Residential lending 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
£50,000.

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 £1,000,000 to 75% loan to value;
• £600,000 to 80% loan to value;
• £500,000 to 85% loan to value;
• £350,000 to 90% loan to value;
• £250,000 to 95% loan to value.

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

For retirement interest only lending the minimum repayment term is 5 years but there is no maximum repayment term. The mortgage must be repaid following a life event, including:

• death of the sole borrower or the surviving borrower for joint mortgages;
• sole borrower or surviving borrower for joint mortgages entering long-term residential care; or
• sale of the property.

Maximum number of applicants
Applications will be considered with up to four borrowers. All applicants incomes can now be considered for income multiples and affordability.

Minimum age
Minimum age of 18 years.

Maximum age
Standard underwriting applies up to age 70. Cases will be considered up to age 75 for self-employed applicants.
If the mortgage term takes the borrower’s beyond these limits, or where all applicants are retired, pension income may be considered subject to:

• Satisfactory evidence of company or private pension income;
• Retirement affordability calculation being carried out;
• Maximum 75% loan to value;
• In the case of joint names the clients must demonstrate that the loan is affordable upon the death of either borrower (transfer of pension rights considered or specific life policy to clear mortgage balance on death accepted); and
• Independent legal advice must be taken by the non-borrower in all cases where the mortgage is to be in a single name and the property is occupied jointly.

Residential status

Non-EEA applicants must have indefinite leave to reside in the UK.
Applicants must have lived in the UK for at least two years.

Married applicants
Applications are considered in a single name where an applicant is in a legally sanctioned relationship (i.e. married or in a civil partnership).
Single applicants’ income must be sufficient to support affordability for all occupants.

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

Family gifted deposit and concessionary purchase
Acceptable from an immediate family member. 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.

Accepted types
Repayment or interest only.

Interest only criteria
Maximum 75% loan to value. A completed interest only declaration will be required.
The designated repayment vehicle must have been in place 12 months before the date of the mortgage application.
Where the repayment vehicle is a pension, a maximum of 50% of the cash lump sum will be taken.
Not permitted on shared ownership or Family Assist lending.

Acceptable interest only repayment vehicles

• Endowment;
• ISA;
• Pension;
• Sale of second home/investment property (other conditions apply).

For retirement interest only mortgages, the loan must be repaid following a life event, including:

• death of the sole borrower or the surviving borrower for joint mortgages;
• sole borrower or surviving borrower for joint mortgages entering long-term residential care; or
• sale of the property.

Interest only sale of property

Available to customers who satisfy eligibility and:

• have a minimum of 40% equity in their current residential property or on remortgage will reduce the debt to a maximum of 60% LTV;
• require an interest only proposition and understand that on maturity of the mortgage the sale of the property is the repayment vehicle;
• can make overpayments of 10% per annum; 
• take independent legal advice so that they are absolutely clear about the repayment vehicle and the implications.

Part repayment and part interest only
Accepted.

Direct Debit
Payments to the mortgage are to be made monthly by Direct Debit from a bank account in the applicant’s name. Direct Debit mandates in company names are not acceptable.

Remortgage period
Property must have been owned for a minimum of 6 months.

Home improvements
Where the improvements exceed £20,000 or involve structural alterations, the advance will be restricted to 75% LTV 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
Restricted to 75% loan to value, however we can consider up to 90% loan to value to buy out a partner. 

Capital raising is allowed for any non-commercial reason. Subject to a maximum of £25k or 10% of the property value, whichever is the lower. Capital raising for business purposes is not allowed.

Debt consolidation
Restricted to 75% loan to value.
Debt consolidation cannot exceed 10% of the current valuation figure or £25,000 (whichever is the lower).
Debt consolidation cannot exceed 50% of the applicants’ total gross salary(ies).
Latest credit card statement(s), loan agreements are required to support application.
No previous history of debt consolidation.
Consolidation of tax, VAT, gambling debts or business debts will not be accepted.

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
None in the last three years.
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
The following policy applies:

• 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.
• Defaults over £500 will be considered on an individual basis.

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.

History
Maximum two month break of employment within last 12 months. We will also consider redundancy on a case by case basis. 

Document requirements
Latest P60 and last three months payslips.

Acceptable income
In addition to gross basic salary we will accept:

• 100% of guaranteed shift allowance;
• 100% of car allowance;
• 100% of any guaranteed overtime/bonus/commission;
• 50% of any regular overtime/bonus/commission.

Where the applicant is able to demonstrate a three year track record of regular overtime/bonus/commission with the same employer, 100% of the average gross earnings can be used to support the application.

Probation period
There is no requirement for applicants to have passed a probationary period in employment prior to completion. Exceptions will be made, where an applicant is in a probationary period for a new career change, and not a role they have past experience in.

