When you decide to invest in a property, you must survey it properly. You must do so to make sure there are no issues with the structure or any other cause for concern. There are certain standards that property owners must maintain so that the house is fit to live in. Otherwise, it is unlikely that a tenant will rent it. Or that it will sell. So, what makes a property uninhabitable UK?
First, let’s discuss the definition of an uninhabitable property. Then, we can move on to that factors that make a home unfit to reside in. Which make the property unmortgageable as well.
What is Meant by Uninhabitable Property?
If a house falls below acceptable living standards, then it is called an uninhabitable property. A house in disrepair is an example of such a type of property. This type of house is not safe as it has a high risk of hazard for any tenant who wants to live in it. Also, it is unhealthy.
A house must provide sufficient shelter and comfort to the tenant. If it fails to do so, then it is not fit to live in. Unfortunately, a noticeable number of properties fall short of the required living standards. They are not acceptable to tenants as it is a risk to their health and safety.
It is the responsibility of the property owner to make their property liveable for tenants. It is necessary that their property is in a fit state of repair. If they fail to make the home habitable, then the tenant has the right to claim disrepair. Then, what makes a property uninhabitable UK?
What is the UK Homes (Fitness for Human Habitation) Act?
The noteworthy piece of legislation that allows tenants to act against property owners who do not provide habitable properties is called the UK Homes (Fitness for Human Habitation) Act 2018. This is an amendment to the Landlord and Tenant Act of 1985. It requires that all tenancies, whether new or existing, of less than seven years are habitable. This means from the beginning of the tenancy and throughout it, it remains fit to live in. Under this act, tenants have the right to ask for compensation or request court orders for necessary repairs.
What Makes a Property Uninhabitable UK and Unmortgageable?
If a property is empty and requires major repairs to make it liveable, then it is classed as an unhabitable property. Or even if it is undergoing major repairs. For example, structural alteration of the home. Following are the reasons for which a property is uninhabitable or unmortgageable in the eyes of mortgage lenders:
Structural Defects
For mortgage lenders, a property’s construction is a point of concern. This is because it underpins its safety and value. If the house has structural defects or related issues, then it is unmortgageable, according to lenders. Issues include dry rot and damp. Or if there is subsidence.
Lacking a Bathroom or Kitchen
If a property lacks either of these essential parts of a home, then it is unmortgageable. A home that does not have property facilities is not fit to live in. Therefore, lenders will reject it. For some lenders, central heating is also a necessity. Then, what makes a property uninhabitable UK?
Short Lease
In the case of a leasehold property, the length of the lease is essential to its value. Renewing a lease is an expensive process. Any lease that is less than 80 years is usually unmortgageable.
Freehold Flats
Why is it that mortgage lenders avoid freehold flats? Well, it’s simple. It is because your responsibilities for maintenance as a partial owner are not just restricted to your flat. This means that the costs can differ significantly. These unpredictable costs can lead to a failure of making repayments. Which will result in you falling into arrears. This is why flats in large period developments are difficult to sell.
Non-Standard Construction Types
There are non-standard construction types such as steel and timber-framed houses with prefabricated concrete properties. They are also unmortgageable. This is because they are expensive to maintain and need specialist knowledge to upkeep them. Of course, specialist knowledge is also of high cost. Therefore, lenders will probably not approve your mortgage for such types of properties.
A Property Affected by Development Plans
Under the circumstance that your property is on the construction route, then it is unmortgageable. Or even if it is close to it. This is because the developments mean a decline in the value. The reasons may vary. Maybe it is because of the value of the land or maybe the house is going to face demolition. Examples of developments plans are rail links, airports, and motorways.
Risk of Flooding
It is difficult to sell a property that is in an area of high flood risk. This type of property is very costly to insure and unmortgageable because of the high risk. The lenders see it as a huge risk. If you want to sell this type of property quickly, then you will need a cash purchaser. So, what makes a property uninhabitable UK?
Flying or Creeping Freeholds
In case a property has a flying or creeping freehold, then lenders can consider it unmortgageable. This type of property either underlies or overhangs a neighbouring property. For example, a cellar that extends under a neighbouring property. Or if a balcony extends over a neighbouring house. Under this circumstance, a specialist flying freehold mortgage can help a buyer purchase such a property.
Part Commercial Properties
Suppose your property is above a shop or office, or perhaps right next to it. Then, you require a specialist mortgage. This applies to those properties as well that have a ‘change of use’. Through this, they went from commercial to residential. Thus, it is possible that the standard residential mortgage will not suffice for such a property. Then, what makes a property uninhabitable UK?
Invasive Species
Keep in mind that the property’s current condition is not the only factor that makes it unmortgageable. If there are any invasive plant species, then they affect the property’s future value as well. For example, Japanese Knotweed. This plant is strong enough to break through concrete. Therefore, it is a concern. If someone finds this species through a survey, then is not likely to sell.
Sitting Tenants
If a rental property has sitting occupants or tenants under a lifelong tenancy, it is also unmortgageable. This is because the property owner lets the property to the tenant for their entire life. Suppose you fail to make your repayments? Then, only a very specific type of buyer will purchase this property.
