12 August 2022 by Esin Taze

An Introduction to the Lenders’ Handbook

The “Lenders’ Handbook” was introduced in 1999.  It is essentially a bible to which property lawyers must adhere in residential property transactions. It sets out a lending bank’s instructions and requirements.

The handbook is divided into two parts. Part 1 includes a number of general instructions. Part 2 is the main section and contains the lender’s specific requirements for the most common questions and issues that can come up in a residential conveyancing transaction.

The handbook deals with a huge list of questions, varying from Japanese knotweed to ground rent, from length of acceptable lease term length to whether a lender accepts lending on ‘flying freeholds’.

The most important thing to note is that a lender has the ability to change their requirements in the handbook. Therefore, property lawyers should not assume they know a lender’s requirements on a particular issue because they have checked the requirements before – even if they did so recently.

A lender can easily update or amend their requirements and they do so frequently. Each lender has a different answer to each question.

 BSA Yearbook

Whilst the Lenders’ Handbook is used by banks, there is a separate official handbook for building societies – the Building Societies Association Yearbook. Again, for property lawyers, this is adhered to as a bible.

The BSA introduced these mortgage instructions in 2010, ensuring that there is a set of standard instructions for building societies, just as there is for banks with the Lenders’ Handbook.  The Yearbook is again split into two sections – instructions only, followed by specific requirements only – and, again, it contains the lender’s requirements for common issues and questions that can come up in a residential transaction.

Overall, it’s important to appreciate that different lenders may have different requirements.  What satisfies one lender may not necessarily satisfy another.  If you are in any doubt as to your lender’s requirements in relation to your property transaction, please get in touch with Esin Taze or one of the other experts in our Residential Real Estate team.

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