We require security for any mortgage. This means that we will take a first legal charge over your property as security to protect us against loss in the event that you fail to meet your mortgage commitments.
All mortgage applications are subject to status and our lending criteria, when applying for a mortgage with us we will take into consideration your individual circumstances, type of property, and the amount you wish to borrow.
Who can apply for a Buy to Let?
- All applicants must be aged 18 or over, and they must be no more than 85 years old at the end of the mortgage term. Applicants must apply before their 75th birthday for purchases and remortgages. There is no maximum age at application for further advances, porting or transfer of equity cases.
- County Court Judgements, defaults or arrears recorded against your name within the last six years will affect whether we are able to lend to you. Please speak to one of our advisors on 0800 121 8899 to find out more about how this may affect you.
- You must not have a bankruptcy or IVA currently registered against your name. We may be able to lend to you if you were previously bankrupt or subject to an IVA, provided that it has been fully discharged/completed for at least six years.
- You have previously owned a property in the UK. Buy to Let loans are not available to first time buyers.
How much can you borrow?
For all applicants: if all applicants declare their individual income is less than less than £49,000 each year (£42,500 if resident in Scotland), including all gross income, total gross monthly rental income on this application and all other investments. And they declare themselves to be Lower rate taxpayers*, the minimum rental income required is 125% of your monthly mortgage interest payment on a reference rate of up to 5.5%** based on the chosen product.
For any applicant: if any applicant declares their individual income is less than £49,000 or more (£42,500 or more if resident in Scotland), including all gross income, total gross monthly rental income on this application and all other investments. And declare themselves to be a higher rate tax payer* earning the minimum rental income required is 145% of your monthly mortgage interest payment on a reference rate of up to 5.5%**, based on the chosen product.
* Lower rate tax payers are: non or basic rate tax payers (basic/starter/intermediate rate if resident in Scotland). Higher rate tax payers are: higher or additional rate tax payers (higher/top rate if resident in Scotland)
** Where the total loan has 5 years or more remaining on a Fixed rate product the reference rate is currently 4.5%.
** Or for remortgage applications with no additional borrowing the reference rate is currently 5.0%
Maximum loan amounts
- The aggregate loan limit on all rental properties in mortgage to us is £2,000,000
- The maximum loan to value for a new build/converted apartment, flat or coach house is 50%. The maximum loan to value for a new build house is 75%. These are subject to availability. We define new build as properties that have been built within three years of the mortgage application or are properties to be occupied for the first time. This includes flat conversions where the number of flats in the development exceeds ten.
Maximum number of properties
- The maximum number of mortgaged rental properties you can have with us is five per household and a maximum of ten properties with all lenders.
- Properties must have a minimum purchase price or valuation of £75,000.
- For purchase applications, the lower of the purchase price or valuation must be at least £75,000.
- For remortgages, the valuation must be at least £75,000.
- The property must be in England (including the Isle of Wight), Wales (including Anglesey) or Scotland (including the Scottish Isles).
- It must be of acceptable construction. This generally means built of brick or stone with a tile or slate roof. A mortgage valuation will be used to confirm the suitability of the property. If you think the property falls outside of our accepted construction types please call one of our advisors on 0800 121 8899.
- For leasehold properties, the unexpired leasehold term must be at least 70 years at completion.
- From 1 April 2018, for England and Wales, it is your responsibility to ensure that your property meets the Minimum Energy Efficiency Standard (MEES). For more information go to www.gov.uk/government/publications/the-private-rented-property-minimum-standard-landlord-guidance-documents
The property must be let on a single Assured Shorthold Tenancy (AST) agreement (England and Wales) Private Tenancy (PT) agreements (Northern Ireland), or a Private Residential Tenancy (PRT) agreement (Scotland) for a minimum term of 6 months.
In England and Wales, the maximum term for a tenancy agreement is up to 36 months; where the tenancy agreement is between 12 and 36 months a Department for Communities and Local Government (DCLG) model tenancy agreement must be used.
In Northern Ireland, the maximum term for a tenancy agreement is 12 months, and in Scotland, there is no maximum tenancy term.
The property must be let to either a:
- sole occupant
- single family unit
- maximum of four tenants
- Corporate Body*
* Where the property is let to a Corporate Body (this includes Educational Establishments, Housing Associations or Local Authorities), the maximum term of the tenancy agreement between the Corporate Body and the occupier(s) is 36 months (England and Wales) or 12 months (Northern Ireland). In Scotland, there is no maximum tenancy term. Where the property is in England or Wales and the term of the tenancy agreement between the Corporate Body and the occupier(s) exceeds 12 months, a DCLG model tenancy agreement must be used.
Tenants must not hold any level of diplomatic immunity.
Minimum ownership period
- If you are remortgaging you must have owned the property for at least six months for an application to be considered, except where the property has been inherited by the new owners.
- For purchase applications, the vendor must have owned the property for a minimum of six months.
Unacceptable Buy to Let applications
- Applications to remortgage a main residence to a Buy to Let are not accepted unless the main residence has been let for six months prior to application.
- Applications intended for 'sale and rent back' are not accepted and will be declined. ('Sale and rent backs' are situations where a property is being purchased on a Buy to Let basis where the property is to be let to any previous owner(s), or any member of their family).
- Properties with more than one kitchen, or designed or converted for multiple occupancy are not accepted.
- Applications where it is identified that tenants hold any level of diplomatic immunity are not accepted and will be declined.