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Basic Mortgage Criteria

Lending area
Application accepted across England and Wales.
Properties located in Scotland, Northern Ireland or the Isle of Man will not be accepted.

Minimum mortgage amount
£100,000.

Minimum property valuation
£75,000 increasing to £250,000 for properties located within the M25 corridor.

Maximum mortgage amounts and loan to value limits

  • Maximum £500,000 to 70% loan to value;
  • Maximum £700,000 to 60% loan to value; and
  • Maximum £950,000 to 50% loan to value.

Mortgage terms
For standard lending the minimum term is 5 years and maximum term is 35 years.

We can lend up to your clients 85th birthday providing they are:

  • Currently in receipt of at least £20,000 income; and
  • Can evidence they will be in receipt of at least £20,000 income up to age 85.

 

Affordability criteria

Rental assessment

Experienced landlords and self-employed:

  • Basic rate tax payers will need a minimum rental coverage of 125% at a reference rate of 5.5% (or the applicable fixed rate if fixed for 5 years or longer).
  • Higher rate tax payers will need a minimum rental coverage of 130% at a reference rate of 5.5% (or the applicable fixed rate if fixed for 5 years or longer).

First time landlords:

  • Basic rate tax payers will need a minimum rental coverage of 140% at a reference rate of 5.5% (or the applicable fixed rate if fixed for 5 years or longer).
  • Higher rate tax payers will need a minimum rental coverage of 145% at a reference rate of 5.5% (or the applicable fixed rate if fixed for 5 years or longer).

Limited companies:

  • A minimum rental coverage of 125% at a reference rate of 5.5% (or the applicable fixed rate if fixed for 5 years or longer).

Minimum income
The minimum income is £20,000.

For self-employed professional landlords, rental income can be accepted as a suitable source of income.

For all other landlord types, the minimum income requirement excludes rental income.

In the case of joint applications, at least one applicant must be in permanent full time employment or self-employment or be in receipt of private personal pension income (if retired), at the date of application.

Tenancy Types

Acceptable tenancy types
Assured shorthold tenancy with a maximum 24 month tenancy agreement.

Unacceptable tenancy types
• Sub-letting;
• Student let;
• Corporate let;
• Multiple occupancy;
• Local authority tenants;
• Assured tenancy;
• Regulated tenancy; and
• Persons with diplomatic immunity.

Acceptable repayment methods

Accepted types
Repayment or interest only.

Interest only criteria
Proof of repayment plan is not required.

Part repayment and part interest only
Accepted.

Direct Debit
Payments to the mortgage are to be made monthly by Direct Debit.

Acceptable Deposit Criteria

Family gifted deposit and concessionary purchase
Acceptable from an immediate family member, provided the funds are not being given as a loan and there is no obligation to repay the gifted amount. An immediate family member is defined as a spouse, parent, grandparent, sibling or child.

Builder’s gifted incentive
For new-build properties, we will accept a builder gifted incentive of up to 5% of the lower of purchase price or valuation to be deducted from the loan amount.

The applicant must still provide a minimum 5% deposit from their own resources.

For incentives greater than 5%, the excess will be deducted from the purchase price.

Vendor gifted deposit
Not accepted.

Credit status criteria

Credit search
A credit search will be carried out using an approved Credit Reference Agency.

Bankruptcy/IVA
Must be discharged/satisfied for a minimum of six years prior to application.
Trustee in Bankruptcy must confirm that there are no further claims against the applicant.
Subject to 100% subsequent record of prudent financial management.

CCJ’s
There must be none in the last three years.
Any that have been registered and satisfied more than three years ago, will be considered, subject to a maximum three CCJ’s to a total value of £500.

Defaults
A maximum of three defaults per application, to a total value of £500, satisfied 3 months prior to application will be considered subject to a satisfactory explanation.

Mortgage repossession
Not accepted.

Mortgage arrears
Maximum two missed payments within the last two years may be considered, subject to satisfactory explanation.

Late payments
Within last two years late payments on a credit agreement cannot exceed ‘2’ at any point. (e.g. ‘1’ or a ‘2’ on a credit agreement will be considered but a ‘3’ within the last two years will not be accepted).

Payday loans
Payday loans taken out and fully repaid more than 12 months prior to application may be considered.

Property type criteria

Property exposure limits
We will consider the overall exposure by applicant, geographical location and development when assessing applications.

Exposure limits per applicant include properties held with other lenders.

Tenure
The following are acceptable property tenures:

  • Freehold (excluding flats and maisonettes);
  • Leasehold (minimum 85 year unexpired term on completion and 60 years at the end of the mortgage term);
  • Flying Freehold (specific to access between two properties); and
  • Commonhold.

