Criteria & Packaging Guide
Our lending criteria at a glance and a comprehensive packaging guide
Everything you need to know
We have two sets of lending criteria at Barclays – residential and buy to let. To make it easier to find what you’re looking for, we’ve listed our criteria details in alphabetical order.
Our lending criteria at a glance and a comprehensive packaging guide
Figure out how much your buy-to-let clients could borrow.
Find more information about registering with us, client applications and submitted cases.
Whilst Barclays do not offer Ltd Company BTL mortgages, Kensington Mortgages, a subsidiary of Barclays Bank UK PLC does. Learn more in the special purpose vehicle (SPV) limited company section of our A-Z criteria.
Buy to let A-Z
A-C
Existing Buy to Let mortgage customers must always be treated as a new lending proposition. They are assessed and under written on the basis of the aggregate borrowing/overall exposure. The applicant must always complete the appropriate application and detail the purpose of the borrowing.
For further information, details of products and fees payable please contact our Intermediary Mortgage Experts Centre on 0345 073 3330 - Monday to Friday, 9am to 5pm.
County Court Judgements (CCJs/defaults)
Adverse credit as detailed below must be declined:
*Includes partially settled defaults which will be referred out to check whether full and final settlement has been made.
Applications can be considered where the above is identified but only where documentary evidence of a settled dispute has been provided by the customer.
Bankruptcy/Debt Relief Orders/IVAs
Lending to a customer with a history of bankruptcy or who has been the subject of a Debt Relief Order (DRO) or an Individual Voluntary Arrangement (IVA) can be considered, provided any bankruptcy, DRO or IVA was registered more than 6 years prior to the date of submission of any mortgage application and no longer shows on the credit reference bureau information.
It is not acceptable to lend if we are aware that any applicant is currently bankrupt or subject to a DRO or IVA.
Payment arrears/missed payments
Any adverse credit identified, as detailed below, must be declined
Payment arrangements:
If payment arrangements are identified in the credit search that are still running or have ended less than 1 year prior to the time of application, the case must be declined.
Mortgage or rent arrears
If arrears of more than one month have occurred in the past 6 months or 3 months' arrears have occurred in the past 2 years, the case is outside lending policy and is to be declined. However, this decision could be changed if there is an acceptable 'technical' reason, or if evidence of a settled dispute is provided and verified by the lender.
If this is the case, please contact our Intermediary Mortgage Experts on 0345 073 3330 - Monday to Friday, 9am to 5pm.
Any applicant who is known to have had any mortgaged property repossessed should normally be declined. However, where historic, underwriters can consider such mortgage requests, provided clear rationale is provided to support any lending decision.
Bankruptcy/IVA
It is not acceptable to lend where any applicant is currently bankrupt or subject to a Debt Relief Order (DRO) and/or Individual Voluntary Arrangement (IVA) however, lending can be considered provided any bankruptcy, DRO or IVA was registered more than 6 years ago from the date of submission (and hence no longer appears on the credit reference bureau information).
If your client has a more complex credit history?
You may wish to visit Kensington Mortgages, one of the UK’s leading specialist lenders and a subsidiary of Barclays Bank UK PLC. Kensington offer more flexible lending criteria to help people who may not meet typical lending requirements. Learn more.
Barclays uses 1 of 2 methods to calculate affordability. Applications for customers that meet the following criteria will initially be assessed on an Interest Coverage Ratio (ICR)
Basic Rate Taxpayers – 125%
Higher/Additional Rate Taxpayers – 160%
The income tax band selected should take into account gross rental income for all properties that the applicant will own on completion.
For Limited Company Directors please use their highest tax band payable to ensure all income is included. For more information on income tax bands please visit https://www.gov.uk/income-tax-rates
If the application does not meet ICR eligibility, applicants are required to pass a full personal solvency and affordability test which includes earned and rental income, income tax liability (including BTL mortgage interest relief), credit commitments including residential mortgage payment, existing and applied for BTL mortgage payment, other costs associated with the rental property, essential expenditure and living costs. In all instances, you should check client affordability prior to submitting a case by completing the BTL affordability calculator.
Full details must be input in MAX including all outstanding residential and/or other Buy to Let mortgages. A maximum of 4 applicants will be assessed if an affordability assessment is required, although we only consider the 2 highest incomes.
NOTE: For further advance borrowing, the affordability rate current at the time of assessment must be applied to the total borrowing after accounting for any increase in lending.
BTL applications in a sole name, which fail solvency, can be considered where a joint residential mortgage – with no evidence of arrears history – is held by Barclays.
Where the term goes into retirement, or the applicant is retired on submission of the BTL application, it is acceptable under standard BTL lending policy providing the following criteria is satisfied:
Maximum aggregate borrowing across all Barclays BTLs is £3m. Maximum aggregate Buy to Let borrowing with Barclays AND other lenders must not exceed £4.5M in total. The maximum number of mortgaged BTL/PTL properties held must not exceed 6 with Barclays and must not exceed 10 across all lenders (including Barclays). This includes the subject (applied for) property.
Landlords with 4 mortgaged rental properties or more, across all lenders, are classed as portfolio landlords. This includes the subject (applied for) property.
Your applicant must have a minimum gross annual income of £25,000. For joint applications, at least one applicant must earn £25,000.
For individual loans above £1m a minimum gross annual personal/earned income of £75,000 per annum is required (for joint applications, the two primary applicants must earn £100,000 where neither applicant earns £75,000).
