Residential lending criteria

We will accept the following accountant qualifications:

AAPA, FAPA, ACMA, FCMA, ACA, FCA, ACCA, CA, CPFA, FCCA, MAAT, FMAAT, CTA (Fellow), FTII (Fellow), CTA, ATII, ATT, ACPA, and FCPA.

We only accept residential applications on an ‘advised’ basis. We currently do not offer an ‘execution only’ service to applicants.

The maximum age is 75 (at end of the mortgage term).

• If the applicant plans to work until age 75, we need written confirmation from the adviser on the broker declaration form.
  • The type of employment will need to reflect their ability to work to age 75.

• The minimum age is 18.
  • 55 for a retirement interest-only (RIO) mortgage.

For existing buy-to-let properties in the background:

• Professional landlords are considered self-employed.
  • We need two years' accounts and/or tax assessments to complete an assets and liabilities statement.
• Where the existing property has little equity or negative equity, we may be unable to help, and the case should be referred to us before submission.
• For non-professional landlords, we'll consider buy-to-let (BTL) mortgages as self-financing, subject to:
  • If the rental coverage is less than 125%, any shortfall will be considered in the affordability calculation.
  • Consent to let will be needed, or proof the mortgage is on a BTL basis (BTL mortgage statement).
  • Proof of rental income and mortgage payment/s on the most recent bank statement/s. 
  • This calculation including any added capital raising for deposit funds.
  • Rental coverage must be 125% of the mortgage commitment.
• New residential mortgages can be considered up to a maximum of 90% loan to value (LTV).

The affordability calculator will ask for all monthly commitments and household expenditures. The household expenditure should be based on the property to be mortgaged.

We'll consider monthly credit commitments, including student loans. They must have an outstanding term of six months or longer. If not shown, we’ll use 3% of the outstanding balances on any/all credit cards as the monthly commitment figure.

Subject to passing credit score, we can consider the following:

• CCJs and defaults less than £500 may be considered.
• CCJs and defaults more than £500 can also be considered if they weren’t registered in the last three years.
• Missed payments - status one and two are acceptable, provided the commitment is up to date.
• Bankrupts who’ve been discharged for at least three years.

Our application systems create a soft footprint on decisions in principle applications. This is converted to a hard footprint on a full mortgage application.

Considered up to a maximum of 80% loan to value (LTV). Suppose the application includes capital raising to gift the proceeds to a third party. In that case, we'll require a gifting declaration form to be completed and submitted with the application.

• The applicant/s own deposit or a gift from family is acceptable.
• We allow customers applying for a foreign national or returning expat mortgage to use builders’ incentives of up to 5% towards securing a deposit on a UK new build property.
• Purchase under value between parent/child can be considered.

The calculator will apply deductions to gross income based on tax bands and national insurance (NI) contributions. It will then calculate the net income.

No minimum tenure is required, provided there are no gaps in employment. Otherwise, a minimum of 3 months’ tenure applies.

Applicants currently in a probationary period are acceptable, subject to underwriter discretion. If the customer is on probation, they can apply for a mortgage. 

Employees on a fixed-term contract are acceptable. They must be professionals with 12 months of experience on fixed-term contracts in the same profession. Acceptable industries in this category include the NHS and IT. Unacceptable industries include unskilled, manual or clerical workers. 

Contractors working via an umbrella company are acceptable. We’ll assess income as weekly income minus employer national insurance (NI), umbrella company costs and apprenticeship levy × 46. 

Temporary/agency/zero-hour contract workers aren’t acceptable. 

We’ll consider maternity leave applicants and assess the return-to-work salary.

Please provide us with:

• the last pay slip before maternity leave starts, showing the full-time salary. 

The applicant/s will need to confirm the following information in writing:

1. Whether they will return to work full or part-time and the pro rata salary as applicable.
2. Full details of maternity leave pay, i.e. how many weeks are left at full pay, half pay and statutory maternity pay (SMP).
3. The savings provisions they have in place to support the mortgage whilst on reduced pay.
4. What childcare costs (if any) will be payable when they return to work.
5. The intended return to work date.

We'll consider equity purchase up to a maximum of 90% loan to value (LTV).

The customer(s) have their existing residential property up for sale but may have yet to sell by the time they complete the new purchase.

We'll assess as follows:

• Up to 90% loan to value (LTV), we will treat the existing mortgage payment as a commitment.
• Over 90% LTV, the existing mortgage must be redeemed.
• We need a copy of the estate agent's sales details.

• Flats/maisonettes (including new builds) are acceptable for owner-occupiers but must be leasehold.
  
