Houses into Homes – Empty Property Loans

1.0 INTRODUCTION

This booklet details the property renovation loans to be made available through the all Wales Empty Property Initiative (Houses into Homes). This is a scheme that has been developed to offer interest free loans to renovate and/or convert empty properties so that they are suitable for reoccupation. This booklet describes how the Loan Scheme will operate, how to make an application and the conditions that will be attached to the loans.

All loans approved will be subject to a number of conditions to ensure that the loan fund monies are “recycled” to assist further empty property schemes.

Any offer of a loan is not guaranteed until you have received formal approval from the Council. Any work you undertake prior to this approval will be at your own risk.

Any queries relating to the scheme or loan conditions should be referred to:

Houses into Homes Administrator
Cardiff Council,
Room 357, County Hall
Atlantic Wharf,
Cardiff
CF10 4UW

Email housesintohomes@cardiff.gov.uk

2.0 APPLICATION FEES

The following fees apply:

Administration Fee

An administration fee will be required as a contribution towards the costs of processing your application.

Loan Amount		Fee
£0 – £50,000	—–	£295.00
£50,001 – £100,000	—–	£395.00
£100,001-£150,000	—–	£495.00

Land Registry Fee

The Council Legal Services are required to register a first or second charge on the property being offered as security.

For loans up to £100,000.00 the fee is £50.00 per title

For loans over £100,000.01 the fee is £70.00 per title

In addition to the above, a Company applying for a Loan will also be required to pay a fee of £45.00 to cover costs associated with registering the charge at Companies House.

The applicable fees will be deducted from the loan amount paid out.

Valuation Fee

• All applications must be supported by a valuation report, unless the Houses into Homes Administrator has indicated otherwise. The valuation report must be undertaken by a member of the Royal Institute of Chartered Surveyors (RICS) on the property offered as security for the loan. The report should confirm current market value of the property. If the valuation relates to the property being renovated or developed then it should also confirm the potential value (on completion) and rental income (if loan to let). The valuation report should be no more than 3 months old.
• The cost of the valuation is payable by the applicant and no application for a loan will be processed without this document, unless the Houses into Homes Administrator has indicated otherwise.
• Please note that Cardiff Council must be named as an interested party and the surveyor must note that the Council is relying on the valuation report for the purpose of the loan application.

It is recommended that applicants source their own approved surveyor to carry this out. See Section 5.0 Loan Security for further information.

3.0 THE LOAN SCHEME

3.1 Purposes for which a Loan may be applied for

• To renovate a dwelling to a reasonable standard, free from any serious hazards (as a minimum), so that it is suitable for immediate occupation, whether by for sale (loan to sell) or to let/rent (loan to let). Please refer to Appendix C (Houses into Homes Standard). The property must have been vacant for a minimum of 6 months.
• To convert an empty property or commercial building into one or more units to the Houses into Homes Standard (as a minimum), so that it is suitable for immediate occupation, whether by for sale (loan to sell) or to let/rent (loan to let).

Persons applying for the above loans may either be existing or prospective owners, but in either case must be able to supply security for the loan as detailed at section 5 below. Please note that the property must be in the applicant’s name before the loan can be approved.

3.2 Eligible works

To be eligible, the works must: –

• On completion, result in the property/units being suitable for immediate occupation as a dwelling(s),
• Comply with all relevant Building Regulations, and
• Achieve the Houses into Homes Standard – see appendix C.

A schedule of works will be agreed with the applicant prior to the offer of any loan and will form part of the loan conditions.

Any costs, which would be eligible for assistance under an insurance claim or third party claim, will not attract loan assistance.  In exceptional cases, a loan may be given on condition it is repaid out of the proceeds of any future claim.

Works outside the curtilage of the property are not eligible for assistance unless they relate to the provision of essential services such as water, gas or electricity.

3.3 Loan Enquiries

All enquiries for a loan will be acknowledged by letter or email and then subsequently dealt with in accordance with the Houses into Homes Empty Property Initiative’s standards for empty property loans.  A copy of the service standards is attached at appendix A

3.4 Buildings not attracting loan assistance

Loan assistance will not be available for the following: –

• Properties, which are not of a permanent nature such as houseboats and caravans.
• Sheds outhouses and extensions such as conservatories, which do not have Building Regulations approval.
• Buildings not suitable for conversion to habitable dwellings.
• Buildings where at least 40% is used by the applicant and/or his family as their home.