Gross income can be made up from the following:
Allowable Income Types |
% Allowable |
Acceptable Evidence |
PAYE: Basic income |
100% |
Latest months’ payslips (or 5 consecutive payslips if paid weekly). |
PAYE: TAXABLE ALLOWANCES e.g. Mortgage subsidy / Car allowance / Shift allowance/ Large Town allowance |
100% |
Latest months’ payslip if paid monthly (5 consecutive payslips if paid weekly). |
PAYE: OVERTIME COMMISION AND BONUS paid monthly (or more frequently) |
50% |
Latest 3 months’ payslips( 5 consecutive payslips if paid weekly) AND Corresponding latest full month’s bank statement (if requested) Please note where amount vary, we will use the average value as a primary income. |
>50% up to 100% (Where sustainability can be evidenced by latest P60) |
Latest 3 months’ payslips( 5 consecutive payslips if paid weekly) AND Corresponding latest full month’s bank statement (if requested) AND Note: If >50% of an applicant’s 3-month average BOC is required, the lower of the following will be used in the affordability and LTI assessment (subject to cap at 100% basic salary plus allowances):
|
|
PAYE: ANNUAL/ QUARTERLY BONUS (or paid less frequently than monthly) |
50% |
Previous 2 years’ individual payslips showing bonus payments Or Latest 2 years’ P60s Or HMRC Annual Tax Summary Or Latest 2 years’ Tax Year End payslips (showing total income) – normally March. |
SELF-EMPLOYED: Sole trader/ general partnership |
100% |
Latest 2 years’ HMRC Tax Assessments (SA302) or Tax Calculations AND Latest 2 years’ tax year overviews. |
SELF EMPLOYED: Limited Company shareholder |
100% |
Latest 2 years’ HMRC Tax Assessments (SA302) or Tax Calculations AND Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts). AND Most recent year’s trading accounts produced by a qualified Accountant (dated within 18 months of the application start date). Underwriters can accept unsigned accounts by verifying the accounts through Companies House. Note: Limited company shareholder directors with income taxed at source ONLY (PAYE), with not further tax to pay, are not required to provide tax calculations or tax year overviews, provided their annual earnings do not exceed £100,000. To validate the income, we require all of the following:
|
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
<1 year* (Applicant has not been partner long enough to have completed a tax return reflecting one full year as partner)
|
100% |
Employed/Self-employed previously: The latest partnership agreement/ contract AND The most recent full month’s bank statement evidencing income AND A P60 reflecting PAYE income for the most recent full tax year OR (For Self-Employed only) Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts). |
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
1-2 years* (Applicant has completed one tax return reflecting one full year as partner) |
100% |
Employed/ Self-employed previously: Latest HMRC Tax assessments (SA302) or tax calculation* AND Latest tax year overview AND The latest partnership agreement/ contract. |
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
>2 years (Applicant has completed at least two tax returns reflecting at least two full years as partner) |
100% |
Employed/Self-employed previously: Latest 2 years’ HMRC Tax Assessments (SA302) or tax calculation* AND Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts). Overseas profit If the applicant is an equity partner in a LLP with overseas profit where the income/ profit share attributable to the applicant from the overseas profit is required for affordability purposes then, provided the overseas profit is remunerated in Sterling with no exchange from any foreign currency, this income can be considered. To evidence this information, the letter from the Finance Director/ senior partner, mentioned above must also confirm the following: How long the applicant has been a partner in the firm Applicant’s level of income Jurisdiction where the applicant is based That the applicant is contracted and remunerated in sterling. |
FOSTER INCOME |
100% |
Latest 2 years’ Local authority statements or equivalent (latest issued no longer than 18 month prior to application) OR A letter from the foster agency confirming the total foster income received for each of the last two years and latest 3 months’ bank statements. NOTE: Care: Assessment required of sustainability and continued affordability over the term. Children under care must be recorded as financial dependents for affordability purposes. |
INCOME FROM FIXED-TERM CONTRACTS (CONTRACTORS) |
100% |
Umbrella company (PAYE) Most recent contract(s) covering a 12 month-period AND Latest 3 months’ payslips (5 consecutive payslips if paid weekly).
Note: Applicants employed in professional roles where contracts are provided on a fixed term basis, but each contract rolls to the next placement and so the overarching employment does not change (i.e. Junior Doctors, Teachers, Junior Solicitors), should be keyed as employed. These roles will all receive a salary. |
UNEARNED INCOME E.G. FROM INVESTMENTS OR TRUST FUNDS ETC. WHICH ARE FREE FROM ENCUMBRANCES |
100% |
Latest 3 months’ consecutive bank or building society statements confirming receipt of income AND Evidence of the source e.g. portfolio of stocks and shares AND Letter from qualified accountant confirming income for last 6 months in addition to advising source, that there are no encumbrances and that the income covers the term of the proposed mortgage AND Corresponding Tax Calculation. Care: assessment required of sustainability and continued affordability over the term. |
MAINTENANCE PAYMENTS |
100% |
Court Order OR CSA/Child Maintenance Service Arrangement OR Latest 3 months’ consecutive bank or building society statements confirming receipt of income. Care: assessment required of sustainability and continued affordability over the term. |
WORKING TAX CREDITS |
100% |
HMRC tax credit award letter (all pages) AND Latest full months bank statements clearly identifying the source of the income. |
CHILD TAX CREDITS |
100%* |
HMRC tax credit award letter (all pages) AND Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 13 or over. |
CHILD BENEFIT |
100%* |
DWP child benefit letter (all pages) OR Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 13 or over or highest earning applicant has a gross income of £60,000 or more. |
SCOTTISH CHILD PAYMENT |
100%* |