  • not for buy to let (BTL) applications.
• Flats requiring an EWS1 form must provide a valid EWS1 form to support the property valuation.
• Flat roofs are acceptable and subject to a minimum 25-year insurance-backed guarantee.
• If above a shop, the flat must have its entrance separate from the shop entrance.
• No limit on the number of storeys for flats on both residential and BTL mortgages.
• Max loan to value (LTV) on residential mortgages for non-new-build flats is 90%.
• We'll only lend on flats above the fourth floor with lift access.

• Maximum 90% loan to value (LTV) for borrowers with sufficient UK credit data. Or where we can get enough overseas credit data from its data partner in one of the following countries. Countries include Australia, Austria, Canada, the Dominican Republic, Germany, India, Kenya, Mexico, the Philippines, South Africa, South Korea, Spain, Switzerland, Ukraine and the United States.
• Suppose a borrower is from one of the above countries, but an overseas credit file match failed, or the bureau returned insufficient info.
  • The case can still be considered up to a maximum LTV of 75%.
• We will accept applications from foreign nationals on the following visas:
  • Health and Care Worker.
  • Skilled Worker.
  • Global Talent.
  • Pre-settlement.
  • Family visa.
  • UK Ancestry.
  • British National Overseas.
  • Tier 2 (if granted before 1 Dec 2020).
  • Dependent (as a joint applicant).
  • Spousal/partner (as a joint account).
  • Armed forces exemption.
• You can choose from capital repayment, interest-only, or part and part options.
  • This is subject to a suitable repayment strategy. 
• In all cases where borrowers don’t have sufficient UK or overseas credit data, the maximum LTV is 75%. 
• No minimum time in the UK or minimum time remaining on their visa.
• Joint income can be considered subject to the dependent's visa.
• The income used for affordability must be in GBP.
• Standard affordability checks will be made.
• We allow customers applying for a foreign national or returning expat mortgage to use builders' incentives of up to 5% towards securing a deposit on a UK new build property.

Learn more about our foreign national and expat lending.

A higher lending charge (HLC) is payable on loans above 80% loan to value (LTV).

Are considered up to a maximum of 90% loan to value (LTV). Estimates will be required where borrowing above 80% LTV.

For each application, the identification we need includes:

• UK photocard driving licence (full or provisional).
• UK paper driving licence (full only).
• EU state member ID card.
• UK residence permit.
• UK or EU passport.
• Non-EU passport.
• Non-EU ID card.
• Council tax bill.

All submitted documents must be photocopies of the originals. We can’t consider photographs or camera-scanned documents.

• Allowable up to a maximum of 80% loan to value (LTV). If over 80%, the whole loan must be on a capital and interest repayment basis.
• We need, in writing, a description of the repayment vehicle to repay the mortgage at the end of the mortgage term.
• The repayment vehicle must’ve been in place for six months before the mortgage application is submitted.

Examples of acceptable repayment vehicles

• Sale of mortgage property: Maximum 60% LTV, minimum equity requirement £200k or 300k in London and the South East (minimum equity applies at point of application).
  • Only 80% of LTV is allowable using more than one repayment vehicle.
• Endowment.
• 25% of the projected total value of a defined contribution pension plan.
• 100% of the projected lump sum value of a defined benefit plan.
• Equity ISA.
  • The sale of investment property or a second home, unless occupied by a family member, isn't acceptable (it must be owned in the applicant’s/s’ name only).
  • If a shortfall is found this must be made up by increasing the deposit.
  • We’ll accept selling an investment property or second home in England and Wales if the property's equity covers the borrowed amount.
  • Your client must ensure they have sufficient capital to repay the mortgage at the end of the term.

Examples of unacceptable repayment vehicles

• Conversion to repayment in the future.
• Cash ISA.
• Overpayments from income.
• Future inheritance.

New residential mortgages can be considered up to 90% max loan to value (LTV) where the customer is, for example, upsizing or relocating with their job. We must be satisfied that the existing mortgages will be converted to a permanent letting agreement.

We need:

• Rental coverage of 125% of the mortgage commitment. This calculation must include any added capital raising for deposit funds.
• We'll annualise any shortfall if the rental coverage is under 125%.
  • We will deduct it from income before applying our income multiples to new residential mortgages.
  • No surplus rental income will be assessed.
• Where the existing property has little equity or negative equity, we may be unable to help, and the case should be referred to us before submission.
• Consent to let confirmation, in writing, from the existing lender or a copy of the let-to-buy (LTB) remortgage offer from the new lender.
• A professional letting agent's letter confirming the potential rental income.