4.0 THE APPLICATION

An application for loan assistance should be made on the forms provided through the Houses into Homes Empty Property Initiative. Please complete an Expression of Interest Form to request an application form. A complete application should include the following: –

• A completed application form.
• Confirmation of ownership of the property. This should normally be an “office copy” of the Title Register and Title Plan provided by the Local Land Registry Office – landregistry.gov.uk
• Two itemised estimates and cost of any associated fees e.g. structural engineer’s fees, or project management fees. In exceptional circumstances, the Council may be able to accept a single estimate, where it is appropriate to do so.
• Supporting documentation for ID purposes
• If a company application – you must provide last 3 years accounts.
• If you are an individual, you must provide 2 payslips or P60.
• If self-employed, you must provide 3 years accounts.
• Evidence of shortfall funding (if renovations costs exceed £25,000 per property)
• Valuation Report (undertaken by a member of the Royal Institute of Chartered Surveyors – RICS). In exceptional cases, where the property is unmortgaged and there is clear evidence to support the view that the property provides adequate and suitable security for the loan, a valuation report will not be required.
• Specialist reports, Building Regulations, Planning Permission and plans where required. If a property is exempt from Building Regulations, a letter confirming this from Cardiff Council’s Building Control Team is also required.
• Any other details notified to the applicant before a decision is made as to whether to make the applicant a loan offer.
• Consent from first lender.

Cardiff Council reserves the right to undertake a credit check on any person or limited company applying for a loan.

5.0 LOAN SECURITY

All loan applicants will be required to agree to a legal charge being placed on the property, which is the subject of the loan application, to secure the loan. Agreement may be made in exceptional circumstances to accept a charge on an alternative property.

All legal charges must be either first or (where Cardiff Council receives confirmation from the first charge holder that it consents to a second charge) second charges. Third or subsequent charges will not be accepted.

Where it has been agreed to accept a legal charge on an alternative property that is not the subject of the loan application, the alternative property must be located in England or Wales. However, the additional legal costs associated with this arrangement must be covered by the applicant.

Any property offered as security for the loan will require a valuation prior to the advance of any loan. In exceptional cases, where the property is not mortgaged and there is clear evidence to support the view that the property provides adequate and suitable security for the loan, a valuation report will not be required.

The valuation must be carried out by a surveyor who is a member of the Royal Institute of Chartered Surveyors (RICS), the cost of which will vary in accordance with the property being put forward, and is to be paid by the applicant.

The valuation should include the current value of the property in its present condition, the potential future value (if the property for security is the one being refurbished) and potential rental income (if the property is to be let on completion of works). The valuation report should be no more than 3 months old.

The Council will be unable to make a decision as to whether to approve an application without this valuation document.

Where the property, which is to be offered as security for the loan, already has a charge registered against it, written confirmation from the existing charge holder, confirming their agreement to a further charge being placed against the property, will be required (this is a Land Registry requirement). Please note, a Deed of Priority will also be required to be entered into.

A fee is payable to register the charge at the Land Registry, which will be deducted from the final loan amount paid out. Please see Section 2.0 for current fees charged. Should these fees be varied by the Land Registry, Cardiff Council reserves the right to charge that revised fee.

Where the applicant is a company, a fee is also payable to register the charge at Companies House, which will be deducted from the final loan amount paid out. Please see Section 2.0 for current fees charged. Should this fee be varied by Companies House, Cardiff Council reserves the right to charge that revised fee.

6.0 LOAN RISK ASSESSMENT

All applications for a loan will be subject to a risk assessment that will form part of any decision to approve a loan. Details as to how this assessment will be undertaken are provided at Appendix B. The scheme operates a maximum 80% Loan to Value threshold, based on the proposed loan amount and any existing mortgage, against the current value of the property.

7.0 NOTIFICATION OF LOAN APPROVAL

The applicant will be notified in writing whether the application for assistance is approved or refused. The notification will be provided as soon as reasonably practicable from receipt of a completed application including all relevant supporting documentation and in any case within ten weeks.

The approval will specify the amount of loan and the repayment period.  The offer of a loan will remain open for 8 weeks from the date of the notification letter.

The amount of loan will be based on the lower of the two estimates received. However, in any instance where the estimates are found to be excessive by Cardiff Council, the loan amount will be determined by the Council based on what it considers to be the reasonable costs for the schedule of works.

On confirmation that the loan offer has been accepted, an instruction will go to Cardiff Council’s Legal Services Department to draw up two sets of the Loan Facility Agreement and Legal Charge documents. Cardiff Council will issue these to the applicant. Both sets of documents must be completed and returned to the Council if the applicant wishes to proceed with the loan within 8 weeks from the date of the original notification letter.

