Buy-to-let | A-C
Lending criteria – Buy-to-Let
Barclays buy-to-let mortgage is a residential investment product. It's designed for the purchase or remortgage of residential properties (including new build) that will be ready to let on or within 1 month of completion.
Download our packaging requirements for more information or follow the links below.
- Application fees for Buy to Let mortgages can be added, deducted from the advance or paid up front (as long as the product allows). Refer to our latest rate guide for further information.
- For Buy to Let Rate Switches, fees can be added to the loan, however Fees over £2000 must be paid up front.
County Court Judgements (CCJs/defaults)
Adverse credit as detailed below must be declined:
- Any unsatisfied CCJ
- More than one satisfied CCJ and the latest is registered within the past 3 years
- Satisfied CCJs totalling more than £200 and the latest is registered within the past 3 years
- More than 3 satisfied defaults* and the latest is registered within the past 3 years
- Satisfied defaults* totalling more than £200 and the latest is registered within the past 3 years
- Any outstanding default, irrespective of amount
- If it is identified that a Limited Company in which an applicant has greater than 15% shareholding has any outstanding judgements totalling more than £5000
*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
- Arrears of 2 or more months on any one account in the past 6 months
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 the Intermediary Business Centre on 0345 073 3330 * to discuss whether we will be able to assist. Lines are open Monday to Friday, 9am-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.
All applicants are required to pass an income 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.
- Minimum age of principal applicant 21 years
- Minimum age of all other applicants 18 years
- The mortgage term must not extend beyond age 80 of any applicant
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:
- Principal applicant meets minimum income requirements
- Principal applicant is in receipt of income from an acceptable source as defined in the ‘Allowable Gross Income’ section
- Mortgage term does not extend beyond age 80 of any applicant
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
- Current basic annual salary
- Monthly bonus/commission/overtime
- Mortgage subsidy
- Car, shift and large town allowance
- Private, company or state pension
- Unearned income from Trust funds/ Investments
- Certain disability allowances
- Income from self-employment - please note that rental income generated from a property portfolio can not be used
- Child benefit
Click here to view the details of allowable gross income verification requirements applicable to both personal covenant and the assessment of personal solvency. All applicants’ allowable income from ALL sources must be declared with sufficient evidence provided to support the lending proposition where requested.
We are unable to lend to applicants who have been made bankrupt (whether discharged or not) or who have been the subject of an Individual Voluntary Arrangement (IVA).
- Private individuals. (For non-UK residents only those who already hold a Barclays BTL mortgage).
- Existing Barclays Special Purpose Vehicle (SPV) Limited Company customers
- Existing Barclays Limited Liability Partnership (LLP) customers
- Private individuals with diplomatic immunity
- SPV Limited Companies or LLPs who are not existing Woolwich BTL customers
- Offshore Companies
- Trading Companies
- Non-UK residents who do not have an existing Barclays BTL mortgage
Mortgages can be held in a mix of borrower types eg
- A client can have a BTL mortgage in their private name and two others in a SPV Limited Company
- In both their private name and a LLP
- In combinations of private names, ie one in their sole name and a partner's name
- In multiple combinations of private names, a SPV Limited Company and a LLP.
Borrower Types Based on Mortgaged Rental Properties
- BTL Investors
- A Buy to Let Investor is classed as having 1 to 3 mortgaged Buy to Let/Permission to Let properties.
- Portfolio Landlords
- A Portfolio Landlord is a borrower with four or more distinct mortgaged Buy to Let properties, either together or separately, in aggregate.
Where BTL mortgages are in a mix of borrower types the maximum aggregate applies across all Barclays BTL mortgages regardless of the borrower type. Borrowing types cannot be mixed on individual mortgages.
There is no restriction on the amount of builder’s, vendors or developer’s gifted deposit/cashback that can be accepted provided that:
- The deposit/cashback does not have to be repaid and the builder does not intend to register a charge against the property
- The applicant is providing at least a 25% personal stake (based on the lower of valuation or discounted purchase price), ie after accounting for any builder/vendor incentive/deposit
- For example, where the full purchase price and valuation is £100k and the builder/vendor is providing a £5,000 cash incentive, the applicant must provide a minimum of £23,750 from own resources towards the purchase based on 25% of the discounted purchase price; therefore the maximum advance in this scenario would be £71,250
Note: The personal stake must be increased by the relevant amount in circumstances where loan to value restrictions apply.
All applicants are required to pass an affordability test.
In all instances, you should check client affordability prior to submitting a case by completing theBTL affordability calculator .
The following commitments must be considered.
- Hire Purchase Agreements including Mail Order Payments, Bank Loans, Finance Loans, Payday Loan Advances (full amount outstanding applies) or Second Charges.
- Any other or future commitments such as monthly fees/interest payments under a shared equity loan agreement and/or deferred credit payments. If a customer is a guarantor for any mortgage, property rental agreement, secured loan or any other loans then the monthly payment of such commitments is applied in the affordability assessment in line with these requirements.
- Regular Pension Payments – including any additional voluntary payments (eg AVCs) being paid regularly from income. ‘One-off’ contributions, for example from an annual bonus, can be disregarded. (Note: pension contributions will be automatically calculated as part of the affordability assessment. They should not be input as part of the application process)
- Court Orders relating to maintenance payments or judgement debts.
- Child Support Agency (CSA) payments.
- School Fees and Child Care/Nursery costs.
- Current Monthly Student Loan payment.
- Liability for ground rent, service and maintenance charges under any leasehold, commonhold or other agreement – including any equity sharing agreements.
- Credit Card debts (at the rate of 3% of the debt outstanding) including Store Cards.
- Overdraft debts (at the rate of 3% of the drawn balance at the time of application).
- Council Tax.
- Shared Equity Loan.
- Other regular commitments (excluding living expenses, clothes, food, utilities)
- Any loan/fixed repayment debt with less than 6 months to run can be ignored, provided that the total balance of loans in this category does not exceed £1,000.
- The total amount outstanding against any ‘payday’ loan advance must be deducted from the applicant’s net income when assessing affordability.
- Any commitment (existing residential mortgage borrowing) which is to be repaid from the new proposed mortgage advance can be ignored provided a specific offer condition is made to this effect.
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.