• The maximum loan may be limited due to the maximum higher lending charge (HLC) / mortgage indemnity guarantee (MIG) available.
• Mortgage product criteria may specify a maximum loan amount.

The minimum loan size is £30,000.

If the existing matrimonial/dependent relative(s) mortgage is to stay, we must be sure the new home is for the customer's use. 

We’ll assess as follows:

• Up to 90% loan to value (LTV), we will treat the existing mortgage payment as a commitment.
• Above 90% LTV the existing mortgage must be redeemed.

• Cash in hand: where employees are paid in cash, we need to verify this by regular cash payments into the bank account.
  • We can’t assess the income if corresponding payments aren’t made. 
• Profit from UK Land and Property if consistent and shown via two years SA302s minus finance costs: 100%. 
• Regular overtime or bonus (monthly, quarterly, six-monthly, annually - must prove regularity): 50%. 
• Child maintenance: 100% subject to six months' paid evidence on bank statements. 
• Second job income: 100% subject to six months' track record.
• Child Tax Credit: 50% (excluding childcare element). 
• Guaranteed bonus/overtime/shift allowance: 100%.
• State and occupational pension: 100%.
• Working Families Tax Credit: 50%.
• Investment income: not acceptable.
• Large town allowance: 100%.
• Self-employed income.
• Travel allowance: 100%.
• Commission: 50%.

We require the applicant to have at least three years of trading and will ask for the last two years' SA302s and corresponding TYOs.

We’ll use the latest year's trading figures, subject to the fact that there will be no more than a 20% fluctuation in the first instance.

If income fluctuates over 20%, we reserve the right to obtain a reference from a suitably qualified accountant. We want to confirm that the latest year's income is sustainable and discover why it fluctuated.

SA302 and Tax Year Overview must relate to an entire 12-month trading period. We’ll consider cases where they may have incorporated from sole trader status to a limited company/partnership. We’ll need at least one year's trading figures to support the change. 

We’ll consider a pay rise where evidence of the increase can be provided. We’ll need a payslip showing the increase and a bank statement showing the new salary credit.

If the total number of properties, including the property to be mortgaged, is four or more, the applicant is a portfolio landlord. This includes limited company buy-to-lets.

Properties held in the names of any of the borrowers, solely or jointly, should be included in the portfolio.

• The maximum loan to value (LTV) for the portfolio is 75%.
• The maximum buy-to-let portfolio size is 15 buy-to-let properties. At most, five properties can be mortgaged with us.
• The rental income must show that the whole portfolio is self-supporting. This includes unencumbered properties and the property to be mortgaged. It must meet the following income coverage ratio calculation:
  • Maximum interest coverage ratio: 145%.
  • Assumed stressed interest rate: 5.70%.

It’s assumed that an electoral roll search will verify proof of address. If verification doesn’t occur, you will be asked to submit one of the following documents:

• Bank statement (postal or printed and stamped in branch).
• UK photocard driving licence (full or provisional).
• UK paper driving licence (full only).
• Local authority tenancy agreement.
• Tax credit or pension credit letter.
• HMRC tax code notification.
• State pension letter.
• State benefit letter.
• Mortgage statement.
• Recent utility bill.
• Council tax bill.

All submitted documents must be photocopies of the originals. We can’t consider photographs or camera-scanned documents.

Sorry, we can’t use the same document to check the applicant's ID and address. If you can't provide any of the above documents, please contact intermediary support on 0344 481 2010. Press option two to chat about further options.

• Acceptable cladding types: brick, block, or other strong, fireproof cladding with the right safety certification.
• Solar panels: houses fitted with solar panels are acceptable.
  • Provided that adequate insurance is in place to cover any damage caused to the property by the solar panels.
  • New build warranties: we accept NHBC, Premier Guarantee, BLP, Buildzone, LABC, The Q Policy, Protek, and ICW.
  • Our free legal service is unavailable for remortgage applications on houses with leased solar panels.
• Wimpey No-fines House and Laing Easiform house can be considered subject to a satisfactory valuation.
• Property must be of traditional construction with brick or stone walls and pitched slate or tile roof
• New build houses are acceptable up to 90% loan to value (LTV) (we can accept builders' deposits for foreign national or returning expat mortgages up to 5%). A new build property is defined as one built or converted in the last two years, which has never been sold. We do not accept the following: builders cash incentives over 5%, help to buy scheme, armed forces help to buy scheme, shared ownership, own and new, deposit unlock.
• Houses and bungalows with a minimum internal floor area of 50 m2.
• Flats and studios with a minimum internal floor area of 30 m2.
• The property must be the applicant's main permanent residence.
• Structurally Insulated Panel Systems (SIPS).
• Insulated concrete formwork (ICF).
• Modern timber frame or oak frame.
• Properties in England and Wales.
• Modern steel frame.