On receipt of the completed documents, the Council’s Legal Services Department will apply to the Land Registry Office to register the legal charge against the property. Where the applicant is a Company, the Council will also apply to Companies House for registration of the charge.

On confirmation that the Legal Charge(s) has been registered, the loan monies will be awarded in accordance with any conditions which have been stipulated and recorded in the Loan Facility Agreement document. One original set of the Loan Facility Agreement and Legal Charge documents will be returned to the applicant.

This is expected to be no more than 14 days after the registration of the Legal Charge(s).

A loan offer will expire 8 weeks after the loan approval notification letter has been issued. If after this time Cardiff Council has not received the relevant documentation, the loan offer will be cancelled and the applicant informed in writing.

In the case where an applicant ceases to be the owner of the property, which is the subject of the loan application, or it appears to the Council that the applicant was not at the time of the application being approved, entitled to the loan, no payment shall be made and the loan will be cancelled.

Loans are not transferable either between applicants or properties.

8.0 AMOUNT OF ASSISTANCE

£25,000 per unit of accommodation up to a maximum of £150,000, per applicant.

For example:

1. A 2-bedroom family home would be eligible for a loan of £25,000. (Classed as 1 unit)
2. A house converted into 2 self contained flats would be eligible for a loan of £50,000.
3. A large house converted into 8 self contained flats would be eligible for the maximum loan of £150,000.

NOTE – This amount is inclusive of all costs including value-added tax and fees.

If Cardiff Council is satisfied that owing to circumstances beyond the control of the applicant and the costs of the work has increased due to unforeseen works, the loan may be increased, under exceptional circumstances, subject to the loan maximum and submission of satisfactory estimates.

An appropriate estimate must support any request for any loan increase.

Any additional costs incurred by Cardiff Council’s Legal Services in association with amendments to existing Loan Facility Agreements and Legal Charge Documents, must be met by the loan applicant and will be payable to Cardiff Council prior to the release of further funding, if approved.

9.0 SUPERVISION OF WORKS

The building contract will be between the applicant and the chosen contractor and will not include Cardiff Council.  An officer from the Council or an agent acting on its behalf will check the works to ensure they are carried out in accordance with the specification of work, and meets the requirements of the Houses into Homes Standard and good building practice.  However, the Council, its officers or its agents acting on its behalf, are not liable for any poor workmanship nor do they provide any guarantee.

Where appropriate, it is recommended that applicants employ their own surveyor whose fees are eligible for loan assistance, subject to the loan maximum.  Responsibility for supervision of the works rests with the applicant.  Any works that have not been completed to an acceptable standard, will be the responsibility of the applicant.

On completion of the works the applicant is to provide notification to Cardiff  Council or its agent that: –

• The works have been completed to a satisfactory standard and in accordance with the loan offer and estimates, current Building Regulations and in accordance with the specification of works issued;
• Copies of invoices for works undertaken and payments made, certified guarantees and test certificates requested as part of the agreed schedule of works are made available for inspection; and
• The repair and renovation of the property complies with the “Houses into Homes Standard”.

10.0 APPEALS AGAINST REFUSAL OF LOAN

Where an application for a loan is refused the applicant will be notified of the reasons for refusal in writing and informed of the procedure for an appeal against the decision.

If an applicant disagrees with the reasons for refusal, an appeal may be made in writing to the Housing Development Manager, stating the reasons why the applicant disagrees.  This appeal should be made within 14 days of receipt of the refusal letter.

The applicant will be notified, in writing and within 14 days, of the decision.

If the Housing Development Manager does not allow the appeal, an applicant can make a further appeal within 14 days to the Regional Loans Appeal Panel.  The Loans Appeal Panel will sit within 28 days of this second appeal being lodged.  An applicant may attend the Loans Appeal Panel to present their case.

The Loans Appeal Panel will inform the applicant in writing within seven days of their decision.

There is no further appeal.

11.0 REPAYMENT OF THE LOAN

All loans paid under this scheme will be repayable.

Where the loan approved is a “Loan to Sell” the loan will be repayable immediately upon sale or no later than the date stipulated in the Loan Facility Agreement (maximum of 2 years).

Where the loan approved is a “Loan to Let”, the loan will be repayable no later than the date stipulated in the Loan Facility Agreement (maximum of 3 years), unless there is an earlier disposal of the property or the units within the property are divided and all sold on the same day.

Where the property is to be converted into units and there is a disposal of one or more units (prior to the fixed dates set out in the terms of the Loan Facility Agreement), then on each such disposal of a unit, the applicant must repay the lesser amount of the gross sale proceeds and the amount of the loan outstanding.

