Buy-to-let | L-N
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.
Packaging checklist [PDF, 294KB]
Lending criteria at a glance [PDF, 535KB]
Use our A to Z tool below for details of our buy-to-let lending criteria
Any of the following leases/letting types are ACCEPTABLE
- England and Wales: Assured Shorthold Tenancy (AST) for a minimum term of 6 months and maximum term of 2 years. ASTs can continue to renew under a new contractual tenancy of the same or substantially the same terms until such time that it is brought to an end by the tenant or landlord.
- Scotland: Short Assured Tenancy for a minimum term of 6 months and maximum term of 2 years or of a type that allows vacant possession to be obtained on terms no less onerous than a standard Short Assured Tenancy.Private Residential Tenancy is also an acceptable tenancy type. Short Assured Tenancies can continue to renew under a new contractual tenancy of the same or substantially the same terms until such time that it is brought to an end by the tenant or landlord. All new tenancies must be Private Residential Tenancies.
- Northern Ireland: All Tenancy Agreements to be in a written form. There is no equivalent to an Assured Shorthold Tenancy which exists in England. Residential tenancies in Northern Ireland are governed by the Rent Order (NI) 1978 which provides certain basic rights to Tenants of privately rented properties whether or not these rights are expressly included in their Tenancy Agreements.
- Model Tenancy Agreements (MTA) can be used where the landlord wishes to allow a long term tenancy agreement to be put in place; this would generally be used for terms longer than 2 years. Care must be taken to ensure any tenancy agreements do not exceed the term of an Interest Only mortgage where sale of property is chosen as the repayment strategy.
- A single household with one tenancy and one tenancy agreement e.g. individual/couple/family unit/group of students or professionals (no more than 4 tenants under one agreement)
- A Company/Corporate Lets (for a minimum term of 6 months and maximum term of 3 years)
- Leaseback Arrangements to builders (minimum lease term of 6 months and a maximum lease term of 3 years). This is where a customer buys a new home, but leases it back for a period of time to the house builder to be used as a show home (cannot be used as the site’s official sales office – other than where the garage is to be used for such purpose. The developer’s Licence Agreement that the property will be returned to its original state must be evidenced). These letting types are acceptable, but please note that the case will be underwritten on the rental income achieved on an AST basis in the local area as provided by the surveyor and not on the guaranteed rental figure which the builder agrees to pay
- College and/or University Head Tenancy Schemes (minimum term of 6 months and maximum term of 3 years).
- Lease to a registered Housing Association or Local Authority for a (minimum term of lease 6 months and maximum term of 3 years). If the initial term of the lease was 5 years but there is now only 3 years left to run on receipt of the application this will be acceptable.
- Letting to tenants in receipt of housing benefits is acceptable
- If the tenant fails to vacate at the end of the term of the AST/PRT it rolls onto a Statutory Periodic Tenancy. This will occur where neither party wish to change the terms and it will roll on until either party gives notice. The minimum notice period for the landlord is 2 months (as it must be during the term of the AST) and for the tenant 1 month. This is acceptable to Barclays as long as the applicant provides a letter to confirm that the expired AST is still in place, with all terms unchanged.
All of the following are UNACCEPTABLE as either “existing” or “proposed” lease/letting types
- Letting to a related person* of the applicant (see note below). Therefore, any application submitted with this type of tenant must be declined as a Buy to Let application, and should be treated as a residential regulated mortgage contract.
- Sale and lease back where the tenant is the previous owner of the property
- Letting to directors/shareholders/members of the SPV Limited Company/LLP which is our borrower or any associated SPV or LLP
- Letting to diplomatic tenants and/or embassies
- Direct letting to tenants from the local authority housing waiting list i.e. the tenancy agreement is between our borrower and the tenant, rather than our borrower and the local authority
- Holiday lets
- Regulated and/or sitting tenants
- Premium Leases where all rent is paid in advance at the start of the tenancy
- HMO requiring a licence from the local authority – Refer to HMO requirements
- Room by room letting with multiple tenancy agreements
- Assured Tenancies (Scotland)
- Protected Tenancies (Northern Ireland)
*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”.
While we do not require your client to take life cover as a condition of the loan, we strongly recommend however that they make provisions to repay the debt in the event of early death.
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
- Further advance
- Transfer of equity
A purchase or remortgage from another lender and unencumbered equity release aren’t acceptable.
We can consider loans between £35k and £2m on an individual property, subject to product availability. An applicant’s aggregate borrowing across all their Barclays BTLs can’t exceed £3 million. Loans above £1 million require the borrower to earn more than £75k personal income or £100k for a joint application.
In addition maximum lending restricted as follows for property type and LTV:
- Lending for flats restricted to £500k for 75% LTV and £1m for 70% LTV
- Lending for new builds restricted to £500k for 75% LTV and £1m for 60% LTV. New builds requiring lending of above £1m are outside policy.
- Lending for houses restricted to £1m for 75% LTV
Note: Each BTL product has its own minimum and maximum loan size. Please refer to the current Buy to Let lending rates for further information
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:
- Maximum LTV is 75% for flats up to £500k and 70% for flats above £500k and up to £1m
- Maximum LTV is 75% for new builds up to £500k and 60% for new builds above £500k and up to £1m.
- New builds requiring lending of above £1m remain outside policy
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 properties must be located in England, Wales, Scotland or Northern Ireland.
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.
Previous mortgage or rental conduct is a key factor in assessing an applicant for a new mortgage. Where it's apparent there have been arrears on any previous mortgage or rent arrangement, a full explanation of the circumstances should be obtained from the applicant.
If arrears of greater than one month have occurred in the last 6 months, the case is outside lending standards and is to be declined unless there is an acceptable technical reason or evidence of a settled dispute is provided and verified by the lender.
Cumulative amount of arrears at any point in the last 2 years of 3 or more monthly payments on any one account must be declined.
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.
The maximum number of individual applicants for a single property is four. 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.