Flats and apartments

We will lend on flats or apartments up to four storey. Please note, basements will count towards this total.
Flats or apartments in blocks of five or six storey may be considered on an individual basis.

New Build Properties

Will consider applications for new build houses up to 90% LTV. 

New build flats (including 1 bed flat) will be considered up to 85% LTV.

Construction type
Standard construction only.

Properties must be of brick or stone wall with a tiled or slated roof with the exception of the following which will also be considered subject to valuation:

  • Timber framed walls with brick cladding;
  • Thatched roof properties;
  • Grade 2 listed (subject to valuer’s comments); and
  • PRC repaired properties that have the benefit of a 30 year insurance-backed guarantee and structural warranty. 

Unacceptable property types
The following is a list of unacceptable property types:

  • Ex-local authority flats or maisonettes;
  • Flats or apartments in a block of more than six storeys;
  • Flats above any commercial properties;
  • Freehold flats or maisonettes;
  • Any properties with a restrictive covenant (e.g. retirement homes);
  • Any property with an invasive plant species infestation;
  • Any property within a licensed or selective licensed area;
  • Self-build properties;
  • Second home;
  • Shared Equity;
  • Any non-standard construction types, to include the following (full list of unacceptable property types available on request):
  • Prefabricated buildings;
  • Unrepaired or repaired PRC constructions;
  • In situ poured concrete (often known as ‘Wimpey No Fines’);
  • Steel framed constructions including Laing Easiform.

Unacceptable materials 

For buildings of four storeys or fewer:

  • Aluminum Composite Material
  • Metal Composite Material
  • High-Pressure Laminate panels

For buildings of five or six storeys:

  • Significant cladding
  • Aluminum Composite Material
  • Metal Composite Material
  • High-Pressure Laminate panels
  • Balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials
  • The decking is constructed with combustible materials and the balconies are directly linked by combustible materials

Valuation
All properties subject to valuation instructed by us, pre-prepared valuations are not accepted.

A table detailing our valuation fee scale can be viewed on our mortgage valuation charges page.

Minimum property valuation
£75,000 (increasing to £250,000 for properties located within the M25 corridor).

 

Acceptable Applicant Criteria

Consumer buy to let
Accepted. You must have the required permissions of Principle to carry out consumer buy to let business.

Maximum number of applicants
Applications will be considered with up to four borrowers

Minimum age
Minimum age of 21 years.

Maximum age
The term must not extend beyond the oldest borrower’s 85th birthday.

Residential status

Applicants from EU Countries are required to have a settled status. Any with pre-settled status will not be considered. 

Non-EEA applicants must provide a passport together with a valid visa that gives indefinite leave to reside in the UK.

Applicants must have lived in the UK for at least two years and must have owned a property in the UK.

Inter-family transactions
Not accepted.

Seafarers
Seafarers will be considered on a case by case basis.

Acceptable landlord types

Self-employed professional landlords
Accepted.

Consumer buy to let
Accepted. You must have the required permissions of Principle to carry out consumer buy to let business.

Experienced landlords
Accepted. Must currently hold, or have held during the previous 12 months, at least one property on a BTL basis.

First time landlords
Accepted. Applicant’s main residential property must be the highest valued property asset. Applications where all borrowers are first time buyers will not be considered.

A first time landlord is defined as any landlord that has not held a property on a BTL basis during the previous 12 months.

Limited companies
We will accept applications from limited companies, provided they satisfy the below criteria:

  • All Directors and Shareholders must be aged 21 or over and provide a personal guarantee for the loan;
  • The maximum number of directors is 4;
  • Term cannot extend past the eldest directors 85th birthday;
  • Maximum term of 35 years;
  • Minimum £20,000 income applies;
  • The company must have one or more of the following SIC codes - 68100 (buying and selling of own real estate), 68209 (other letting and operating of own or leased real estate), or 68320 (management of real estate on a fee or contract basis); and
  • Portfolio landlords are not accepted, the maximum holding per director is no more than 3 buy-to-let properties in mortgage, including the property mortgaged to the Society.

Remortgage application criteria

Remortgage period
Property must have been owned for a minimum of 6 months and must be an existing buy to let. Property cannot be let to a family member.

Home improvements
Where the improvements exceed £20,000 or involve structural alterations, the advance will be restricted to 70% loan to value at each stage, until final completion of the works. Stage payments will be subject to a re-inspection at the appropriate fee. Estimates are required to support application.

Capital raising
The maximum loan amount, including any aspect of capital raising cannot exceed 70% LTV. Must be used for home improvements of the property to be mortgaged or another property held in a Tipton & Coseley portfolio or to fund the purchase of a further buy to let property or to raise the deposit for a residential property purchase where the current residential property will either become a buy to let or will be sold on completion.