If, after all such disposals, monies are still outstanding under the loan, then the applicant must repay such monies on whichever occurs the earlier of the disposal of the final unit or the relevant date as set out in the loan agreement.

“Loan to Let” Example:

Mr Smith borrows £150,000 to renovate a large house and convert it into six flats. Following approval of the loan by Cardiff Council on 2 January 2013, Mr Smith intends to let the flats out to tenants once the works are completed.  The works complete on 1 March 2013 and soon afterwards Mr Smith begins to let all the flats out to tenants.

However, after a while, Mr Smith decides that he no longer wants to let out all of the flats. Therefore, he sells one of the flats on 1 July 2013 for £100,000. On that date Mr Smith must repay £100,000 to Cardiff Council.  Mr Smith then sells another of the flats on 1 December 2013 for £110,000. On 1 December 2013, Mr Smith must pay Cardiff Council the outstanding capital balance of the loan, which is £50,000.

If Mr Smith had not sold the second flat, but had continued to let it and the remaining properties out, he would have had to pay the £50,000 on 2 January 2016 (maximum of 3 years from approval of loan).

If Mr Smith had instead sold all of the flats on 1 July 2013, then he would have had to repay £150,000 on that date, even if the total sale proceeds of all the flats had not come to £150,000.

If, instead of selling any of the flats, Mr Smith had continued to let out all of the flats, then he would have had to repay £150,000 to Cardiff Council on 2 January 2016.

12.0 LOAN INTEREST

The loan is interest free, but if there is a breach of the loan conditions, Cardiff Council will charge interest at the Standard National Rate in force at the time of the loan, currently 6.0%

Where any sum is required to be paid, but is not repaid in accordance with the loan conditions, a breach of conditions will have occurred and Cardiff Council may demand immediate repayment of the loan and any interest.

13.0 REPAYMENT UPON BREACH OF CONDITIONS

In the case of a breach of loan conditions, any outstanding loan becomes repayable to Cardiff Council.

In the case of a loan to sell, where the property is not made available for sale within 12 weeks of the date set for completion of those works (or by date to be agreed for the Houses into Homes scheme, if earlier), a breach of loan conditions will be considered to have occurred.

In the case of a loan to let, where the property is not made available for let within 12 weeks of the date set for completion of those works, a breach of loan conditions will be considered to have occurred.

14.0 SECOND LOANS

Where a person has already received a loan, a second or subsequent loans may be permitted subject to the condition that no applicant may hold loans awarded through the Houses into Homes Empty Property Initiative to a value greater than £150,000 at any one time.

Applicants will also be required to demonstrate that they have completed works relating to their first loan application and have successfully marketed and either ‘let’ or ‘sold’ the property before a second loan application is administered.

Service Standards for Loans Procedure

These standards have been produced to:

• Inform our customers of the standards and level of service they can expect from us.
• Ensure all enquiries/applications are dealt with on an equal basis.

Service Standards and Procedure

On receipt of an enquiry, within 2 weeks a loan enquiry acknowledgement email/letter will be sent to the prospective loan applicant including a loan application pack, which will include information on the Initiative and an application form.

An inspection of the property will be undertaken as part of the assessment of the loan application.

On receipt of a completed loan application, i.e. application form and all further documentation listed in section 4 above, subject to these being satisfactory, the applicant will receive within 10 weeks a loan offer.

If a loan offer is accepted, payment of the loan monies (less the application fee) will be sent out within fourteen working days of the Council Legal Services confirming that the Legal Charge(s) have been registered.

Unforeseen works – where unforeseen works arise during the course of the loan aided works, a decision (which may include a site visit) as to whether the works are to be included, will be made within five working days, following receipt of estimates.

Following payment of the loan, applicants will be required to provide quarterly updates to Cardiff Council on progress of works and also provide date works completed and date property has been rented or sold.

The Houses into Homes administrator will write to you 12 weeks before a loan is due to be repaid to ensure that you have made the necessary arrangements to repay the loan in full.

Failure to comply with the terms of the loan may put your property offered as security at risk.

Risk Assessment Procedure for Empty Property Loans

Whenever monies are loaned, there is an element of risk if the loan is not repaid, or the project not completed.  It would, therefore, fail to contribute towards the empty property initiative.  To ensure that these risks are minimised, the following risk assessment procedure has been devised, against which each scheme will be evaluated to determine the level of risk. Any scheme where the risk is evaluated as being in the high-risk category will not be considered appropriate for a loan from Cardiff Council.

