Which lenders changed their CML Handbook P2 the most in 2012?

# change events	lenderName
10	HSBC Bank plc
9	The Royal Bank of Scotland plc
8	National Westminster Bank plc
6	Virgin Money plc
6	The Royal Bank of Scotland plc One Account
6	Darlington Building Society
6	The Royal Bank of Scotland plc First Active
6	The Royal Bank of Scotland plc Direct Line Mortgages
6	The Royal Bank of Scotland plc Virgin One
6	Santander
6	The Royal Bank of Scotland plc Natwest One Account
6	The Royal Bank of Scotland plc Direct Line One
6	Halifax
5	Bank of Scotland Beginning A
5	Lloyds TSB Bank plc-C&G accounts beginning 500000
5	Principality Building Society
5	Lloyds TSB Bank plc-non-C&G mortgages
5	Santander UK plc for Alliance & Leicester mortgages only
4	Lloyds TSB Bank plc-C&G branded roll numbers pre-fixed 20/
4	Lloyds TSB Scotland plc

For conveyancers acting for lenders, 2012 was not a quiet year. The Council of Mortgage Lenders (the body whose handbook is now the UK Finance Mortgage Lenders’ Handbook) restructured parts of Part 1 midway through the year. Individual lenders also made a steady stream of amendments to their Part 2 requirements. The LenderMonitor notifications service recorded 396 substantive Part 2 changes across all regions during 2012, 224 of them in England & Wales. Here are the changes that mattered most.

The July overhaul of Part 1

The main event came on 2 July 2012. Between the 1 July and 2 July scans, the England & Wales Part 1 grew from 115 to 117 clauses, and the knock-on effect showed up at once in Part 2. July was the busiest month of the year by a wide margin, with 62 substantive Part 2 changes in England & Wales, as lenders rushed to answer new and renumbered questions.

Length of ownership and seller-not-owner were split apart. Before July, a single clause 5.1 covered both cases. You reported if the registered proprietor had held the property for less than six months, or if the seller was not the owner. A shared list of exceptions followed, covering personal representatives, mortgagees in possession, receivers and part-exchange developers. After July these became two separate clauses. The new 5.1 requires you to report “immediately” if the proprietor has been registered for less than six months, and it has no exceptions. The new 5.2, “Seller Not The Owner or Registered Proprietor”, keeps the list of exceptions and adds a new one: a Registered Housing Provider (Housing Association) exercising a power of sale. Many lenders then updated their Part 2 answer to 5.2.1, which gives the contact point for these reports, often simply pointing back to 1.11.

Conflict of interest was aligned with separate representation. The conflict-of-interest clause, now 5.3, gained a new sentence. The duty to cease acting “does not apply if acting in accordance with part 3 – Separate representation standard instructions.” This was an early sign of the handbook adjusting to transactions where the lender and borrower are separately represented.

Solar panels arrive in the handbook

The most visible new content was section 5.20, “Energy Technologies Installed on Residential Properties”. It appeared in the 2 July scan and set out, for the first time, how conveyancers should deal with registered leases of roof space for solar PV panels. You must check any such lease against the CML’s minimum requirements and consult Part 2 if it falls short. If a borrower mentions plans for a roof lease after completion, you must advise them that lender consent will be needed.

Lenders’ answers to the new question 5.20.1 varied widely. By the end of 2012, 56 lenders in the England & Wales archive had answered it. Most gave a simple “Yes”, or referred solicitors to their 1.11a contact details. Others were much stricter:

• Paragon stated flatly that it did “not lend on properties that are subject to a lease of roof space for solar panels” and would withdraw the offer unless the panels were owned outright.
• Earl Shilton Building Society said it did not give permission for panels under any roof-lease scheme.
• New Life Mortgages (and later Legal & General Home Finance) declared “Feed in Tariff” leases unacceptable.
• Skipton said the lease had to meet Skipton’s requirements rather than the CML’s, and be approved before the application was accepted.
• Co-operative Bank, Britannia, Platform and Mortgage Agency Services all added the requirement for an unconditional right to break the lease on possession.

