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HSBC Stops Lending on Leaseholds with Onerous Ground Rents

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HSBC have become the latest lender to change their CML Handbook instructions to lawyers in relation to ground rents.

Policy 5.14.9 of HSBCs CML Handbook Part 2 now reads

We will not provide residential or Buy to Let Mortgages in the following circumstances:
• The property is subject to an onerous Lease clause regarding an excessive or unreasonably escalating ground rent.
This change comes hot on the heels of the Nationwide Building Society change on the 11th May. Despite some mainstream and industry press pointing to the fact that Nationwide were the first lender to make such a change, this is not the case. A number of lenders were making changes introducing new requirements in relation to ground rent five weeks earlier.

Other Part 2 sections of CML Handbook for HSBC were also changed yesterday. Law firms wanting to be updated when lenders change their instructions can sign up to the LENDERmonitor Alert Service.  

2023 Note: CQS accredited firms who use the LENDERmonitor are increasingly referencing the software in their Dealing with Lender Policy as well as their CQS (CPMS) Learning And Development Policy


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