Social Security Scotland letter (all pages) OR Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 11 or over. |
UNIVERSAL CREDIT (UC) |
100%* |
3 months’ Universal Credit (UC) statements (printed online statements acceptable) AND Latest full months bank statements clearly identifying the source of the income. *Care: The following elements of Universal Credit are not considered sustainable income and should be deducted from the total amount received (if this results in a negative amount then no Universal Credit should be recorded):
Note: Income evidenced as being received in the form of Universal Credit payments for an applicant can only be considered where this is clear evidence of receipt of another form of allowable gross income for that applicant. Where amounts vary, we will use the average value however, care should be taken to understand if the amount of UC payable has reduced permanently as a result of means testing (i.e. due to the customer’s earned income increasing) in which case the lower amount should be used. Where a joint UC statement is provided as evidence of income and not all of those named on the joint statement are also party to the mortgage application, the additional evidence must be provided to clearly identify the portion of that income attributable to the mortgage applicant(s). Disability benefits must be in the name of the mortgage applicant in order to be considered however, if the disability benefit income paid to the mortgage applicant is for the benefit of the applicant’s dependent(s), then this cannot be considered as part of the affordability assessment. |
DISCRETIONARY MORTGAGE SUBSIDIES AND HOUSING ALLOWANCE |
100% |
Contract of employment. Care: assessment required of sustainability and continued affordability over the term. Restricted term subsidies may only be considered as a secondary income subject to a minimum term of five years. |
UK STATE PENSION (CURRENTLY RECEIVING) |
100% |
Latest full months bank statement clearly identifying the source of the income as state pension OR Proof of benefit letter. |
DISABILITY / STATE BENEFITS |
100% |
Latest DWP Benefits Statement AND Latest full months bank statements clearly identifying the source of the income. Allowable benefits:
Care: Disability benefits must be in the name of the mortgage applicant in order to be considered however, if the disability benefit income paid to the mortgage applicant is for the benefit of the applicant’s dependent(s), then this cannot be considered as part of the affordability assessment. |
PERMANENT INCOME POTECTION PAYMENTS |
100% |
Policy statement clearly laying out pay-out schedule and amounts. 100% received net of tax and should be treated as such in assessing affordability. “Grossing-up” calculations may be conducted to ascertain an equivalent Loan to Income multiple to be used in the assessment). Care: assessment required of sustainability and continued affordability over the term. |
PERSONAL AND WORKPLACE PENSIONS AND ANNUITIES* (CURRENTLY RECEIVING) |
100% |
Latest full months bank statement clearly identifying the source of the income AND One of the following:
Note: Pension statements and annuity letters may not be handwritten or amended and must:
Pension statements (Private/Company/State) must: Show regularity of payment
*Note: Drawdown from a Self-Invested Personal Pension (SIPP) is not an acceptable income. |
PENSIONS (NOT YET RECEIVING) E.G. WHEN PROPOSAL TAKES APPLICANT PAST THEIR STATED RETIREMENT AGE. |
100% |
Statements from the organisation providing the pension confirming both the projected pension income and the assumed normal retirement date OR FCA regulated letter from the Scheme Administrator. |
Acceptable borrowers
Unacceptable borrowers
Mortgages can be held in a mix of borrower types, for example
Borrower types based on mortgaged rental properties
Where BTL mortgages are a mix of borrower types, the maximum aggregate applies across all of our BTL mortgages, regardless of the borrower type. Borrowing types can’t be mixed on individual mortgages.
Any new lending to existing SPV/LLPs is limited to further advance and transfer of equity only.
Guarantors
We do not accept guarantors. All clients must meet our personal status/covenant requirements. Full supporting Personal Guarantees are required from all directors/shareholders of a SPV Limited Company and from all members of a LLP. Any new lending to existing SPV/LLPs is limited to further advance and transfer of equity only.
Documentation
P60 will be needed where more than 50% of the most recent 3 monthly average is needed to meet affordability.
Monthly Bonus
Identify if monthly* bonus is on the most recent 3 month’s* payslips
We'll never use less than 50% of the most recent 3 months' average
Average the total monthly bonus amounts from the last 3 month’s* payslips and use the same payslips to compare the annualised figure against the P60
You'll need to deduct the salary, allowances and any bonus payments that are less frequent than monthly (or more) when reviewing a P60 and calculating the monthly bonus
The remaining figure should then be divided by 12 to show the monthly average from the P60
Take the lower of the following 2 figures (unless the minimum 50% applies)
*If frequency of pay is not monthly (e.g. bi weekly / 4 weekly / weekly), Please see weekly, 2-weekly or 4-weekly section below.
Annual Bonus
You'll need to use the gross (pre-tax) bonus figure when calculating your customer's bonuses.
* See Monthly Bonus section for further details
Note - Your customer is not required to have been with the same employer for 2 years, however, the most recent annual bonus must have been paid by their current employer and, in all cases, must have been paid within the last 12 months. An annual bonus can be considered where it has only been paid in the most recent year.
Payslips
The number of payslips required is dependent on the frequency of the bonus. We need evidence of their annual bonus over the last 2 years.
Note - You can use the payslips to show annual bonuses over the last 2 years (We don’t need P60s to validate, and we require no additional calculations).
P60s
Where your customer can’t provide the required payslips, we need to confirm the annual bonus is sustainable using the last 2 years P60s.
P60’s are only acceptable where the customer is not also in receipt of regular bonus, overtime or commission.
Obtain the P60s to confirm bonus over the last 2 years.
