Buy to Let hub

All you need to know about Buy to Let policies

ONLY FOR USE BY MORTGAGE INTERMEDIARIES

Buy to Let policies and Income Coverage ratios, along with your client’s eligibility.

Our Buy-to-Let mortgages at a glance

  • Terms: minimum term of 3 years and a maximum term of 35 years.
  • Lending limits: minimum £25,000 and maximum £3.5m.
  • Loan to value: maximum 75%.
  • Minimum purchase price: £50,000.

We accept 36-month Assured Shorthold Tenancies* (ASTs), Department of Social Security (DSS) tenancies, and tenancies where the property tenants will be in receipt of Housing Benefit or Housing payment as part of Universal Credit. ASTs (England & Wales) agreement will require a Private Residential Tenancy under the Private Housing (Tenancies) (Scotland) Act 2016 (Scotland).

What we don’t cover:

  • Multiple occupancy (HMOs); multi-unit blocks; bedsits; multiple tenancies (for example, a house / flat with a number of bedrooms occupied by individuals who share common facilities including the bathroom and kitchen).
  • Business partnerships or limited companies.
  • The Energy Performance Certificate (EPC) for the property shows a minimum rating below E.  We will also need to see a valid EPC of E or above at the time of application on the EPC register. 

Eligibility and criteria

Property requirements

The property must be:

  • in England, Scotland, Wales or Northern Ireland.
  • a residential property owned by the applicant(s) and not for their own use at any time.

Applicant requirements

The applicants must be:

  • UK natio­­­nals, EU nationals or have indefinite leave to remain in the UK. In the case of more than one applicant, at least one of the applicants must meet this requirement (please also see Foreign Nationals policy in the A-Z Criteria).
  • resident in the UK at the time of application.
  • at least 18 years old at the time of application .

Income

  • We have no minimum income requirement for Buy-to-Let applications.
  • The customer must pass the applicable Buy-to-Let  calculation and credit scoring process. Please see our Buy-to-Let affordability calculators.

Maximum age

  • Small landlord - the maximum age at the end of the term is 80.
  • Portfolio Landlords and non-owner occupiers – the maximum age at the end of the term is 80, providing they do not go into retirement.

Small landlord mortgages

**The following below criteria only applies to applications that are eligible for the respective calculators

Small landlords must own a UK residential home (or consent-to-let) but does not live in it due to living in tied-accommodation as part of their employment (eg armed forces, boarding school teacher, vicar/minister, estate worker).

Small landlord details at a glance

Small landlord applications:

Purchase, Remortgage Like-for-Like and Remortgage with additional borrowing

Portfolio Landlord Applications:

 

Remortgage Like-for-Like ONLY

Rental Cover Calculations

 

Purchase and Remortgage Additional Borrowing

 

Basic Rate Tax payer: 


Please use the calculator to get an indication on the available lend

 

125% @ 7.33% (5.95% for 5 year product)

Higher Rate Tax payer: 

 

*letting agents costs will be deducted from rental income for assessment (this will be requested on the calculator)

 

145% @ 7.33% (5.95% for 5 year product)

Remortgage Like-for-Like:

 

 

Basic Rate Tax payer: 

 

125% @ 6.27% (on all products)

Higher Rate Tax payer

 

135% @ 6.27% (on all products)

Important additional notes

To be able to simplify our proposition for Small landlords and Like-for-Like applications, we have removed the top-slicing ability for these types of application.

With lending based on Rental income only, LTI limits have been removed.

Portfolio landlords and non owner-occupier / first time buyer Buy to Lets

**The following below criteria only applies to applications that are eligible for the respective calculators

Eligibility and Application Types

Portfolio Landlord Application: Purchase and Remortgage with Additional Borrowing

First-time buyer First-time Landlord / Non-owner Occupier Applications:

 

Purchase, Remortgage Like-for-Like and Remortgage with additional borrowing (Small or Portfolio Landlords)

ICR Calculations:

Please note the client’s income will be used towards affordability, supplementing the total available lend, whilst factoring in commitments and residential mortgages.

 

135% @ 7.33% (5.95% for 5 year products)

 

Please use the calculator to get an indication on the available lend.

Important additional notes

Income evidence will be required on submission as part of standard packaging requirements.

Customer's income will be used towards affordability, supplementing the total available lend, whilst factoring in commitments, residential mortgages and background portfolio.

For First-Time buyer / Non-owner occupier applications: up to 4.95x client’s income (excluding any rental income)

For Portfolio Landlord applications: up to 4.99x client’s income (including gross rental of subject property and portfolio)

Packaging Requirements

For applications that pass on the small landlords and like-for-life remortgage calculator:

No income evidence or bank statements required on submission.

Brokers are still expected to keep a record of these as they may be requested as part of a review at a later date.

For applications that pass on the portfolio landlord and first time buyer Buy-to-Let calculator:

Full standard packaging requirements are needed.

For more information, please view our Packaging Guide.

Valuations

  • A physical valuation is required.
  • Rental income for the application will be based on the market rental as indicated on the valuation report or the rental received whichever is lower. 
  • Valuation service used to assess rental demand and rental income for all other properties being let, with the results used to validate an applicant’s portfolio.

Procuration Fees

DA Firms

45bps
gross

AR Firms

45bps
gross

Minimum

£250

Maximum

£20,000

FAQs

FAQs continued