For practitioners on panels such as the Skipton Building Society conveyancing panel , the lesson was that “the CML minimum requirements” was a floor, not a common standard.

New home warranties: Build Assure joins the list

Question 6.7.1, on acceptable new home warranty schemes, was the most frequently amended question of the year, with 63 changed answers. The main driver was the recognition of Build Assure (New Homes Structural Defects Insurance). Fourteen lenders added it during 2012, including the RBS/NatWest family of brands in July, Barclays in August and Nationwide in October. Lloyds also tidied up its list, renaming “Construction Register Ltd” as “CRL Management Ltd”.

Rebrands, disposals and moving addresses

Many of 2012’s changes reflected corporate events rather than new policy, but they still mattered to anyone sending funds or documents.

• Northern Rock became Virgin Money. Following Virgin Money’s acquisition of Northern Rock, its Part 2 was updated through 2012. By October, account names, charge requirements (5.8.5) and delayed-completion bank details (10.7) all referred to Virgin Money plc rather than Northern Rock plc. Earlier in the year, its delayed-completion account had also moved from Barclays to HSBC and switched from telegraphic transfer to CHAPS.
• Magellan Homeloans and Mars Capital. In September, Magellan’s Part 2 directed reports to Mars Capital in Leatherhead. By October those references had been replaced with a generic “notify the lender”.
• Lloyds Banking Group deeds moved. In late October, Lloyds and Halifax moved their title deed and document addresses (14.2.1 and 16.1.1) from Lovell Park, Leeds to Barnett Way, Gloucester. The Halifax entry then changed again in November, so anyone relying on an address saved in October had reason to double-check.

Land Registry and the original mortgage deed

A smaller but telling theme was the Land Registry’s e-Document Registration Service. In September Leeds Building Society, and in December Earl Shilton, amended question 14.1.5 to warn that the Land Registry would not accept original mortgage deeds or certified paper copies for retention on e-DRS applications. This was an early sign of the shift toward electronic registration that would transform the process in later years.

Tougher lines on incentives

Several lenders sharpened their approach to incentives (6.4.4). Aldermore, in July, required solicitors to report all finders’ fees, whether or not the CML Disclosure of Incentives Form applied, stating that such fees were “not considered acceptable”. RBS’s First Active brand replaced its own list of incentives with a reference to the CML form. Magellan broadened its requirement to cover “all cash and financial incentives including any fees or commission paid by the seller to a third party”.

Looking back

In hindsight, 2012 marked a turning point. The handbook began to deal with new property features such as renewable energy leases and new-build warranty providers. It separated rules that had long been bundled together. It also absorbed a wave of post-crisis rebrandings and back-office moves. For firms on lender panels, the practical lesson then, as now, was not to rely on memory. A lender’s Part 2 can change several times a year, sometimes more than once in a single month. The full lender handbook archive for 2012 is available via Lexsure.

Short leases were handled by referral rather than refusal

No lender added a specific short-lease policy in 2012. The most detailed approach came from Santander, including its Alliance & Leicester book. Its instructions could approve a short lease in individual cases. Otherwise its minimum was 55 years from completion, with 30 years left at the end of the term. If the unexpired term was between 55 and 70 years and the valuation report either didn’t mention it or wasn’t provided, the solicitor had to stop and seek confirmation. Nationwide asked to be told if the lease term was shorter than the one stated on the offer. Principality asked for notification where 60 years or less remained. Harpenden noted that “exceptions may be considered”. For buyers and owners whose lease falls below these thresholds, the usual answer is a a short lease requires a lease extension, ideally agreed before the mortgage application rather than after a lender has raised it.

Related Reading: Looking for a historical chapter-by-chapter analysis of lender updates? Review our archive post on the Changes by Chapter of the CML Handbook P2 (England & Wales) 2013 to see which sections saw the highest concentration of lender instruction revisions.

Note for Practitioners: While this article analyzes historical 2012 CML Handbook data, tracking lender Part 2 variations remains vital under today’s UK Finance Lenders’ Handbook.