.

=148 [*]          The rebuilding cost for insurance purposes is for the subject
                  property only and is given solely as a guide as it is assumed the
                  building as a whole is insured under a single policy.

Legal Considerations

=170 [*]          The property appears to have been [A] altered\ [B] and\ [C]
                  extended\ and our valuation assumes all appropriate consents
                  obtained.

=171 [*]          The property may be affected by <text>. It is assumed that all
                  legal arrangements are satisfactory although further enquiries
                  should be made.

=172 [*]          The valuation assumes there are no Agricultural or other
                  Planning Conditions restricting the occupancy of the property,
                  and this should be confirmed by Legal Advisors.


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=173 [*]          The property is [A] currently under construction\ [B] has been
                  recently built\ and it should be confirmed that all appropriate
                  certification is in place to include an acceptable warranty.

=174 [*]          The property was identified by reference to the site
                  representative and this is assumed to be correct. Conveyancer
                  should check that this aligns with the description of the
                  property and if there are any doubts the details need to be
                  referred back to the valuer


General Information

=200 [*]          The property is in acceptable condition for mortgage purposes,
                  consistent with age and type.

=201 [*]          The property is in acceptable condition for mortgage purposes,
                  consistent with age and type. However ongoing maintenance
                  and general improvement works will be required to maintain
                  the property in a satisfactory condition.

=202 [*]          The property is in acceptable condition for mortgage purposes,
                  consistent with age and type. However elements are now
                  ageing and a number of matters require repair and increased
                  maintenance. It would be prudent to seek further advice
                  before purchase.

=203 [*]          The property is in a basic condition with a number of
                  potentially significant repair and maintenance items identified
                  during our limited inspection.

=204 [*]          The property is in a poor condition for its age and type and
                  areas of significant disrepair were identified during our limited
                  inspection.

=205 [*]          In addition to the essential repairs outlined below, it would be
                  prudent to seek further advice before purchase and additional
                  expenditure will be required.

=206 [*]          The following repairs are considered essential for mortgage
                  lending purposes:

=207 [*]          Evidence of movement was observed in the form of <text>.
                  This appears to be a minor defect which is not thought to have
                  any serious structural significance.

=208 [*]          Evidence of movement was observed in the form of <text>.
                  This appears to be longstanding and non-progressive and the
                  likelihood of further significant movement seems remote. No
                  structural works are considered necessary.

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=209 [*]          A flat felt roof covering is provided to the <text>. Such roof
                  coverings have a limited life and are prone to sudden failure.
                  The risk of such problems is reflected in the mortgage
                  valuation.

=210 [*]          The separation walls in the loft are not carried to full height so
                  presenting a fire and security hazard. Full height separation
                  walls of adequate fire resistance should be constructed.

=211 [*]          The roof covering is of original materials approaching the end
                  of their useful life and more extensive work such as re-roofing
                  is likely to prove necessary during the mortgage term.

=212 [*]          The trussed rafter roof structure lacks the cross bracing
                  required by current Building Regulations. Additional bracing
                  pieces should be installed to current standards to prevent
                  possible future movement.

=213 [*]          The roof is [A] dressed over with felt [B] treated with a sealing
                  compound \which appears to be effective in stopping rain
                  penetration at present. This is a substandard and short-lived
                  method of treatment and future expenditure is likely and re-
                  roofing may prove necessary within the mortgage term.

=214 [*]          Plastic foam has been sprayed on the underside of the roof,
                  preventing inspection of the roof timbers. This technique is
                  regarded as an attempt to temporarily prolong the life of the
                  roof covering and may result in serious problems affecting the
                  roof structure.

=215 [*]          A damp proof course is believed to have been installed by a
                  specialist supported by a long-term guarantee which should be
                  transferred to the purchaser.

=216 [*]          Remedial wall tie treatment works appear to have been carried
                  out. The specialist installer should be identified and any long-
                  term guarantee transferred to the purchaser.

=217 [*]          Some aspects of the service installations including, for example
                  <text> give cause for concern and testing and upgrading is
                  recommended.




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