Agency employment
We will consider zero hour contracts, where there is a clear track record of income. All cases will be assessed on a case by case basis.

Zero hours contracts
We will consider zero hour contracts, where there is a clear track record of income. All cases will be assessed on a case by case basis.

Seasonal employment
Not accepted.

Working for family business
Company accountant will be required to verify income and employment in addition to the standard requirements.

Sole traders/Partners
Minimum trading period two years.
Must be able to provide proof of income over a minimum period of 2 years. We can consider figures from the most recent accounts provided that they are audited accounts. Where a large increase in net profit is showing or we use a projection we will require confirmation from a suitably qualified accountant that this is not a one-off.
An accountants certificate will also be requested on application.
Income will be derived from the net profit figures.

Limited company directors
Minimum trading period two years.
If the applicant’s shareholding does not exceed 25% they will be classified as being an employee of the company.
If the applicant’s shareholding exceeds 25% they will be classified as being self-employed and must provide:

• Two years certified accounts, or two years HMRC self-assessment tax returns (SA302’s) with a tax year overview and three months business bank statements;
• An accountants certificate will also be requested on application
• Income will be derived from a combination of salary and dividends

Professional partnerships
Individuals employed in partnerships in the professions listed below are usually considered as having normal employed status. Income will be verified by a reference from the accountant, and copies of their accounts are not required to support the application.

• Medical doctors and surgeons
• Solicitors
• Barristers in chambers
• Veterinary surgeons
• Architects
• Accountants

Dentists
We will underwrite applications from self-employed dentists on the following criteria:

• The maximum mortgage amount cannot exceed £450,000;
• The maximum loan to value is 90%;
• Your client must have been employed by their current practice for a minimum of six months (monthly pay schedules to be provided);

We will require a Professional Partners reference from the Practice Principle confirming the Unit of Dental Activity target and your clients’ earnings to date.

We can consider applications where your client is employed by two practices, however they will be subject to Credit Committee approval.

Accountants qualifications
We will only accept accounts (and accountants references) from practitioners with one of the following qualifications:

• CA, ACA, FCA – Institute of Chartered Accountants;
• ACMA, FCMA – Chartered Institute of Management Accountants;
• ACCA, FCCA – Association of Chartered Certified Accountants;
• CIPFA – Chartered Institute of Public Finance and Accountancy;
• AAPA – Association of Authorised Public Accountants;
• ACAS, FCAS – Chartered Accountants of Scotland.

Occupancy
We will lend on properties that are the borrower’s main residence. Applications will also be accepted where the applicants are looking to purchase or remortgage either a second home or a property which will be let for short periods (no assured tenancy agreement in place).

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);
• Commonhold.

New build houses
Accepted up to maximum of 90% loan to value.

New build apartments
Accepted up to maximum of 90% LTV and subject to being within a block of no more than five storeys.

Right to Buy
Ex-local authority houses accepted.
Ex-local authority flats or maisonettes will be considered.
Accepted up to 100% of the discounted purchase price provided it does not exceed 75% of the valuation.
Additional borrowing (up to 75% loan to value) available for home improvements – estimates required on application.

Purchase under value/Concessionary purchase
Accepted up to maximum of 85% loan to value.
Only considered when the property is being purchased from an immediate family member.
The discount must be a minimum of 15% off the current market value and be a genuine discount.
The applicants do not need to provide any additional deposit.

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 frame with render cladding
• Solid stone
• SIPS (Structural insulated panels)
• Oak framed
• Steel framed construction
• Metal (zinc) roof
• Thatched roof
• Grade II listing.
• PRC repaired properties that have the benefit of a 30 year insurance-backed guarantee & structural warranty

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

• Flats or apartments in a block of more than five storeys;
• Freehold flats, apartments or maisonettes;
• Flats worth less than £50,000;
• Flats in Fenwood Croft, Tipton (unless already in mortgage);
• Flats above shops or commercial premises;
• Leasehold properties with less than 85 years remaining on the lease; and
• Any property for which the valuer is unable to confirm a ready resale market.

Any non-standard construction types, to include the following (full list of unacceptable property types available on request):

• Prefabricated buildings;
• Unrepaired PRC constructions;
• In situ poured concrete (often known as ‘Wimpey No Fines’);
• Steel framed constructions including Laing Easiform.

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).

Other acceptable property types

• Large properties with an annexe which is let out on an AST will be considered.
• Properties with up to 20 acres of land will be considered, where no agricultural ties apply.

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

• Last two years certified accounts or two years SA302’s (an accountants certificate will also be requested on application).

Additional documents (where applicable)

• Proof of deposit;
• Right to Buy notice;
• Home improvement estimates.