Calculate the annual bonus figure for both years
If the latest years bonus figure is lower than the previous years, you can only use the latest years figure. If it is higher than the previous years you can use an average of the two years
Calculate Overtime or commission
Identify if monthly* overtime/commission is showing on at least 1 of the most recent 3 month’s* payslips
Average the total monthly* overtime/commission amounts from the last 3 month’s* payslips and use the same payslips to compare the annualised figure against the P60
You'll need to deduct the salary, allowances and any bonus payments that are less frequent than monthly (or more) when reviewing a P60 and calculating the monthly overtime/commission
The remaining figure should then be divided by 12 to show the monthly average from the P60
Take the lower of the following 2 figures (unless the minimum 50% applies)
**If frequency of pay is not monthly (e.g. bi weekly / 4 weekly / weekly), see ‘weekly, 2-weekly or 4-weekly’ section below
Examples
Example 1 (evidenced on 3 consecutive most recent payslips)
Basic = £20,000 - Monthly bonus (average over last 3 months) = £1,000 - P60 Total income = £23,000
Bonus amount (P60 value) = £3,000 (divided by 12 = £250 per month)
Monthly bonus Figure to use = £500 per month
Decision - As the P60 monthly average value after basic salary is deducted is less than 50% of the latest 3 payslips, the figure added to application is £500 per month (50% current average monthly bonus = £1,000 x 50%)
Example 2 (evidenced on at least 1 out of 3 recent payslips)
Basic annual income = £20,000 - Monthly overtime (average over last 3 months) = £1,000 per month - P60 Total annual income = £29,000
Less Basic annual income = £20,000
Overtime amount (P60 average value) = £9,000 (divided by 12 = £750 per month)
Overtime Figure to use = £750 per month
Decision - As the P60 monthly average value after basic salary is deducted is lower than 100% of the average of the latest 3 payslips, the figure added to MAX is £750 per month (use the lower of the 2 averages)
Example 3 (evidenced on at least 1 out of 3 recent payslips)
Basic annual income = £20,000 - Commission (average over last 3 months) = £1,000 per month - P60 Total annual income = £38,000
Less Basic annual income = £20,000
Commission amount (P60 average value) = £18,000 (divided by 12 = £1,500 per month)
Commission Figure to use = £1,000
Decision - As the P60 monthly average value after basic salary is deducted is higher than 100% of average of the latest 3 payslips, the figure added to MAX is £1,000 per month (use the lower of the 2 averages)
If income |
Then* |
Monthly | Use latest month’s payslip figure |
4-weekly |
|
2-weekly |
|
Weekly |
|
Applications from your client to purchase properties in their own personal name from a Limited Company where they have a financial controlling interest are outside our standard lending criteria.
Applications for customers that meet the following criteria will initially be assessed on an Interest Coverage Ratio (ICR)
The cover required will be dependent on the customers income tax band. The gross rental income, confirmed by the valuer, must cover a stressed monthly mortgage interest payment by at least –
Basic Rate Taxpayers – 125%
Higher/Additional Rate Taxpayers – 160%
If application does not meet eligibility, applicants are required to pass a full personal solvency and affordability test.
In all instances, you should check client affordability prior to submitting a case by completing the BTL affordability calculator.
The following commitments must be considered.
Other Considerations:
Our policy on applicants who are contractors depends on if they are working on an employed or self-employed basis.
Applicants employed in professional roles where contracts are provided on a fixed term basis, but each contract rolls to the next placement and so the overarching employment does not change (i.e. Junior Doctors, Teachers, Junior Solicitors), should be keyed as employed. These roles will all receive a salary.
All contractors
Umbrella, Agency or Fixed Term contractors
The following policy applies to contract workers who are employed on a PAYE basis (e.g. via an umbrella company or agency): Income is calculated on an employed basis using 3 months’ (or equivalent) pay slips, and taking an average where necessary, any holiday pay received is included within the average. Where the customer has any form of variable pay or bonus this should be calculated using employed policy.
Applications for contractors in occupations such as professional sport will be assessed on a case-by-case basis to check for sustainability and plausibility. By recording these types of customer on the application as ‘Employed - Fixed Term Contract’ this will ensure these checks can take place.
Self-employed contractors
For contract workers operating on a self-employed basis affordability calculations will depend on how their business is structured. Where ALL of the following additional requirements are met a daily rate calculation may be applied
Daily-rate calculation
To calculate gross income, you will
If the contract expresses pay as an hourly-rate, then the applicant’s income should be calculated on the assumption there are a maximum of 40 working hours per week, unless the contract or the applicant specifies a lower number of hours. The resulting weekly amount should then be multiplied by 46 working weeks to arrive at the gross annual income for affordability purposes.
Additional commitments (where daily-rate is used) - When the ‘daily-rate calculation’ is being used; credit commitments for which the limited company is liable/responsible (e.g. business loans, including ‘bounce back loans’) should be recorded within the application and considered as part of the overall affordability assessment. On the application, the monthly payment should be entered as shown on the business bank statements, the outstanding balance detailed as £1 and the remaining term as 1y 0m.
The following additional documents are required if the ‘daily-rate calculation’ is being applied
All contractors using the daily rate should be recorded on the application as ‘Employed - Fixed Term Contract’.
Contractors not employed via an umbrella or agency or that do not meet the daily rate criteria must document income following our self-employed policy. Please refer to our self-employed and allowable income sections for further details.
A full personal credit check will be undertaken on each applicant, director, shareholder, or member. In addition a company search will be carried out on all SPV Limited Companies and LLPs to confirm that they continue to meet our acceptable definition of a SPV Limited Company or LLP and that there have been no changes to the structure eg, change of directors/shareholders/members.
If it is identified that a limited company, in which an applicant has greater than 15% shareholding, has any outstanding judgments totaling more than £5,000.
D-K
First time landlords are eligible to purchase a Barclays Buy-to-Let Mortgages even if the applicant does not have any type of mortgage, do not own any background property or experience.
Further advances can be considered for the following purposes only
NOTE: It is NOT acceptable for a further advance to be used for any purpose other than those listed above
Applications will be considered for further advances subject to the following requirements being met in ALL cases
On joint mortgage applications where there is any additional borrowing or equity release in excess of £50,000 and this is to be for the benefit of one party to the mortgage only (eg purchase of a second/BTL property to be registered in the name of one party), Independent Legal Advice must be obtained by all other borrowers not directly benefiting before any funds are released
When submitting applications for equity release on unencumbered properties, a certified copy of the customer’s proof of identity documentation must be submitted
For further information, details of products and fees payable please contact our Intermediary Mortgage Experts Centre on 0345 073 3330 - Monday to Friday, 9am to 5pm.
