Which is considered functional obsolescence?

Functional obsolescence refers to a decline in the usefulness or desirability of a property due to factors inherent to the property itself. This can include outdated designs, poor layouts, or features that are not in line with current market expectations.

A five-bedroom house with only one bathroom exemplifies functional obsolescence because the bathroom-to-bedroom ratio is inadequate for modern family needs. In today's market, homebuyers typically expect more than one bathroom in a house of that size, making the property less functional and less desirable. This lack of adequate facilities does not stem from external factors but rather from the design and layout of the house itself.

Other choices depict various issues that do not fit the strict definition of functional obsolescence. Worn out carpet is more about physical wear and tear rather than a design flaw affecting functionality. Lack of parking is often considered an external factor that may limit a property's appeal but doesn't inherently affect its functional design. A building next to a factory could suffer from external obsolescence due to noise or pollution but does not indicate any functional deficiencies of the building itself.