The Houses into Homes Administrator will welcome the opportunity to discuss any proposed application with the empty property owners/developers, but no commitment to approve an application or commit funding will be given until a completed application has been received and subjected to the following risk assessment procedure.

All applications will be initially vetted by the relevant House into Homes Administrator. This will be to confirm:-

• that the property has been empty for six months or more;
• that the works/conversion can be completed within a time scale to satisfy the Initiative’s target; and
• approvals and/or consents (if any) required to undertake the works/conversion are held.

Delivery Risk

To minimise the delivery risk, all applicants for loans will be required to satisfy the following criteria before their application will be considered:-

1. The property that is subject to the loan application has been acquired/already in the ownership of the applicant.
2. All required consents for the works/conversion have been approved; these will include full planning permission, building regulation approval, listed building and conservation area consent, where applicable.
3. Confirmation that there are no legal constraints or restrictive covenants on the property that would prevent the proposed works/conversion from being undertaken.
4. Any requirement for a contaminated land investigation has been undertaken, and where any remediation works are required, these have been agreed with the relevant contaminated land officer.

Once the above criteria have been satisfied the application will be assessed against the following financial risk assessment, which is based on the business case details supplied on the application form, to determine if the application should be approved. Each of the questions listed below will be assigned a score and these individual scores will be totalled to give an overall score, which will then place the application in either a high, medium or low category. Those applications scored as being high risk will not be approved, and preference will be given to those applications scored as being low risk.

Risk Assessment

Risk category	Points
Low	Up to 10
Medium	Between 10 and 50
High	Over 50

1. Credit rating
All persons/companies submitting an application may be subject to a credit check.

Risk	Score
Satisfactory credit check/credit check not required	0
Unsatisfactory credit check	50

2. Business plan

Risk	Score
The applicant supplied a satisfactory business plan to demonstrate that the proposed empty property scheme is financially viable	0
The applicant‘s business plan does not demonstrate that the proposed empty property scheme is financially viable	50

3. Loan amount being applied for?

Risk	Score
Up to £50,000	1
Between £50,001 and £100,000	5
Between £100,001 and £150,000	10

4. Loan(s) to property value[1] percentage?

Risk	Score
The proposed loan amount and any existing loan/mortgage on the property does not exceed 50% of the property value	1
The proposed loan amount and any existing loan/mortgage on the property is between 51% and 80% of the property value	5
The proposed loan amount and any existing loan/mortgage on the property is between 81% and 100% of the property value	10

5. Proposed term of loan

Risk	Score
Up to 24 months	5
Between 25 and 36 months	10

6. Provision of references
All applicants are requested to provide, where possible, evidence of two similar types of schemes to that proposed in the current application having been successfully completed.

Risk	Score
Satisfactory references supplied	0
No references available	5

Total Points

[1] All properties subject to a loan application will be require a RICS valuation document, unless the Council has specified otherwise

HOUSES INTO HOMES STANDARD

Criterion A: It meets the current statutory minimum standard for housing

To be fit, a dwelling should be free of category 1 hazards as assessed through the Housing Health and Safety Rating System (HHSRS).

Criterion B: It is in a reasonable state of repair

A dwelling satisfies this criterion unless:

• one or more key building components are old and, because of their condition need replacing or major repair; or
• two or more other building components are old and, because of their condition need replacing or major repair.

A building component can only fail to satisfy this criterion by being old and requiring replacing or repair. A component cannot fail this criterion based on age alone.

Building components

Building components are the structural parts of a dwelling (e.g. wall structure, roof structure), other external elements (e.g. roof covering, chimneys) and internal services and amenities (e.g. kitchens, heating systems).

Key building components are those, which, if in poor condition, could have an immediate impact on the integrity of the building and cause further deterioration in other components.

They are the external components plus internal components that have potential safety implications and include:

• external walls;
• roof structure and covering;
• windows/doors;
• chimneys;
• central heating boilers;
• gas fires;
• storage heaters;
• plumbing; and
• electrics

Lifts are not considered to be a key component unless the lift or the lift shafts have a direct effect upon the integrity of the building.

If any of these components are old and need replacing, or require immediate major repair, then the dwelling is not in a reasonable state of repair.

Other building components are those that have a less immediate impact on the integrity of the dwelling. Their combined effect must, therefore, be considered, with a dwelling not being in a reasonable state of repair if two or more are old and need replacing or require immediate major repair.

Old and in poor condition

A component is defined as ‘old’ if it is older than its standard lifetime. Components are in poor condition if they need major work, either full replacement or major repair.