Ground rent and service charge

Outside London

• Ground rent is £250 max, with a review period of at least 10 years.
• Service charges: generally 1% considered acceptable but can be up to 1.5% depending on facilities – lifts, concierge, gym, communal grounds, etc.

Inside London

• Ground rent is £1,000 max, with a review period of at least 10 years.
• Service charges: generally 1% considered acceptable but can be up to 1.5% depending on facilities – lifts, concierge, gym, communal grounds, etc.

• Any construction covered by Housing Defect laws.
  • Includes high alumina cement, prefabricated reinforced concrete and large panel systems
• Ex-local authority and housing association (ex-public sector flats), including Right to Buy (RTB) flats.
• Purchases that the vendor has owned for less than six months.
• Steel framed properties (only modern steel frame is acceptable).
• Straw bale, hempcrete and volumetric construction.
• Timber-framed properties with timber cladding.
• Unacceptable roof types: sedum (living green).
• Self-build products available via BuildStore.
• Second homes/holiday homes.
• Prefabricated properties.
• Mobile home/houseboat.
• Freehold flats.

Properties owned for less than six months will be considered individually. In these circumstances, the free legal service won’t apply.

• For foreign nationals, the applicant must have permanent rights to live in the UK and be able to prove this. 
• HM Armed Forces personnel abroad are UK residents during their deployment.
• The applicant/s must have lived in the UK for the past two years.
• We don’t accept applicants on working visas.

We'll accept the following retirement income for both retirement interest-only (RIO) and non-RIO lending:

Lending policy for RIO mortgages:

• Interest-only terms, with overpayment allowed, subject to early payment charges (ERCs).
• The sale of the property is the only repayment vehicle assessed at affordability.
• A maximum of two applicants, both using the property as their main residence.
• Capital raising is permitted subject to standard lending criteria.
• Maximum 60% loan-to-value (LTV).
• 55 minimum age.

Learn more about retirement interest-only lending.

If the mortgage term may exceed our assumed retirement age of 68, document the ability to pay the mortgage on a potentially reduced income.

• Max loan to value (LTV) restrictions will apply for applicants lending in or into retirement.
  
  • Lending into retirement: if the applicant (or a joint applicant) has earned income, and the mortgage term extends past their intended retirement age. The max LTV 80%.
  • Lending in retirement: if the applicants aren’t in receipt of any earned income and will be reliant on pension income only - max LTV 70%. 
• We’ll carefully consider affordability into retirement for older applicants nearing retirement age.

Applications are considered on the following basis:

The second charge will require a Deed of Postponement at extra cost to the applicant. This does not apply if only 12 months of the discount period remain.

• If no added funds are being raised, remortgaging an RTB property within the five-year pre-emption period can be considered.
• The RTB is usually restricted to the official tenants who must also be party to the mortgage.
• We don't offer RTB on flats, only houses.
• Maximum loan 100% of the discounted purchase price plus up to £250 costs.
• No added borrowing for home improvements is available.
• A copy of the RTB letter should be obtained.

Shared ownership/shared equity/Government HomeBuy purchases are not acceptable. We can consider a remortgage in which the applicant buys out the final tranche, but the free legal service is unavailable. We require a copy of the final tranche sale paperwork to be uploaded.

Where the applicant is employed (including PAYE directors):

• Where the LTV is 80% or above, the applicant is a first-time buyer or renting, and bank statements are needed for the last three months.
  • Underwriters may ask for bank statements at their discretion.
• Last month's pay slip.
  • At least the last three consecutive payslips must show monthly bonuses, overtime, shift allowances and commission. For quarterly bonuses, provide 2 payslips showing the payment or a P60 may be accepted if this can clearly evidence the bonus payment within the gross income.
• Annual bonus - most recent payslip evidencing annual bonus payment. A P60 may be accepted if this can clearly evidence the bonus payment within the gross income.

Where the applicant is self-employed:

• Three years' accounts or SA302s and tax year overviews.
  • We may need to write to the applicant's accountant for a reference.
• Last three months' business bank statements.

Both freehold and leasehold are acceptable. If leasehold, the minimum required unexpired term on a lease must be at least 85 years from the commencement of the mortgage.

The maximum term is 40 years.

All products are subject to valuation. These are instructed via a panel management company and encompass a variety of national surveying firms.