The home must be a new build and have an energy efficiency rating of 81 or higher, or be energy efficiency band A or B. There’s no other specific eligibility criteria, and the application process is the same as with any other purchase, but applicants will need one of the following to prove the property’s energy efficiency rating
House builders can verbally confirm the property’s energy efficiency rating straight away, and applicants can use this to progress their application. They’ll still need to send us an eligible EPC or PEA, and should aim to do this as soon as possible. We won’t be able to complete their mortgage without one of these documents.
To find out more, take a look at our lending criteria
A House in Multiple Occupation (HMO) is acceptable provided it is not subject to any form of licensing by the Local Authority. Where there is any doubt as to the licensing requirement of a BTL property, written confirmation from the appropriate Local Authority will be requested. If your client would like more information on HMOs and licensing they can visit www.communities.gov.uk/housing or speak to their Local Authority.
Where an existing client applies for further borrowing on a property which now requires licensing, consideration may be given to the request providing that the monies are to be used for the following circumstances only:
A certified copy of the licence from the Local Authority must be submitted with the application where it is currently held or alternatively provided by the client once it has been obtained.
Local councils/authorities are also able to licence Buy to Let properties by way of selective or additional licensing. Such licenses are acceptable provided the property is not also an HMO. Such licensing is intended to protect the property from misuse and generally improve the locality.
The letting types must be to a single household with one tenancy and one tenancy agreement, eg an individual, a couple, family unit, a group of students or professionals – no more than 4 tenants under one agreement.
You must always confirm the identity and verify the address of each customer, before you submit an application. You will need to obtain one form of personal identity and one form of address verification, where the documents must be from different authorities or providers and have not been issued by Barclays.
For applications where capital is being raised (remortgage with additional borrowing, unencumbered remortgage and further advance) you have seen and taken copies of original ID&V documents. Where any ID&V document includes a photograph and you have met with the customer face to face, you are confirming that this is a true likeness to the applicant(s).
For all other applications we accept either copies of original documents or documents which have been copied by the customer and provided to you electronically (emailed).
You will not always be required to submit copies of proof of identity and proof of address documents, although you must retain copies as we may on occasion ask for copies to be submitted to us. You will be notified when the application is submitted whether ID&V documents need to be submitted.
General Notes:
Unacceptable documents:
The following documents are not acceptable as proof of identity or address verification:
The lists below provide the most commonly used items for proof of ID and address. If using any of these documents, please be aware of their specific requirements. If you hold alternative documentation please contact the Intermediary Support Team via live chat or call 0345 073 3330 for guidance about other acceptable documents or with any queries about the criteria.
Proof of identity:
Address verification:
We can accept the following documents the customer has printed from the relevant secure internet site.
These can only be accepted alongside the following ID documents:
The name and address on the above ID document MUST match the name and address on the internet printed address verification document. If the customer does not have the above ID available or if the name and address do not match – you CANNOT accept prints from the internet.
We can only issue a mortgage offer once all proof of identity and address requirements have been successfully completed for all clients.
Independent Legal Advice must be obtained by all directors/shareholders/members of a SPV Ltd Company or Limited Liability Partnership each time they sign a personal guarantee. All associated costs to be covered by your client.
On joint mortgage applications where there is any additional borrowing or equity release in excess of £50,000 and this is to be for the benefit of one party to the mortgage only (eg purchase of a second/BTL property to be registered in the name of one party), Independent Legal Advice must be obtained by all other borrowers not directly benefiting before any funds are released.
In the BTL market, investors often purchase properties with funding on an interest-only basis.
This is acceptable as long as the applicants have a suitable repayment strategy in place to repay the capital at the end of the term.
Repayment strategies for interest-only BTL mortgages
The following repayment strategies are acceptable for interest-only BTL mortgages:
Where bank statements are required, Internet Bank Statements are acceptable subject to the following criteria being met:
Internet bank statements stamped and certified by issuing bank:
Internet bank statements not stamped and certified by issuing bank:
Internet bank statements for UK accounts that have not been stamped and certified by the issuing bank can be accepted subject to the following criteria:
Mortgage Services still have discretion to request original bank statements and or further information where they are not satisfied with documentation provided.
No discretion can be applied to the contents of this section.
Internet Bank Statements are not acceptable to fulfil ID&V requirements.
Joint Borrower Sole Proprietor (JBSP) is a proposition that lets you be named as a mortgage applicant, even if you’re not also a legal owner of the property.
We’ll still consider your income if you’re not named as a proprietor upon completion.
Conditions
If you’re a proprietor, you need to be a borrower too
When you apply, your application needs to clearly show the need for this arrangement and the name of the sole property owner
All borrowers need to sign the mortgage deed
If you’re not on the title deeds, you need to get independent legal advice – this needs to be a letter from your solicitor, before any completion money is released
Available in England, Wales, Scotland and Northern Ireland
Exclusions
All other elements of standard lending policy apply.
L-N
Any of the following leases/letting types are ACCEPTABLE
All of the following are UNACCEPTABLE as either “existing” or “proposed” lease/letting types
*A related person is defined as “The borrower’s spouse, parents, grandparents, siblings, children and grandchildren. An unmarried partner of the borrower whose relationship with the borrower has the characteristics of the relationship between a husband and wife is also included, which can include a person of the same sex as the borrower. Stepchildren are included”.
We define an LLP as a UK-registered partnership which has been established by private individual(s) for the sole purpose of BTL activities. For example, the purchase/remortgage of residential properties for letting.
Remember – we only consider applications from LLPs who are existing clients. For example, clients who already have a BTL mortgage with us. This is subject to the structure of the LLP continuing to be acceptable.
New lending applications for SPVs are limited to
A purchase or remortgage from another lender and unencumbered equity release aren’t acceptable.
If your customer is looking for a Limited Company Buy to Let for purchase or Remortgage?
