Buy-to-let lending criteria for lending products | Barclays Intermediaries

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

• For fully built properties, a valid Energy Performance Certificate (EPC)
• A valid Predicted Energy Assessment (PEA) certificate if the property is still being built

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

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:

• Sale of mortgaged property
• Existing endowment policy
• Existing stocks and shares (ISA)*
• Existing share, unit or investment trust (professionally managed)*

*The value must be equivalent or the more than the interest only mortgage value and Single line stock can not be accepted.

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:

• Refer to Basic Lending Terms for maximum loan to value, minimum interest cover, maximum individual loan amount, maximum aggregate exposure and LTV/property restrictions per customer
• The applicant must have owned the property for a minimum of 6 months before a re-mortgage will be considered
• Lending on new build properties, including newly converted properties (first registration of the property was 2 or fewer years ago) is restricted to £500k for up to 75% LTV and £1m for 60% LTV and below.
• The applicant must always complete the appropriate application/online submission and detail the purpose of any capital raising required
  
• Supporting documents must be provided as detailed in the Requirements Table

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:

• To assist with the purchase of a further residential property (ie, BTL or residential property)
• To buy out the equity interest from associated parties
• For property repairs or improvements to any residential property owned
• To assist with financing changes in our security, eg, purchase of additional land that will form part of our security, purchase of freehold, extension of lease
• To repay existing residential mortgage

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.