Buy-to-let lending criteria about your client | Barclays Intermediaries

• Minimum age of any applicant 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 term is 35 years (Interest only) or 25 years (Repayment or Part and Part) from origination of main mortgage.

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)

• currently own or part own a UK residential owner occupied property
• require a loan amount <=£1m
• not be considered a portfolio landlord (hold 4 or more BTL mortgages upon completion)
• rental income from background properties must cover the mortgage payments at 100%
• 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%

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.

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

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. 

Acceptable borrowers

• Private individuals. (For Non-UK residents only those who already hold a Barclays BTL mortgage)
• Applicants without Permanent Rights to Reside in the UK who have lived in the UK for a minimum of 2 years (up to 65% Maximum LTV subject to additional criteria)
• Applicants without Permanent Rights to Reside in the UK who have lived in the UK for less than 2 years (acceptable only for joint applications where the applicant's income is not being used)
• Existing Barclays Special Purpose Vehicle (SPV) Limited Company customers
• Existing Barclays Limited Liability Partnership (LLP) customers

Unacceptable borrowers

• Private individuals with diplomatic immunity
• SPV Limited Companies or LLPs who are not existing Woolwich BTL customers
• Offshore Companies
• Trusts
• Trading Companies
• Non-UK residents who do not have an existing Barclays BTL mortgage

Mortgages can be held in a mix of borrower types, for example

• 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 – this is someone who has up to three mortgaged BTL or permission to let properties
• Portfolio landlords – this is a borrower with four or more distinct, mortgaged, BTL properties either together, or separate, in aggregate

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.

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

• There can be no more than a 6-week gap between contracts
• Evidence of 12 months’ contracts (a minimum of 2 contracts must be provided if latest contract covers >12 months) is required – the only exception is where the applicant has recently moved from employee to contractor and provides services to their previous employer: In this case, we require confirmation that the client employed the applicant for at least 3 years before they became a contractor along with a copy of the service contract showing terms of remuneration, duration of contract and conditions of cancellation or termination
• There must be 3 months remaining on their current contract or alternatively be able to provide evidence of the next one

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

• The firm is a limited company
• The firm has only one contract in place
• The firm does not employ anyone (other than the applicant themselves)
• The applicant is 100% owner of the limited company (sole shareholder)
• The applicant’s current contract equates to at least £218 per day or £50,000 per year (gross)
• Mortgage Loan-to-Value is ≤ 85%

Daily-rate calculation

To calculate gross income, you will

• Identify the lower of the following – Average Daily Rate of Pay (excl. VAT) from the 2 most recent contracts OR the most recent Daily Rate of Pay (excl. VAT) OR the actual income shown on the bank statements;
• then multiple by 5 and;
• then multiple by 46 to give the annual figure

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

• Latest 3 full month’s consecutive personal bank statements confirming receipt of income
• Latest 3 full month’s consecutive business bank statements confirming receipt of income

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.

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.

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.

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. You are required to verify the Applicant’s identity and verify the information provided to meet the requirements under the Money Laundering Regulations 2017

General Notes:

• No document can be used as two forms of identification i.e. as proof of ID AND address
• Only one document can be accepted from a particular authority or provider. e.g. we cannot accept both ID and address proof from the same authority or provider
• Documents in alternate name must be supported by evidence of a name change e.g. marriage certificate, deed poll document, civil partnership registration
• Address details must relate to the current residence
• Your customer’s full first name and surname (as a minimum) must be on either the identification or address verification document. The 2nd document must, as a minimum, show their first initial and surname

Unacceptable documents:

The following documents are not acceptable as proof of identity or address verification:

• Barclays issued; Bank, Credit Card or Mortgage Statement
• Expired documents and documents outside the specified timeframes
• Immigration documents and travel documents – these are not a suitable substitute for a valid passport
• Mobile phone or mobile broadband bills
• A printout of latest transactions from the client’s bank is not acceptable as an alternate to a bank statement
• Any passport or ID card without a visible Machine-Readable Zone (MRZ)
• Digital bank statements
• Water utility bill
• EU National ID Card (Photo style) Inc. Switzerland
• TV Licence bills
• Biometric Residence Permits/eVisas

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:

• Full signed UK Passport with a Machine-Readable Zone (MRZ)
• UK Full Photo Driving Licence – A paper counterpart is not acceptable
• UK Full Paper Driving Licence – Old Style
• UK Provisional Photo Driving Licence 
• Full signed Foreign Passport with a Machine-Readable Zone (MRZ)
• EU Full Photo Driving Licence Inc. Switzerland
• Northern Ireland Voters Card will be considered for applications originated in Northern Ireland where the applicant is unable to provide any other form of acceptable proof of identity