You may wish to visit Kensington Mortgages, one of the UK’s leading specialist lenders and a subsidiary of Barclays Bank UK PLC. Kensington offer more flexible lending criteria to help people who may not meet typical lending requirements. Learn more.
Currently, the maximum LTV we offer on all BTL mortgages is 75% for loans up to £1m and 60% for loans above £1m to 2m. In addition, there are restrictions by property type as follows:
Note: For further advance borrowing, the affordability rate current at the time of assessment must be applied to the total borrowing after accounting for any increase in lending.
Need higher than 75% LTV?
You may wish to visit Kensington Mortgages, one of the UK’s leading specialist lenders and a subsidiary of Barclays Bank UK PLC. Kensington offer more flexible lending criteria to help people who may not meet typical lending requirements. Learn more.
At least one applicant must have a minimum income of £25,000 (excluding rent from background Buy to Lets, i.e. the £25,000 income must be from an acceptable source other than rental income.)
For individual loans above £1m, a minimum gross annual personal / earned income of £75,000 per annum is required (for joint applications, the two primary applicants’ combined income must be £100,000pa, where neither applicant earns £75,000.) The income components considered when deciding if this minimum income requirement is met are: basic salary + sustainable allowances + self-employed income.
A property is classified as "mixed use" where there is any element of commercial use, i.e. it's not wholly residential because it is used in part for non-residential purposes e.g. such as a shop, office, doctor's/dentist's surgery or "live work" unit. We do not accept mixed use properties for BTL mortgages.
If a client has more than one Barclays BTL please note that our standard Mortgage Conditions include an All Monies Clause which secures on the subject property, any other debt that may be due to us, whether under this loan or any other lending facility.
The maximum number of individual applicants for a single property is four. Only the first two applicants income will be considered. Existing SPV Limited Company customers or existing Limited Liability Partnership (LLP) customers should have no more than four directors/shareholders/members. Please note that any new lending to existing SPV/LLPs is limited to further advance and transfer of equity only.
For BTL Lending purposes the definition of a new build is a property that was first registered fewer than two years ago. This also this also applies to newly converted properties. Lending for new builds is restricted to £500k for up to 75% LTV and £1m for 60% LTV and below. New builds requiring lending of above £1m are outside policy.
Builders deposits/incentive
There is no restriction on the amount of builder’s, vendors or developer’s gifted deposit/cashback that can be accepted provided that:
Note: The personal stake must be increased by the relevant amount in circumstances where loan to value restrictions apply.
Acceptable warranties include:
CRL (no longer trading): Policies backed by Casualty and General, or ARK are still acceptable.
BLP: Policies underwritten by AGCS for business accepted by BLP up to 27th November 2020 are acceptable
Where a PCC is being used in place of a warranty:
O-Q
There are a number of factors to consider when assessing the personal covenant of an applicant. All of the following criteria must be met at least by the principal applicant
All BTL loan products are fully portable, subject to the new mortgage meeting our policy.
Porting allows mortgage customers to carry forward the existing mortgage product to a new mortgage. There are circumstances where the porting is dependent on the jurisdiction of the customers residence. New Buy to Let mortgage products are not portable. The value of the ported element of the new mortgage must be at least 75% the amount outstanding on the product being ported, to avoid Early Repayment Charge.
In order for Barclays to proactively manage the risk of over exposure in one location (i.e. on a particular development/estate, in an individual block, in the same road/street) an assessment of the property concentration we currently hold, will be carried out by our BTL Mortgage Processing Centre on receipt of the application based upon postcode concentration.
The maximum Barclays property concentration is 6 properties in any one postcode (eg AB1 2CD), the only exception is where there is high volumes of flats we will accept up to 10% of properties. Although all applications where there are more than 4 properties in any one postcode will be referred for review.
BTL properties must be located in England, Wales, Scotland or Northern Ireland.
We recommend that a reputable qualified letting agent should be engaged to let and manage a BTL property. However, where a client can demonstrate relevant experience we'll allow them to undertake their own letting and management.
There are some property types which are not deemed suitable security for the Barclays Group and so in all cases lending will be declined on Buy to Let properties. These scenarios are listed below:
Some properties may have certain features which mean that extra care will have to be taken. In these cases please contact the Intermediary Support Team for further details on our lending policy:
The above lists are not exhaustive; please call our Intermediary Mortgage Experts on 0345 073 3330 - Monday to Friday, 9am to 5pm for further details.
R-Z
When an applicant is currently on, or is about to start, a period of reduced income for a defined period of time (e.g. maternity paternity, adoption leave), we’ll base the affordability and overall lending assessment on their ‘return to work’ income details.
To verify their income, please provide all of the following
Re-mortgages must always be treated as a new lending proposition and assessed and underwritten on the basis of the aggregate borrowing/overall exposure and in accordance with BTL Lending Policy.
In ALL cases:
Re-mortgages with capital raising:
Any re-mortgage must meet our minimum mortgage amount of £35,000, subject to product availability. It is acceptable for the capital raising element to be used for the following purposes only:
On joint mortgage applications where there is any additional borrowing or equity release in excess of £50,000 and this is to be for the benefit of one party to the mortgage only (eg purchase of a second/BTL property to be registered in the name of one party), Independent Legal Advice must be obtained by all other borrowers not directly benefiting before any funds are released.