One or more key components, or two or more other components, must be both old and in poor condition to render the dwelling non-decent on grounds of disrepair. Components that are old but in good condition or in poor condition but not old would not, in themselves, cause the dwelling to fail the standard.

A building component, which requires replacing before it reaches its expected lifetime has failed early. Under the terms of the definition, this early failure does not render the dwelling non-decent.

Criterion C: It has reasonably modern facilities and services

A dwelling is considered not to meet this criterion if it lacks three or more of the following:

• a kitchen which is 20 years old or less;
• a kitchen with adequate space and layout;
• a bathroom which is 30 years old or less;
• an appropriately located bathroom and WC;
• adequate external noise insulation; and
• adequate size and layout of common entrance areas for blocks of flats.

A kitchen failing on adequate space and layout would be one that was too small to contain all the required items (sink, cupboards cooker space, worktops etc) appropriate to the size of the dwelling.

An inappropriately located bathroom and WC is one where the main bathroom or WC is located in a bedroom or accessed through a bedroom (unless the bedroom is not used or the dwelling is for a single person).  A dwelling would also fail if the main WC is external or located on a different floor to the nearest wash hand basin, or if a WC without a wash hand basin opens on to a kitchen in an inappropriate area, for example next to the food preparation area.

Inadequate insulation from external airborne noise would be where there are problems with, for example, traffic (rail, road and aeroplanes) or factory noise.

Inadequate size and layout of common entrance areas for blocks of flats would be one with insufficient room to manoeuvre easily, for example, where there are narrow access ways with awkward corners and turnings, steep staircases, inadequate landings, absence of handrails, low headroom etc.

In some instances, there may be factors which may make the improvements required to meet the Houses into Homes standard, challenging or impossible, factors such as physical or planning restrictions.  Where such limiting factors occur, the property should be assessed to determine the most satisfactory course of action in consultation with the relevant body or agency, to  determine the best solution. The outcome may determine that some improvements may be possible even if all are not.

A dwelling would not fail this criterion, where it is impossible to make the required improvements to components for physical or planning reasons.

Criterion D: It provides a reasonable degree of thermal comfort

The definition requires a dwelling to have both efficient heating and effective insulation.

Efficient heating is defined as any gas or oil programmable central heating, electric storage heaters,  warm air systems, under floor systems, programmable LPG/solid fuel central heating, or similarly efficient heating systems which are developed in the future.

The primary heating system must have a distribution system sufficient to provide heat to two or more rooms of the home. There may be storage heaters in two or more rooms, or other heaters that use the same fuel in two or more rooms. Even if the central heating system covers most of the house making a dwelling decent, under the HHSRS the home should be warm enough for the occupant.

Heating sources which provide less energy efficient options, fail the Houses into Homes standard.

Programmable heating is where the timing and the temperature of the heating can be controlled by the occupants.

Because of the differences in efficiency between gas/oil heating systems and the other heating systems listed, the level of insulation that is appropriate also differs –

• For dwellings with gas/oil programmable heating, cavity wall insulation (if there are cavity walls that can be insulated effectively) and at least 50mm loft insulation (if there is loft space) is an effective package of insulation.
• For dwellings heated by electric storage heaters/LPG/programmable solid fuel central heating a higher specification of insulation is required: at least 200mm of loft insulation (if there is a loft) and cavity wall insulation (if there are cavity walls that can be insulated effectively).

A SAP rating of less than 35 (using the 2001 SAP methodology) has been established as a proxy for the likely presence of a Category 1 hazard from excess cold.

Q. What are Empty Property Loans?

Empty Property Loans are loans being made available through the Houses into Homes Initiative to enable the renovation and improvement of single properties or the conversion of empty properties into a number of units, so that they are suitable for use as residential accommodation.

Q. Who can apply for a loan?

Individuals and companies can apply for a loan, if they already own an empty property or are considering buying an empty property in Cardiff.

Q. For how long must a property have been empty before I can apply for a loan?

Loans can only be made available for properties that have been empty for at least six months or more.

Q. Does the property have to be an existing dwelling to be eligible for a loan?

No. We will consider applications for loans to convert empty commercial properties into residential accommodation. However, it is very likely that you will need planning permission for the conversion and so you are strongly urged to contact the local planning department to discuss your proposals. We will only consider a loan application if the relevant planning permission has been granted

Q. What is the maximum amount of loan I can apply for?

The maximum loan amount you can apply for is £25,000 per property or unit, up to a total maximum of £150,000, per applicant. If you are applying for a loan to convert one building into four units the maximum loan you can apply for is £100,000. If you were applying for a loan to convert a property into ten units the maximum amount of loan would be £150,000. The actual amount of loan that will be approved will be dependant on the actual cost of the works, e.g. if the works are calculated to cost £10,000 this is the maximum the loan will be approved for.