Address verification:

• UK Full Paper Driving Licence – Old Style
• UK Full Photo Driving Licence - A paper counterpart is not acceptable
• UK Provisional Photo Driving Licence
• EU Full Photo Driving Licence Inc. Switzerland
• UK Bank Statement of Account or Charges from a UK Financial Institution (not Barclays) - must relate to a personal account, be less than 3 months old, contain full sort code and account number or IBAN number and bank statements must show at least one transaction entry. Bank statements from digital banks are not acceptable
• UK Credit Card statement - The statement must relate to a personal credit card account and be less than 3 months old
• Latest itemised UK mortgage statement -  (not Barclays) -  must be less than 12 months old
• Letter or bill from Utility company - Letter/bill must be addressed to the customer's residential address. Letter/bill must be addressed to the same property to which the utility service is provided. Must be less than 3 months old. Reference or account number is quoted (Water, Mobile Phone, Mobile Broadband & TV Licence bills are not acceptable)  
• Latest Council Tax Bill -must be for the current tax year, be less than 12 months old, contain the council tax reference number and be addressed to the customers current residential address
• Letter from HM Revenue and Customs - must be less than 12 months old. HMRC Letters issued with the sole purpose of confirming a National Insurance Number, P45, P60 and P91T are not acceptable
• Government Benefits Entitlement Letters – must be less than 12 months old
• Local Authority or Housing Association Current Tenancy Agreement - incorporating applicants name and address (tenancy agreement from private landlord not acceptable)
• Postal Re-Direct Notification – issued by Royal Mail to current address and less than 3 months old

We can accept the following documents the customer has printed from the relevant secure internet site.

• UK Bank Statements – (not Barclays) Statements from digital banks are not acceptable
• UK Credit Card Statements - from another provider (not Barclaycard)
• Utility Bills (Gas and Electric – but excluding Water, Mobile Phone, Mobile Broadband & TV Licence bills)
• UK Mortgage Statement – (not Barclays)

These can only be accepted alongside the following ID documents:

• UK/EU/Foreign Passport; or
• UK/EU Full Photo Card Driving Licence; or
• UK Provisional Photo Card Driving Licence

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.

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:

• The statements must show the account number and sort code or where applicable these must be visible on the customer’s proof of income documentation (e.g. pension payslip, benefits statement etc.).

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:

• The statements must show the account number and sort code or where applicable these must be available on the customer’s proof of income documentation (e.g. pension payslip, benefits statement etc.) with the full name of the applicant(s) i.e. “Mr Andy A Example” (middle names present as initials are acceptable).
• If the customer(s) full names (first and surname) are not on the statement, the underwriter must be satisfied that the account belongs to the mortgage customer, for example by:
• Reviewing correspondence from the accounting holding bank.
• Obtaining a copy of the corresponding cheque book evidencing the name and account number.
• The proof of income documentation (e.g. pension payslip, benefits statement etc.) showing the income mandated to the account showing the customer’s name.
• P60 or Annual Tax Summary where the full name can be aligned to the proof of income documentation via the National Insurance number which in turn can be connected to the bank statements provided.
• Statements can be in no way edited and all debit/credit entries and running balances must be visible.

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.

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.

Mortgage Boost (Joint Borrower Sole Proprietor) 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

• We can’t agree a mortgage, under any circumstances, where any party named on the title deeds isn’t also going to be a mortgage borrower
  

All other elements of standard lending policy apply.

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.

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

• Minimum age of the principal applicant is to be 21 or over
• A personal affordability check for all applicants
• Sole applicants must earn a minimum gross income of £25,000 (for joint applications at least one applicant must earn £25,000)
• Minimum gross annual personal/earned income for individual loans above £1m is £75,000 (for joint applications, the two primary applicants must earn at least £100,000 between them if neither applicant earns £75,000)
• Must be in permanent paid employment, employed and paid by current employer for the last 6 months, or in continuous employment for the last 18 months
• Contract workers must have an established 3 year track record of employment in the same line of work
• Self employed applicants must have been trading in their current business for a minimum of 2 years
• Retired applicants must be in receipt of income(s) from an acceptable source (as defined in the Allowable Gross Income section)
• Note: Each application will be assessed on its own merits; our underwriters need to be comfortable with the application and the proposed BTL security

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

*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.

*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.

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.

When a second/subsequent charge is secured against the subject property, you should provide us with the following information:

• Second/subsequent chargee name
• Second/subsequent chargee address
• Account/reference number
• Confirmation of whether the charge will be repaid with the proceeds of the mortgage

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.