Lending criteria

Portfolio
Non-portfolio
Ex-pat
Holiday let
Short term finance

Portfolio

Please note this is only a summary of our key criteria, for full information please see our Lending guidelines and submission requirements.

Maximum LTV loan amount

Maximum LTV Loan amount*
up to 65% £2,000,000
up to 70% £1,000,000
up to 75% £750,000

For properties that have an EPC rating of A, B or C:

up to 80% £500,000

Any fees added to the loan will be taken into account for higher LTV applications and included within the maximum loan available and LTV calculations. The total amount of loan plus any fees added must not exceed 80% LTV.

*Varied for some products, see product features

Maximum aggregate borrowing

Normal total mortgage exposure per borrower £5,000,000.

A total mortgage exposure above £5,000,000 may be considered on a bespoke basis upon request. If agreed, a maximum aggregated LTV of 70% will apply.

Income

Applicant(s) should have a minimum combined gross annual income of £25,000 per annum.

The useable income figure in respect of Land and Property income will be derived by deducting the total amount of ‘Residential finance costs’ from the ‘Taxable profit for the year’ figure, in line with current tax calculation requirements.

All income must be evidenced and can include:

  • Gross employment income
  • Taxable self-employed income
  • Occupational or private pension income

Income from state benefits, state pensions and investments will not be considered, but may be taken into account when calculating the tax band applicable to an applicant.

Minimum loan amount

(excluding any fees that are added to the loan)​

£30,000

Minimum age

21 at application

Maximum age

85 at end of application

Property

Minimum property valuation - £75,000

Properties must have a minimum Energy Performance Certificate Rating of E, unless there is an applicable exemption.

This will be verified by Paragon and the acting solicitor and we will not be able to lend on any property that is found not to be compliant.

Properties divided into a maximum of 20 units are considered on an individual basis. HMO's will be considered.

Part commercial properties considered where there is a commercial element not exceeding 40% of total floor space.

For multi-unit properties, HMO's and part commercial properties, landlords must have a minimum of three years’ lettings experience, and must be submitted as portfolio applications, even if the customer is classified as non-portfolio under PRA regulation.

Please see our Portfolio lending guidelines and submission requirements for the minimum valuations that apply to multi-unit properties, HMO's and part commercial properties

Limited companies and limited liability partnerships (LLPs)

Applications will be considered from limited companies and LLPs, and must be submitted as portfolio applications, even if the customer is classified as non-portfolio under PRA regulation.

Additional security in the form of a floating charge will only be required from companies that have material assets and business activities other than holding and letting residential investment property.​

Consumer buy-to-let

We will not consider applications that qualify as consumer buy-to-let mortgage contracts through our portfolio range. However, we do accept consumer buy-to-let applications through our non-portfolio product range.

For more information, please see our Non-portfolio lending guidelines.

Solicitors

We will normally instruct the applicant’s solicitors to act provided that the firm is registered on Lender Exchange, has agreed to our terms and conditions and has been accepted onto our conveyancing panel. For a full list of approved firms, please see our conveyancing panels for England and Wales and Scotland​

Alternatively, please contact New Business Enquiries 0345 849 4040 if you require any further information.

Forward funding facility

Professional portfolio landlords can apply for a forward funding facility free of charge. A facility will help to provide certainty for future business plans, and allows repeat business to be written on a simplified basis.  The facility letter will be issued for a specific amount, and will be valid for up to six months. An abbreviated subsequent property application form helps to reduce the amount of information required.

Please see our Forward funding facility information sheet for more details.

Affordability

Any fees that will be added to the loan will be included in the loan amount used in the affordability calculations.

The gross rental income from the property should equal or exceed the Interest Coverage Ratio as determined using a combination of the tax band applicable to an applicant’s income and the property type.

  • The tax band applicable to the applicant with the highest income will be used
  • For limited liability partnerships, the tax band appropriate to the applicant (member) with the highest income will be used

The tax band and ICR levels are as follows:

Applicant type Single self-contained properties HMO's, multi-unit blocks and all other property types
Basic rate tax payer (20%) 125% 130%
Limited company 125% 130%
Higher rate tax payers (40%) 140% 145%
Additional rate tax payers (45%) 140% 145%

To cater for the PRA affordability regulations, we will now require a fully completed property schedule on all applications before we can carry out our underwriting assessment. We will also need to ask for more information about your customer’s income to enable us to apply the appropriate tax band and ICR to the affordability assessment. Depending on the profile of the case, we may also ask for a business plan and cash flow forecast.