Property portfolios

Tipton & Coseley portfolios
There is no limit on the number of buy to let properties held, however a we restrict to a maximum of three mortgaged properties and a maximum overall exposure, including residential owner occupier borrowing, of the applicant(s) to the Society of £1million.

Portfolios held with other lenders
No specific limit on portfolio size subject to a maximum of three properties held in mortgage. Each application assessed individually with overall portfolio size part of this assessment.

Rental coverage
Minimum rental coverage of 140% across the existing portfolio.

Applicant income criteria

Employed Applicants - Document requirements
Latest P60 and last three months payslips.

Self-Employed Applicants & Professional landlords

Minimum two years trading as a professional landlord.
Previous two years HMRC self-assessment tax return (SA302) and tax year overview

Last six months income fed bank statements.

Sole traders/Partners
Latest two years certified accounts, or latest two years HMRC self-assessment tax return (SA302) and corresponding tax year overview.

Last six months income fed bank statements.
Income will be derived from the net profit figures or income confirmed on SA302’s.

Sub-contractors
Reference required from contractor which confirms start date, weekly earnings and that the services of the sub-contractor will continue for the foreseeable future.

Last six months income fed bank statements.

Limited company directors
If the applicant’s shareholding does not exceed 25% they will be classified as being an employee of the company and the employed applicants criteria will apply.

If the applicant’s shareholding exceeds 25% they will be classified as being self-employed and the Society will require the latest two years certified accounts, or latest two years HMRC self-assessment tax return (SA302) and corresponding tax year overview.

Last six months income fed bank statements.

Retired Applicant Criteria
Retired applicants must be in receipt of personal/company pension.
State pension will be considered but only as a secondary income source.

Verification
Income will be verified via the latest pension statement or P60.

Properties with Adverse Coal Authority Report

Coal Authority Reports
Applications on properties with an adverse Coal Authority Report will be considered for mortgage subject to normal underwriting terms and a satisfactory valuation report.

Please forward a copy of the Coal Authority Report prior to application for further consideration.

Procuration fees are not paid on properties with an adverse Coal Authority Report.

Solicitors

Panel
To be considered they must have a minimum of two partners in the firm, be registered on the Law Society of England & Wales website, and hold the Conveyancing Quality Scheme (CQS).

Free legal fees
Where we offer free standard legal fees through our nominated solicitor, this is restricted to the costs of the legal work necessary to move the mortgage to us. Costs incurred for any additional work must be paid by the applicants.

Supporting documents

Acceptable proof of identification

  • Certified copies of the following are acceptable:
  • A current signed passport;
  • A current photocard driving licence (full or provisional);
  • A national identity card (not including ID cards issued to UK citizens);
  • A valid old style UK driving licence;
  • Recent evidence of entitlement to a state or local authority funded benefit (including housing benefit and council tax benefit), tax credit, pension, educational or other grant;
  • A firearms certificate or shotgun licence.

Acceptable proof of residence
Minimum three years proof of residency.

The following items are acceptable if the applicant is not listed on the electoral register at any point during the last three years:

  • A current photocard driving licence (full or provisional);
  • A firearms certificate or shotgun licence;
  • A valid old style UK driving licence;
  • Recent evidence of entitlement to a state or local authority funded benefit (including housing benefit and council tax benefit), tax credit, pension, educational or other grant;
  • Instrument of a court appointment (such as liquidator, or grant of probate);
  • Current council tax demand letter or statement (no more than three months old);
  • Current bank or building society statement or passbook issued by a regulated financial sector firm in the UK, EU or comparable jurisdiction (we cannot accept any documents printed from the internet and they must be no more than three months old);
  • Utility bill (recording the company that issued the bill and date of issue. We will not accept any printed from the internet and they must be no more than three months old);
  • Inland revenue PAYE coding notice (P2) - current year or Inland Revenue Statement of Account - current tax year.

Mandatory requirements

  • Last three months consecutive bank statements.
  • Last three months consecutive payslips and most recent P60.

OR

  • Latest certified accounts or SA302 and income fed bank statements.

Additional documents (where applicable)
Proof of deposit.

Schedule of buy to let portfolio including:

  • Property address;
  • Date of purchase;
  • Purchase price:
  • Tenancy type;
  • Monthly rental income;
  • Current property valuation;
  • Balance outstanding;
  • Name of lender; and
  • Lender reference number.

Shorthold tenancy agreement for the proposed property.
Letter confirming anticipated rental income from:

  • Residential Landlords Association (RLA);
  • Association of Residential Letting Agents (ARLA); or
  • National Landlords Association (NLA).

Validation of anticipated rental income will be confirmed on valuation. Home improvement estimates.