No Building Regulations Approval
Suppose your property adheres to the required planning regulations. Yet, the local building regulation inspector does not approve it. Then, lenders may not approve your mortgage.
Nevertheless, it mostly involves searching for the right certification/compliance documentation. Usually, it is easy. If you face more complex issues during the building works, then it is best to coordinate with the inspector directly. Or reach out to a surveyor.
No Registration with the Land Registry
Lenders must confirm that you legally own your property before they can offer you a mortgage. For confirmation, they need to check the title deeds. If you do not provide them, then it can prevent your sale. So, what makes a property uninhabitable UK?
High-rise Flats
When it comes to approving mortgages for high-rise flats, lenders are cautious. The reason behind this is mainly fire prevention. This is especially true since newly build high-rise buildings will have flammable cladding. Lenders are going to need a full survey of the cladding before they can approve the mortgage. There is a rule which states that they will not lend on anything that is higher than 4 or 5 stories. Regardless of whether it is a student accommodation, part of a retirement complex, or residential.
Rising Ground Rents
In case of leasehold properties, you usually must pay ground rent. You are going to reside in the house for a temporary period, so you need to pay the fee. The management company of the building sets the leasehold fee cost. However, it is subject to change. Therefore, you must read the fine print and thoroughly inspect your lease. Often, there are leases that double the ground rent every 25 years.
Now you know what makes a property uninhabitable UK.
Is it Possible to Get a Mortgage on an Uninhabitable Property?
The short answer is yes, you can get a mortgage on an uninhabitable property. You can also get a mortgage on an unfinished or derelict property. To get a mortgage, you must follow a few steps. First, you need to reach out to a specialist mortgage broker. They will help you in the following ways:
- They will gather all the information relating to the property you want to purchase. Through their help, you can detect any potential negative aspects that lenders are cautious of. As a result, you minimise the chances of your application being rejected.
- Also, they will guide you on the specific eligibility criteria that lenders require for this kind of property. Furthermore, they will help you determine what other documents are necessary as evidence.
- Ultimately, they will find the best mortgage lenders for you. These lenders will have previous experience with such properties. Moreover, they will prepare your application for submission.
What are the Rights of Tenants?
According to the Landlord and Tenant Act 1980 and the Residential Tenancies Act 2004, tenants have certain privileges and rights. As a tenant, it is your right to live on a property that is in a fit state of repair. In case you pay for repairs that were the property owner’s responsibility, you have the right to reimburse them. Also, you have the right to reach out to the property owner whenever necessary. That is why you have access to their contact information. It is your right to have peace and comfort in your home without even your co-tenants disturbing you.
You are safe from an unjust eviction. If you feel any increases or charges in rent are too high, then you have the right to challenge them. It is important to understand what makes a property uninhabitable UK?
Please note that you cannot lease or assign the property to another person as a housing association tenant. Also, you cannot sublet or assign the tenancy.
What is the HHSRS?
In 2006, the Housing Health and Safety Rating System (HHSRS) was introduced. The purpose of this risk-based system is to focus on the issue of human habitation. The government cleared up any ambiguity regarding this system. The regulations are in parts to highlight the different issues that can impact the mental and physical health of an individual.
What are the HHSRS Physiological Requirements?
There are specific issues that fall under this area. They can lead to the property becoming unfit to live in. Also, they are a source of physical damage to the tenant. The following issues are an area of concern:
- Radiation (soil radon gas that enters a building).
- Biocide.
- Mould and dampness.
- Poor ventilation and heating.
- Lead (usually found in paint or water pipes).
- The presence of asbestos.
- High concentrations of CO and other flammable substances.
The property owner is responsible for making sure the property does not have any of these issues. They should prioritise the safety and health of the tenants. Most of these issues are found in properties that are old and did not undergo renovation. Mould and dampness are very common and require immediate fixing. There are various causes behind them. For example, not enough protection from groundwater, plumbing issues, roofing, and drainage. You must know what makes a property uninhabitable UK.
What are the HHSRS Psychological Requirements?
Not only do these issues make the property uninhabitable, but they also can impact the mental health of the tenant.
These issues include:
- Exposure to trespassers.
- Overcrowding.
- Noise pollution.
- Bad lighting.
Surplus number of individuals must not reside on the property. This way, the tenants can have their privacy and enough space. There exists a minimum requirement for a room for one person to live in, which is 6.51m. If it is less than the requirement, then it is uninhabitable. It is necessary to protect the house from intruders. Property owner should consider security installations. Therefore, you must understand what makes a property uninhabitable UK.
Other areas that require attention to guarantee the tenant’s safety and make the home liveable include:
- Pest control to prevent infestation.
- Sufficient supply of water.
- Working drainage and sanitisation resources.
Furthermore, the property owners must make sure that the tenant does not suffer injury from:
- Structural collapse.
- Explosions.
- Falling hazards such as baths, stairs, and level surfaces.
- Fire and electrical hazards.
Conclusion
To conclude, there are many factors which make a house uninhabitable or unfit to live in. If a property is not up to the necessary living standards, then it is unmortgageable. A mortgage lender will not approve of your application if they find anything that is below the standard. Tenants have the right to claim disrepair in case the house is uninhabitable. Therefore, it is best to inspect the property thoroughly before you purchase it.
