On this page you will find a summary of our current lending terms which apply to our Buy to Let mortgage products.
These lending terms should be read in conjunction with the relevant mortgage product summary which will outline any
requirements specific to individual mortgage products.
Loan amount and property value
- Minimum loan: £45,000. This may vary depending on the product terms selected.
- Maximum loan: Repayment and interest only loans up to £500,000 (refer to New Business Team if above this maximum) - 70% of the lower of vacant possession value. This may
vary depending on the product terms selected.
Loans are subject to minimum vacant possession values or purchase price (whichever is lower)
of £120,000 for flats/maisonettes and bungalows/houses. This may vary depending on the product terms
The minimum term is 5 years and the maximum is 40 years.
Borrower and status
You must already be an owner occupier of a main residence and this status must be retained after completion of our mortgage. We must
be satisfied that you are able to demonstrate a current mortgage track record (minimum 12 months). You must be either gainfully employed
or have investment, pension or other income. Your income must be a minimum of £20,000 p.a. (single or joint) and evidence to confirm
this amount may be required.
Borrowing calculated as:
For remortgage applications where no new borrowing is being taken:
For loans up to 65% of the property value or purchase price, whichever is lower:
The loan amount is assessed on the basis that the monthly rent must exceed 130% of the interest payable per month*
If we are to consider loans up to 70% of the property value or purchase price, whichever is the lower:
The loan amount is assessed on the basis that the monthly rent must be greater than or equal to 135% of the interest payable per month*
* Calculated on the Society's Residential Investment Managed Mortgage Rate.
For purchase applications or remortgage where extra funds are being taken:
The loan amount is assessed on the basis that the monthly rent must be equal to or exceed 145% of the interest payable per month calculated at the higher of :
- The product's initial interest rate plus 2% or
- The Society’s monthly Residential Investment Managed Mortgage Rate or
For remortgage applications to be considered the property must have been owned for a minimum of six months.
For purchase applications we require a letter from a firm of professional letting agents giving an indication
of the rental amount that can be achieved and the state of the local rental market.
Properties must be of standard construction, in good condition and suitable for immediate letting. Properties
must be situated in England and Wales and within predominantly residential areas.
All flats/maisonettes must be self-contained units. New build flats, studio flats, ex-local authority flats,
freehold flats and flats above commercial premises are not acceptable. The number of storeys in any one block of
flats must be no more than 4, although it may be possible in central London to exceed this figure. Leasehold
flats/maisonettes are accepted subject to a minimum period of 70 years unexpired on the lease.
All new-build properties (apart from flats which we will not consider) and multiple applications must be referred
for consideration. Before proceeding please contact our New Business Team on 03330 140140 or email
our New Business Team.
The following property types will not be accepted: properties with more than 1 kitchen, more than 4 bedrooms or
more than 4 tenants, properties designated as Houses in Multiple Occupation (HMOs), properties let to students or
properties where the property is to be rented to the current owner following completion (buy and rent back).
Diplomatic, University/College, Housing Association, Council and DSS lets, will not be considered. There must
be only one agreement which will be approved by the Society's solicitors or licensed conveyancers. Assured shorthold
tenancies only are acceptable with the period for each tenancy not less than six months and not more than twelve
months, except where the tenancy is to either a limited company, or to an individual(s) subject to a rent exceeding
£100,000 per year.
Where the tenancy is to an individual(s) subject to a rent exceeding £100,000 per
year, the lettings must not exceed 1 year or, exceptionally, 2 years. Rent must not be payable more than 1 month
in advance without our prior approval.
In the case of a let to a limited company, occupation must be restricted to an employee of the company and his/her
immediate family. The initial tenant must not be either related to the borrower or the unmarried partner of the borrower.
Buy to let mortgages from UK expatriates are available subject to certain conditions.
All applicants must be able to provide satisfactory evidence of identity, overseas address and proof of income and hold a UK bank account.
Minimum loan amount: £100,000.
Buy to let applications from expatriates are acceptable from a restricted list of countries, as follows:
Kingdom of the Netherlands *
United Kingdom **
* (the Netherlands, the Netherlands Antilles and Aruba)
** UK Crown Dependencies
Evidence of identity must be certified as original by the applicant's overseas bankers or a solicitor/notary in their country of residence.
Please note the introducing intermediary cannot certify these documents.
As part of our ID verification the applicant's employers will be contacted to confirm the residential address details held for them.
You must have an existing UK mortgage so we can establish a mortgage track record. We may require a letting agent to be in place.
Applications will be subject to an increased product fee. Cases outside normal lending criteria may be subject to different product terms.
A UK named individual (a family member or Solicitor) and their address for service of notices will be required.
Buy to Let lending to Limited Companies
The Society can also consider lending on Buy to Let properties where the borrower is a Limited Company. In such cases the following will apply:
- The product fee will be 1.5% of the loan amount.
- The company must be a Special Purpose Vehicle (SPV) registered within England and Wales.
- Maximum 65% loan to value (LTV).
- Minimum loan size £75,000.
- Full personal guarantees will normally be required with joint and several liability from all Shareholders and Directors.
All guarantors will require independent legal advice (in the absence of personal guarantees from all Directors and Shareholders,
the maximum LTV will be reduced by 10%).
- The SPV should be new to avoid the need for due diligence on previous company activities.
- For the period of the mortgage the SPV will be required not to undertake any other business activity nor to take on any other debt.
- All Directors are “natural persons” i.e. no shareholding by other companies.
- Both the Limited Company and the individual Directors and/or Shareholders must have a clean credit history with no:
- Liquidations (compulsory and creditor), other than orderly winding-up of solvent companies.
- Administration orders (Corporate Voluntary Arrangements – CVA – are treated the same as IVAs).
- Winding-up orders (all receiverships).
- Business CCJs are treated the same as personal CCJs.
- SPV must be Standard Industry Classification (SIC) Codes ‘68100 Buying and selling of own real estate’ or ‘68209 Other
letting and operating of own or leased real estate’.
The Society will be separately represented by a conveyancer with suitable expertise in this market appointed by the Society.
General criteria, suitable properties and rent ratio requirements are the same when lending on this basis as when lending to an individual borrower.
THE MORTGAGE WILL BE SECURED ON YOUR PROPERTY
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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