Buy-to-let lending criteria A to Z | Barclays Intermediaries

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.

• The main account must be running for a minimum of 6 months before a further advance will be considered and a minimum of 6 months since last advance date.
• The term of the further advance must be less than or equal to the term outstanding on the main mortgage account (maximum term is 35 years (Interest only) or 25 years (Repayment or Part and Part) from origination of main mortgage)
• All existing group mortgage accounts (both Buy to Let and Residential) must be up to date and well conducted.
• For Joint Mortgages applications – Where any additional borrowing is in excess of £50,000 and is to be wholly for the benefit of only one party to the mortgage e.g. purchase of second Buy to Let property to be registered in the name of one party, before any funds are released Independent Legal Advice must be obtained by all other borrower/borrowers not directly benefiting.

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:

• Any unsatisfied CCJ
• More than one satisfied CCJ and the latest is registered within the past 3 years
• Satisfied CCJs totalling in three locations 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 in three locations 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. 

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.

• 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.

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
• Criteria and Packaging Guide [PDF, 790KB]. This applies to both personal covenant and the assessment of personal solvency. All applicants need to declare their allowable income from all sources, and give us sufficient evidence to support the lending proposition, where we’ve asked for this.

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.

Documentation

• Monthly Bonus - 3 latest payslips which evidence monthly bonus amounts they have received ( Bonus must appear on 3 out of 3 monthly payslips and at least 1out of 5 weekly payslips or 3 out of 13 weekly payslips)
• Monthly Overtime or Commission -3 latest payslips which evidence at least 1 amount

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)

• 100% of the 3 months' average
• 100% of the latest P60 monthly average

*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.

• Bonuses paid less frequently than monthly are classed as annual
• Bonuses paid monthly or more frequently are classed as monthly*

* 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.

• If your customer receives their bonus Quarterly then we need 8 payslips which evidence the bonus payment
• If your customer receives their bonus Half Yearly then we need 4 payslips which evidence the bonus payment
• If your customer receives their bonus Annually then we need 2 payslips which evidence the bonus payment

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)

• 100% of the 3 months' average
• 100% of the latest P60 monthly average

**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)

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.

• The Building Safety Act 2022 provides protection from the remediation costs of replacing external combustible material where there is an agreed approach to remediation in place.
• Buildings that have external wall systems may require an EWS1 rating. Where a rating is A3 OR B2 this indicates some form of remediation is required.
• There are a variety of options available to leaseholders and Barclays made a commitment to help customers living in or buying impacted properties where there is a qualifying lease or planned remediation in place by a recognised body.
• To support applications for impacted properties that require remediation we will need one of the following to be provided to us with your client’s mortgage application.
• Written confirmation of intention to complete the works from a developer who has signed a contact with the government. You can see a full list of developers who have signed the pledge on .GOV.UK
• A Building Safety Act 2022 Government Leaseholder Deed of Certificate Form accompanied by a Building Safety Act 2022 Landlords Certificate
• Written confirmation from a housing association confirming they are completing the remediation or written confirmation from DLUHC confirming the property is approved for funding to remediate. For letters from DLUHC, these should clearly state if any financial liability is passed to the leaseholder or be accompanied by a leaseholder or landlord certificate.
• Where your client provides the Landlord and Leaseholder certificates it is important to capture the financial commitment they will have. You can find the total sum payable on the landlord certificate within the “work undertaken on relevant defects” section.
• Any amount the client must pay will be taken over a 10-year period. Therefore, the amount due on Monday 14th February 2022, should be divided by 120 months and captured as or within the service charge to ensure affordability is met.
• Developer or Housing Association remediated properties will have no financial liability passed to the leaseholder and therefore will not impact affordability.
• Please note: if the application is for a property that requires fire safety remediation we will only proceed where we have satisfactory evidence in the format/s detailed above. In the event this cannot be provided we would be unable to support your customers mortgage application at this time.
• For customers who already hold their mortgage with Barclays against a property that requires remediation we can support rate switch applications, permission to let requests and conversion from BTL to residential or vice versa without evidence being required. Where any additional borrowing is required for existing customers, the rules detailed would apply.’

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%

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.

• 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)

Other Considerations:

• 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.

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.

• 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.

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

• To assist with the purchase of a further residential property ie, buy-to-let or residential property)
• To buy out the equity interest from associated parties
• For property repairs and/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

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

• Maximum LTV is 75% for loans up to £1m and 60% LTV for loans above £1m to £2m. The maximum aggregate Buy To Let borrowing exposure with Barclays is £3m and the maximum aggregate Buy to Let borrowing exposure across all lenders is £4.5m
• Lending for flats restricted to £500k for up to 75% LTV and £1m for up to 70% LTV
  Lending for new builds 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.
  The main account must be running for a minimum of 6 months before a further advance will be considered
  The maximum term for an interest-only mortgage is 35 years, and 25 for a repayment mortgage.
  For a further advance, where any part of the mortgage is on a repayment basis (for a further advance or existing mortgage), then the maximum term is 25 years.
  Supporting documents must be provided as detailed in the Requirement Table
  All existing Group mortgage accounts (both BTL and residential) must be up to date and be well conducted
  An assessment of rental cover in accordance with basic lending terms must be undertaken, based on the rental assessment provided by Barclays’ preferred surveyor
  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.