BTL loans can be taken on the basis of:
Residency criteria for BTL differs to that of residential mortgages as the property won’t be occupied by the client. The definitions, for BTL purposes, of a UK resident, a Non-UK resident, and expatriate are detailed below:
UK Resident
Someone who is resident in the UK at the time of application
Non - UK Resident
Someone who is not resident in the UK at the time of application
Applicant with Permanent Rights To Reside in the UK with 2+ years UK residency – Acceptable for Buy to Let lending purposes
Applicant with Permanent Rights to Reside in the UK with less than 2 years UK residency – Acceptable for Buy to Let lending purposes (subject to additional criteria)
Applicant without Permanent Rights To Reside in the UK with 2+ years UK residency - Acceptable for Buy to Let lending purposes up to 65% LTV (subject to additional criteria)
Applicant without Permanent Rights to Reside in the UK with less than 2 years residency – Not Acceptable for Buy to Let lending purposes
UK Residency History | ||||
Current UK Resident for 2 Years or more | Current UK Resident for under 2 years | Non-UK Resident | ||
Applicant’s income is required to meet solvency affordability or personal convent requirements | Applicant has Permanent Right to Reside (PRR) in the UK * | Acceptable (This is a typical case) |
Additional Criteria applies± (See notes below) |
Not permitted. The application should be declined. (with the exception of British Armed Forces personnel posted or deployed overseas) |
Applicant does not have PRR* | Additional Criteria applies† (See notes below) |
Not acceptable | ||
Applicant’s income is NOTApplicant’s income is NOT required required | Applicant has Permanent Right to Reside (PRR) in the UK | Acceptable | ||
Applicant does not have PRR |
*PRR in this context includes applicants with any of the following: Settled status (EU, EEA and Swiss nationals), Indefinite leave to remain, British citizenship (including dual citizenship where applicant is a British citizen and a citizen of another country), Irish (RoI) citizenship.
† Applicants that do not have PRR but have resided in the UK for at least 2 years can be considered, however, the following additional criteria applies where that applicant’s income is required for affordability purposes:
• The maximum LTV is 65%
• The applicant must have at least 1 year remaining on their visa
• The following documentation is required:
- For employed applicants:
3 months’ bank statements AND 3 months’ payslips are required, showing mandated salary paid in the UK to the applicant’s own bank account. Where an applicant has travelled from another country to work in the UK, to be paid in cash this is unacceptable.
- For new to bank customers:
ID for KYC purposes must be verified by a Passport (not a UK travel document or driving licence).
- For purchase applications:
The source of funds being used in the transaction (including deposit and SDLT) must be evidenced.
‡ Applicants with PRR that have resided in the UK for less than 2 years can be considered, however, the following additional criteria applies where that applicant’s income is required for affordability purposes:
• Self-employed income cannot be considered
• The following documentation is required:
-3 months’ bank statements
-3 month’s payslips are required, showing salary paid in the UK via a mandated salary to the applicant’s own bank account. (Where a professional has travelled from another continent to work in the UK, it is unacceptable to be paid in cash)
-ID for KYC purposes must be verified by a Passport (not UK travel documents or driving licences), which all applicants would hold
- For purchase applications:
The source of funds being used in the transaction (including deposit and SDLT) must be evidenced.
We currently only accept applications from non-UK residents for existing BTL mortgage holders through Barclays Wealth International. Please contact them on 0207 574 3017 for further information.
When a second/subsequent charge is secured against the subject property, you should provide us with the following information:
If there is a cost to the applicant associated with the charge (for example, it relates to a secured loan) this must also be recorded in the application as a commitment.
We will require a Deed of Postponement (DoP) prior to release of funds.
Applicants are classed as self-employed when they hold over a 20% share in a company.
For details of documentary requirements for self-employed, please see Criteria and Packaging Guide [PDF, 790KB].
PAT (Profit after tax)
Profit, after any applicable corporation tax has been deducted, can be considered towards the affordability assessment, in addition to the applicant’s director’s salary where applicable, where the following requirements are met:
The maximum amount of Limited Company PAT that can be considered as part of the overall affordability assessment is the lower of:
The amount of PAT used will be determined by the percentage shareholding of the applicant. E.g. where the borrower is a 70% shareholder a maximum 35% of PAT can be considered (50% of 70%)
The Maximum amount of PAT used towards affordability cannot exceed 5x the average {Salary + Dividends} paid to the applicant(s) over 2 most recent years, as evidenced by the 2 latest tax calculations.
Where more than 25% of the company’s trading income is received in a currency other than GBP the maximum amount of PAT that can be used towards affordability reduces to 40% (further reduced where the applicants’ combined shareholding is less than 100%, as described above).
Applicants that have received a loan from the company that remains outstanding at the point of application would require the amount they are repaying each month to be captured as a commitment within the affordability assessment as 1/12 of the outstanding amount (as evidenced by an accountant’s letter) Detail needed for accountants' letter can be found in ‘Useful documents’ under ‘Limited Company Profit After Tax’
We'll accept solicitors to act on behalf of Barclays if nominated from the Barclays panel. The Barclays reserves the right to nominate/appoint solicitors to act on its behalf, the costs of which must be covered by the applicant.
Our definition of a Special Purpose Vehicle Limited Company is a UK-incorporated company that has been established by private individual(s) for the sole purpose of BTL activities i.e. the purchase/remortgage of residential properties for letting. This is confirmed by the Standard Industry Classification (SIC) Code registered at Companies House and will be checked/evidenced for our purposes by a full Company Search being carried out by our BTL Mortgage Processing Team.
The following codes are acceptable under the current SIC 2007:
68100 – Buying and selling own real estate
68209 – Other letting and operation of own or leased real estate
68320 – Management of real estate on a fee or contract basis
In addition, the following historic codes under SIC 2003 are also acceptable:
Please remember that we now only consider applications from SPV Limited Companies which are existing clients ie the SPV Limited Company already has BTL mortgage lending with us. This is subject to the structure of the SPV Limited Company continuing to be acceptable. For more information, please call our Intermediary Mortgage Experts on 0345 073 3330 - Monday to Friday, 9am to 5pm.
New lending applications for SPVs are limited to
A purchase or remortgage from another lender and unencumbered equity release aren’t acceptable.