The future affordability assessment will be based on our current understanding of interest rates going forward and rental inflation. We must be satisfied that the applicant(s) are able to withstand increases in mortgage interest rates, cover rental voids and be able to afford the mortgage now and after any fixed/discounted period expires.

Non-portfolio

Please note this is only a summary of our key criteria, for full information please see our Lending guidelines and submission requirements.

Maximum LTV loan amount

Maximum LTV Loan amount*
up to 70% £1,000,000
up to 75% £750,000

Any fees that may be added to the loan are excluded from the LTV calculations, but will be included in the loan amount used in the affordability calculations.

*Varied for some products, see product features

Maximum aggregate borrowing

A lending limit of £1,000,000 will apply and each applicant must own no more than three mortgaged residential investment properties, in both personal name or corporate entity, regardless of lender, including any proposed application.

Applicants

Applications will be considered for a maximum of two individuals in their personal names.

No limited company or limited liability partnership applications. This type of application must be submitted as portfolio, even if the customer is classified as non-portfolio under PRA regulation.

Property

We will not consider applications where the applicant is purchasing a property from an associated limited company.

Applications for houses of multiple occupation and multi-unit blocks must be submitted through our portfolio application process, even if the customer is classified as non-portfolio under PRA regulation.

Properties must have a minimum Energy Performance Certificate rating of E, unless there is an applicable exemption.

This will be verified by Paragon and the acting solicitor and we will not be able to lend on any property that is found not to be compliant.

Minimum age

21 at application

Maximum age

85 at end of application

Income

Applicant(s) should have a minimum combined gross annual income of £25,000 per annum.

The useable income figure in respect of Land and Property income will be derived by deducting the total amount of ‘Residential finance costs’ from the ‘Taxable profit for the year’ figure, in line with current tax calculation requirements.​

All income must be evidenced and can include:

  • Gross employment income
  • Taxable self-employed income
  • Occupational or private pension income

Income from renting property, state benefits, state pensions and investments will not be considered, but may be taken into account when calculating the tax band applicable to the applicant.

Affordability

Any fees that will be added to the loan will be included in the loan amount used in the affordability calculations.

The gross rental income from the property should equal or exceed the Interest Coverage Ratio as determined by the tax band applicable to an applicant’s income. The tax band applicable to the applicant with the highest income will be used.

The tax band and ICR levels are as follows:

Applicant type Applicant ICR
Basic rate tax payer (20%) 125%
Higher rate tax payers (40%) 140%
Additional rate tax payers (45%) 140%

To cater for the PRA affordability regulation, we will now require a property schedule to be completed as part of the online application in every case (a copy of this is available on our documents page for your information). We will also need to ask for more information about your customer’s income to enable us to apply the appropriate tax band and ICR to the affordability assessment.

The future affordability assessment will be based on our current understanding of interest rates going forward and rental inflation. We must be satisfied that the applicant(s) are able to withstand increases in mortgage interest rates, cover rental voids and be able to afford the mortgage now and after any fixed/discounted period expires.

Consumer buy-to-let

We will accept applications that qualify as consumer buy-to-let mortgage contracts, subject to appropriate criteria being met.

More information concerning consumer buy-to-let can be found here.

Ex-pat

Buy-to-let products for expats are now available in our portfolio and non-portfolio ranges.

Maximum LTV loan amount

The maximum loan to value per property for purchases and remortgages is:

  • Up to 70% LTV – maximum loan up to £750,000
  • Up to 65% LTV – maximum loan up to £1,000,000

Any fees that may be added to the loan are excluded from the LTV calculations, but will be included in the loan amount used in the affordability calculations.

Property

Available for single self-contained properties only, with no restrictive covenants in place. The services of a managing agent must be engaged to oversee the property, and details of the agent must be provided prior to completion of the loan. For purchase applications, proof of the source of deposit will be required in all instances.

Applicants

Applications will be considered for Expatriates, who must hold a current UK passport and are residing outside of the UK in one of the following countries:

Austria

Belgium

Bulgaria

Canada

Cyprus

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Iceland

Ireland

Italy

Japan

Netherlands

Luxembourg

Malta

New Zealand

Norway

Poland

Portugal

Singapore

Slovakia

Slovenia

Spain

Sweden

Switzerland

USA

  • Applications will be considered from limited companies / LLPs registered and trading in England, Wales or Scotland, and whose directors/members are expatriates
  • All applicants must have held a UK bank account for a minimum of three years
  • All applicants must provide a certified copy of their current UK passport, together with three separate proof of residency documents
  • A UK credit search will be undertaken wherever possible. Applications will not be considered where there is evidence of poor credit history
  • There is no minimum income requirement, but applicants must provide details of all income
  • All employment statuses are accepted, and full details must be provided as part of the application

Affordability

Any fees that will be added to the loan will be included in the loan amount used in the affordability calculations.​

All calculations will be based on either the current reference rate published on our website, or the product charging rate plus 2%, whichever is the greater.