Please note that any loan offered, taking into account any existing mortgage, cannot exceed 80% of the current property value. Therefore, if you have an existing mortgage of £65,000 on a property with a current market value of £100,000, then the maximum loan that can be approved is £15,000.

Current Value – £100,000

Mortgage & Loan – £65,000 & £15,000 = £80,000 (Maximum 80% Loan to value)

In exceptional cases it may be possible for another property to be used as security for the loan.

Where the cost of the works exceed the value of the loan, then the applicant must be able to show that they have adequate funds to complete the development (referred to as shortfall funds).

Q. What do I have to do with the property or units after completion of the works?

You can either let/rent out the property/units or you can sell the property/units to a new owner. Loans are not available for people wanting to renovate the property and live in it as their principal home, or for holiday lets or serviced/short-term lets.

Q. Do the works/conversion have to be carried out to any sort of standards?

Yes. All work must be carried out in accordance with any planning permissions or building regulation approvals made in respect of the property. Additionally the property/units must comply with the Houses into Homes Standard on completion of the works. Further details about the standard are contained in the loans information booklet or contact the Houses into Homes Administrator for clarification.

Q. Are there any conditions attached to approving the loan?

Yes: –

• You must carry out the conversion/repair works within an agreed time period.
• The property/units must be marketed for sale or for let/rent within a reasonable period of time after completing the works (12 weeks). If the property/units are available for rent and are not occupied within this time period, then the loan may become repayable.
• The loan must be repaid either on or before the date as specified in your Loan Facility Agreement.
• A financial charge will be made on the property for the lifetime of the loan.
• More information about the conditions can be found in the loan information booklet or contact the Houses into Homes Administrator for further clarification.

Q. Are the loans secured loans?

Yes. All loans approved must be secured by a first or second financial charge being secured against the property.  If there is an existing mortgage on the property we will need the lender’s consent to secure our charge.

Q. I am interested in applying for a loan, what do I do next?

Please telephone the Houses into Homes Administrator on 07971 610679 for a brief discussion, in order to establish if we can be of assistance, or email housesintohomes@cardiff.gov.uk  You will need to provide details for the following –

• Your name, address and contact details
• The address of the property for which you would like to apply for a loan
• The current value of the property and amount of any mortgage
• A brief summary of the works to be undertaken
• The anticipated cost of the works
• How many units of accommodation the conversion/renovation works will provide on completion.
• If the property/units will be sold or made available for letting on completion of the works.
• How the loan will be repaid.

Q. What is the interest rate for the loan?

The loans are interest free, providing there is no default on the loan.

Where any sum is required to be paid, but is not repaid in accordance with the loan conditions, a breach of conditions will have occurred. In such instances Cardiff Council may demand immediate repayment of the loan and interest at the national standard rate.

Q. When will I have to repay the loan?

This will depend on what you intend to do with the property on completion of the works –

• If you are renovating a single property, which is to be sold (Loan to Sell), the loan must be repaid when the property is sold or up to two years from the date of the loan approval, whichever is the sooner.
• If you are converting a property into a number of units, which are to be sold on completion of the works (Loan to Sell), it is expected that the loan must be repaid on sale of the first unit, or two years, whichever is the sooner.
• If the property/units are to be made available for letting (Loan to Let), the loan must be repaid within 3 years from the date of the loan approval (unless there is an earlier disposal of the property or units within the property).
• All loans can be repaid earlier if the applicant wishes to do so.

Q. How do I get more information about the loan scheme?

All persons making an enquiry will receive a Houses into Homes application pack which will include:-

• Houses into Homes Information Booklet
• Application Form for an Empty Property Loan
• Frequently Asked Questions
• VAT information sheet
• Consent from First Lender Template Letter

Your privacy is important to us. This information notice explains what personal data we collect from you and how we use it. Please read the information below and, if you’d then like more information, contact us.

Why do we process your personal information?

We process your personal information, including special categories of personal information, in connection with responding to any expression of interest and processing any loan application you may submit through the Houses into Homes Scheme.

We process this information either because it’s necessary for us to do so in order to manage your loan application, or because there are laws that allow us, or require us, to process it. If you didn’t give us this information, we wouldn’t be able to administer your loan application or provide the services under your subsequent loan agreement and legal charge (if your application is successful).