Alternative SIC codes
You may wish to visit Kensington Mortgages, one of the UK’s leading specialist lenders and a subsidiary of Barclays Bank UK PLC. Kensington offer more flexible lending criteria to help people who may not meet typical lending requirements. Learn more.
Whilst Barclays do not offer Ltd Company BTL mortgages, Kensington Mortgages, a subsidiary of Barclays Bank UK PLC does. It offers a range of Limited Company BTL products designed to provide solutions for your professional and portfolio landlords.
For portfolio applications, only properties owned by the Limited Company will be assessed (personal Buy to Let properties are ignored on the assessment)
Proof of identity and address verification for all private individuals, directors, shareholders and members must be obtained.
Proof of address: A minimum of 3 years uninterrupted history must be provided by all mortgage applicants. We'll confirm 2 years address history via the Voters Roll wherever possible for UK residents; if we are unable to do this we'll have to ask for documentary evidence to cover the last two years.
For full details of our requirements, please call our Intermediary Mortgage Experts on 0345 073 3330 - Monday to Friday, 9am to 5pm.
The term of a Buy To Let Interest-only mortgage can be from 5 to 35 years and for a Buy To Let Repayment mortgage the term can be from 5 to 25 years.
To be able to lend on a property, Barclays requires a valuation to be carried out. When you apply for a Barclays mortgage, the valuation type depends on whether your mortgage will be on a residential or Buy to Let basis.
The mortgage valuation is our standard report for all residential applications and includes a description of the property, an opinion of the market value of the property as at the date of inspection, and an estimate of the current cost to reinstate the property in its present form (where appropriate).
It’s important to remember that the mortgage valuation is a report which is primarily for Barclays’ purposes and confirms whether the property is suitable security for a mortgage – it is not a survey. As such, we ask that all clients consider instructing a separate survey to provide them with a more detailed assessment of the condition of the property.
Your client may wish to contact Countrywide Surveying Services on 0800 012 6995 *, e.surv on 0800 169 9661 *, or any other provider to discuss the different survey options available. More information on the types of survey available can be seen found on the ‘Home Surveys’ section of the Royal Institution of Chartered Surveyors website.
Please note that if your clients do instruct their own survey, this will be a separate contract between them and their chosen survey provider with separate fees applying. Barclays will always rely on the mortgage valuation for the purpose of agreeing the mortgage.
Automated valuation model (AVM)
For Buy to Let remortgages and further advances on properties up to £1m in value (up to £2m in London and South East), where the loan to value required is 65% (subject to product availability) or less, we use AVMs to assist with instant mortgage decisions. Whether you apply through MAX or via other online systems*, the use of AVMs will help speed up the decision and offer a better process for your customer.
AVMs are only suitable for further borrowing where the latest valuation was a physical one – i.e. not an AVM.
* For example, via MTE or Trigold.
Japanese knotweed
Japanese Knotweed is an invasive plant introduced into the UK and has no natural predators. The plant is known to exploit existing weaknesses in buildings. Applications where Japanese Knotweed is identified should be looked at in accordance with the following requirements:
CATEGORY 4
Japanese Knotweed is within 7 metres of the main building, habitable spaces, conservatory and/or garage and any permanent outbuilding, either within the curtilage of the property or on neighbouring land;
and/or
Japanese Knotweed is causing serious damage to permanent outbuildings, associated structures, drains, paths, boundary walls and fences.
To be reported in the valuation report together with a valuation of the property. Further investigation is required. This is to be undertaken by a Property Care Association (PCA) registered or similarly qualified firm. All recommended remedial works must be covered by an insurance backed guarantee. The guarantee must be for a minimum of 10 years, be property specific and transferable to subsequent owners and any Mortgagee in Possession.
An insurance backed treatment plan must be confirmed prior to completion. It is not necessary for the recommended remedial works to be completed prior to the release of any mortgage monies.
CATEGORY 3
Japanese Knotweed is present within the curtilage but is more than 7 metres from the main building, habitable spaces, conservatory and/or garage and any permanent outbuilding.
Report this in the valuation together with a valuation of the property. No further investigation or action is required.
There is damage to outbuildings, associated structures, paths and boundary walls and fences and this is considered minor.
Report this in the valuation together with a valuation of the property. Further investigation is required. This is to be undertaken by a Property Care Association (PCA) registered firm. All recommended remedial works must be covered by an insurance-backed guarantee. The guarantee must be for a minimum of 10 years, be property specific and transferable to subsequent owners and any mortgage in possession.
An insurance-backed treatment plan must be confirmed prior to completion. It is not necessary for the recommended remedial works to be completed prior to the release of any mortgage monies.
CATEGORY 2
Japanese Knotweed is not seen within the boundaries of the property, but it is seen on a neighbouring property or land. It is within 7 metres of the curtilage of the subject property, but more than 7 metres away from the main building, habitable spaces, conservatory and/or garage and any permanent outbuilding.
To be reported in the valuation report together with a valuation of the property. No further investigation or action required.
CATEGORY 1
Japanese Knotweed is not seen at the property, but it can be seen on neighbouring property or land where it is more than 7 metres away from the curtilage of the subject property.
To be reported in the valuation report together with a valuation of the property. No further investigation or action required
Valuation and rental assessment appeal
Customers can appeal against Valuations where the following apply
For remortgage and further advance cases, where there is more than a 25% variance between the customer’s estimated value and the actual valuation provided by the Bank’s nominated valuer.
For purchase cases, where there is a variance of more than 10% between the purchase price and the valuation.
This applies to both Residential and Buy to Let cases.
Appeals on rental valuation figures are not accepted.
Appeals can only be considered when submitted against a physical valuation (i.e. not an AVM).
If your customer wishes to appeal the valuation in line with the guidance above, you will need to contact your Barclays Support Team or email brokersupport@barclays.com. An appeals form will be issued, and you will be required to supply 3 comparable properties sold in the last 6 months.