The affordability of the application will be assessed as follows:

  • For individual and joint applicants, and for limited liability partnerships (LLPs) with expatriate members, the gross rental income should be equal to, or exceed, the Interest Coverage Ratio (ICR) of 140%
  • For limited company applications, the gross rental income should be equal to, or exceed, the ICR of 130%
Applicant type Single self-contained units
Expatriate applicants and LLP’s with expatriate members 140%
Limited company with expatriate directors 130%

Submission requirements

  • A certified copy of a current UK passport
  • Three separate proof of residency documents
  • Proof of source of deposit for purchase applications
  • Details of all applicant income

Holiday let

Buy-to-let products for holiday lets are now available in our portfolio and non-portfolio ranges.

Maximum LTV loan amount

The maximum loan to value per property for purchases and remortgages is:

  • Up to 70% LTV – maximum loan up to £500,000

Any fees that may be added to the loan are excluded from the LTV calculations, but will be included in the loan amount used in the affordability calculations.​

Affordability

Any fees that will be added to the loan will be included in the loan amount used in the affordability calculations.​

All calculations will be based on either the current reference rate published on our website, or the product charging rate plus 2%, whichever is the greater.

The affordability of the application will be assessed in one of two ways:

  • Using the rental income that can be achieved on a monthly Assured Shorthold Tenancy (AST) for the property, calculated at the standard Interest Coverage Ratio (ICR) percentages shown in the table below
  • Where two years holiday rental income can be evidenced by accounts, the gross annual rental income, averaged over 12 months, should be equal to or exceed the ICR of 150%. There will be a secondary calculation to ascertain that holiday rental income can also cover a minimum of 100% of the achievable monthly AST rent
Applicant type AST rent used Holiday let income
Basic rate tax payer (20%) 125% 150%
Limited Company 125% 150%
Higher rate tax payers (40%) 140% 150%
Additional rate tax payers (45%) 140% 150%

Property

Available for single self-contained properties only, with no restrictive covenants regarding occupancy in place. The property must be capable of being let on an AST basis and have an acceptable level of rental demand.

The property must be let on an approved holiday occupancy agreement, for a maximum period not exceeding one month. During the life of the mortgage, the property may subsequently be let out on an AST basis.

Submission requirements

  • If the affordability of the application is to be assessed using the holiday rental income, two years accounts must be provided
  • Applicant income information with payslips or self-employed / limited company / limited liability partnership accounts
  • Property schedule detailing all other properties owned
  • Last three months rental bank statements

Short term finance

Please note this is only a summary of our key criteria, for full information please see our Lending guidelines and submission requirements.

Maximum loan amount

Purchase/Remortgage : £1000,000

Minimum loan amount

Purchase/Remortgage : £30,000

Property

We will take a first legal charge and will normally consider most types of traditionally constructed residential property in England, Wales or Scotland.

Minimum property valuation: £50,000

Mortgage term

Standard refurbishment

Minimum term Maximum term
1 month 6 months

Light refurbishment

Minimum term Maximum term
1 month 9 months

Heavy refurbishment

Minimum term Maximum term
1 month 12 months

Loan to value (LTV)

Refurbishment type Maximum LTV based on initial loan where interest is rolled up Maximum LTV based on end loan balance where interest is rolled up Maximum LTV based on initial loan where interest is serviced Maximum LTV where loan is >£750,000
Standard 70% 75% 75% 70%
Light 70% 75% 75% 70%
Heavy 65% 70% 70% 65%

Solicitors

We will normally instruct the applicant’s solicitors to act provided that the firm is registered on Lender Exchange, has agreed to our terms and conditions and has been accepted onto our conveyancing panel. Please see our conveyancing panel for a full list of approved firms.

Alternatively, please contact New Business Enquiries 0345 849 4040 if you require any further information.

Income

Applicants should have a minimum combined gross annual income of £25,000 per annum.

All income must be evidenced and can include:

  • gross employment income
  • taxable self-employed income

State benefits, state pensions and investment income will not be considered.

Minimum age

25 at application

Maximum age

75 at end of application

Repayment methods

Interest only loans with the repayment type of either monthly payments or gross rolled up interest are available.

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