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

• 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

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:

• Fees to obtain a licence if one is now required
• Essential repairs/improvements to ensure the property complies with licence requirements (either to obtain or maintain the standard required for the licence)
• Essential Repairs to maintain the quality of the property. Please note that this does not include cosmetic improvements such as redecoration
  
  

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:

• 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

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
• UK Residence Permit

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:

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

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.

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

• 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.

Any of the following leases/letting types are ACCEPTABLE

• England and Wales: Assured Shorthold Tenancy (AST) / Occupation Contract (Wales) for a minimum term of 6 months and maximum term of 2 years. ASTs / Occupation Contracts (Wales) 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 / Occupation Contract (Wales) 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 / Occupation Contract (Wales)/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 / Occupation Contract (Wales) 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 / Occupation Contract (Wales) 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 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”.

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.

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:

• 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.

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:

• 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), i.e 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.

Acceptable warranties include:

• ABC+
• Advantage/ Advantage Home Construction Insurance (AHCI) (Only warranties underwritten by CGICE)
• ARK 10 Year Structural Defects Insurance
• Build Assure (New Homes Structural Defects Insurance)
• Build-Zone Structural Warranty (including Build-Care)
• CADIS
• Checkmate Castle 10 New Home Warranty
• Global Home Warranties 10 Year Structural Defects Insurance
• Protek
• Home Proof (previously AEDIS Warranties Ltd) (Only warranties underwritten by Millenium, SCOR or Titanium Insurance Company)
• ICW (International Construction Warranties)
• LABC New Home Warranty
• NHBC
• One Guarantee
• Premier Guarantee
• Q Policy/ Q Assure

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:

• The property must be built under the supervision of an Architectural Technologist or qualified Surveyor who has professional indemnity insurance and is employed solely by the applicant, a builder or a self-build group;
• The Certificate must be in in the exact words and format as set out in UK Finance Lender Handbook section 6.7.4;
• A retrospective PCC is not acceptable 
• The individual signatory to the PCC must meet the qualification criteria as set out.in UKF lender Handbook 6.7.4 & 6.7.5
• The development must be of a no more than 5 properties;
• Where, by exception, a high-quality small-scale development covering more than 5 properties (max 10) is presented, separate approval to proceed must be secured. Please contact the support team on 0345 073 3330
• PCC certification is not acceptable on individual properties in a large development scheme;
• A property with a PCC certificate, which is not complete at initial inspection, will require a final inspection prior to completion;
• A retrospective PCC is not acceptable
• A PCC from a warranty provider company that is not on the above approved list is not acceptable.
• PCC’S are not acceptable covering flat developments 

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 is required when we cannot assess rental calculations
• 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 3 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

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:

• Demolish and rebuilds
• Freehold flats and maisonettes (Scottish flats that are held in Absolute Ownership (former feu) are acceptable as long as a Deed of Conditions has been created to regulate the management and maintenance of the property as a whole.)
• Properties classed as ‘houses in multiple occupation’ where a licence from the Local Authority is required
• Live-work units
• Easiform cavity walled concrete
• Those where the client uses or proposes to use any part or whole of the security offered for owner occupation
• Those with multiple tenancy or licence agreements in place.
• Those that contain bed-sits.
• Flats that are not self-contained or without independent access
• Any property not recommended as suitable security by our surveyor or which falls outside our Lending Policy.
• Adjoining flats (granny annexe)
• Where there are any Agricultural Restrictions
• Mixed-use properties
• Section 106 properties

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:

• Japanese Knotweed – please see separate policy section
• Properties with deck area access can only be considered for good quality developments with no restriction whatsoever on mortgageability/saleability. 
• Contaminated land – Typically from previous industrial use of the site
• High-rise blocks of flats – properties with deck area access or properties that have non-decorative timber cladding will be looked at individually
• Modern methods of construction – Will require an individual assessment by a valuer
• Early steel frame construction - Will require an individual assessment by a valuer

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.

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

• Their latest payslip
• Their last payslip before the period of reduced income, if they’ve already started a period of reduced income
• Their return-to-work details. As a minimum, this must include
  
  
  • Intended return date
  • Proposed basic income on return
  • If the applicant is working hourly, the proposed number of hours to be worked on their return
  • If the applicant intends to amend their working hours, confirmation that their employer has approved this

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.

BTL loans can be taken on the basis of:

• Capital repayment (capital & interest)
• Interest-only or
• A mixture of both

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.

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.

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 Loan amount (less capitalised product fees) is Over or equal to £1m. (Where the loan amount is below £1m the affordability assessment will be based on the applicant’s director’s salary and dividends only. PAT cannot be taken into consideration.
• The borrower(s) collectively own greater than 50% of the company’s shares.

The maximum amount of Limited Company PAT that can be considered as part of the overall affordability assessment is the lower of:

• 50% of the three-year average Limited Company PAT, or
• 50% of the Limited Company PAT for the latest trading year.

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:

• 7012 - Buying & sell own real estate,
• 7020 - Letting of own property, or
• 7032 - Manage real estate

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

• Further advance
• Transfer of equity

A purchase or remortgage from another lender and unencumbered equity release aren’t acceptable.

Alternative SIC codes

• If your client fits SIC code 68201 – Renting and operating of housing Association of real estate, then Kensington Mortgages could be an option.

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) 

• No maximum age 
• No minimum income required where the Limited Company Director is an existing owner occupier 
• Cashback options available
• Houses of multiple occupancy/multi-unit block properties accepted up to six beds/units. 

Click here or call 0800 111 020¹

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.