When processing your application, we may need to deal with third parties, such as  solicitors, financial advisers, banks, valuation surveyors and contractors, on such matters including obtaining lender consent and discussing the council’s legal charge, confirming the value of the empty property and the scope of works to be carried out.

We may also need to deal with internal council departments (including but not limited to Legal, Finance, Council Tax, Business Rates), Shared Regulatory Services and other public sector organisations, such as Welsh Government.

The type of personal information we collect

We currently collect and process the following personal information, but is not limited to:

Personal identifiers:

• Title, first name and surname
• Contact details including postal address, email address and telephone numbers
• National insurance number
• Date of birth

Special Category (optional):

• Gender
• Sexual orientation
• Religious belief
• Ethnicity
• Marital / civil partnership status
• Languages spoken
• Disability

Other information:

• Residential status
• Employment status
• Occupation information & Employer contact details
• Annual income / Other regular income
• Company details (if applicable) / VAT registration details
• Savings
• Citizenship

Scheme specific data:

• Existing mortgage/ loan information
• Financial status and bank account details
• Details of rental properties in your personal or company ownership
• Details of non-loan repayments / court proceedings / CCJs / bankruptcy (in your personal or company name)

How we get the personal information, why we have it & how we use it

Most of the personal information we process is provided to us directly by you for one of the following reasons:

Loan Application stage

• So that we can respond to an expression of interest in the loan scheme.
• To ensure that you meet the scheme criteria.
• So that we can process your loan application.
• So that we can liaise with other internal departments during the assessment of your loan application.

Loan Approval stage

• If successful, your application will be given to the council’s Legal Team, so that they can proceed with the legal documentation and lodge the council’s legal charge.
• Once the loan has been paid out, we will contact you on a quarterly basis to monitor how the works are progressing and to confirm the works completion date and property occupancy date.
• We will also contact you 3 months prior to the loan repayment deadline to confirm the amount of loan outstanding and repayment arrangements.

We also receive personal information indirectly, from the following sources in the following scenarios:

• We may have received a referral from an online form via the council’s website.
• We may have received a referral from another department/organisation following an enquiry from you.

Organisations that we may share your personal data with

We may share this information with other departments within Cardiff Council, including, but not limited to:

• Cardiff Council Legal Team
• Cardiff Council Finance Team
• Council Tax / Business Rates
• Private Sector Leasing Scheme Team
• Housing Enforcement Team (Shared Regulatory Services)

We may also share your personal information with relevant outside agencies, including, but not limited to:

• Welsh Government
• Contractors
• Surveyors
• Valuers
• Your solicitor
• Your lender/mortgage provider

The lawful basis we rely on to process your personal information

The lawful basis we rely on for processing your personal information will generally be one of the following:

• UK GDPR Article 6 (1) (a) You have provided consent for us to process your application.
• UK GDPR Article 6 (1) (b) You have entered into a contract with us.
• UK GDPR Article 6 (1) (f) We have a legitimate interest to process your data.

How we store your personal information

Your information is securely stored on password protected databases on a secure network with access only permitted to staff operating the Houses into Homes Scheme.

We will keep your personal data for different time periods depending on what we use it for:

General Enquiries / Expressions of Interest – retained on electronic file for 6 months.

Successful Loan Applications – retained on electronic file for 7 years, or until the loan has been repaid in full (as applicable).

Unsuccessful Loan Applications – retained on electronic file for 6 months.

Your data protection rights

Under data protection law, you have rights including:

Your right of access – You have the right to ask us for copies of your personal information.

Your right to rectification – You have the right to ask us to rectify personal information you think is inaccurate. You also have the right to ask us to complete information you think is incomplete.

Your right to erasure – You have the right to ask us to erase your personal information in certain circumstances.

Your right to restriction of processing – You have the right to ask us to restrict the processing of your personal information in certain circumstances.

Your right to object to processing – You have the the right to object to the processing of your personal information in certain circumstances.

Your right to data portability – You have the right to ask that we transfer the personal information you gave us to another organisation, or to you, in certain circumstances.

You are not required to pay any charge for exercising your rights. If you make a request, we have one month to respond to you.

Please contact us at housesintohomes@cardiff.gov.uk if you wish to make a request.

How to Complain

You can complain to the ICO if you are unhappy with how we have used your data. The ICO’s address:

Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

Helpline number: 0303 123 1113

ICO website: https://www.ico.org.uk

Contacting Data Protection –

Please contact the Council’s Data Protection Officer for further information:

Data Protection Officer
Information Governance Team
County Hall
Atlantic Wharf
Cardiff
CF10 4UW

dataprotection@cardiff.gov.uk