Criteria & Packaging Guide
Our lending criteria at a glance and a comprehensive packaging guide
Everything you need to know
We have two sets of lending criteria at Barclays – residential and buy to let. To make it easier to find what you’re looking for, we’ve listed our criteria details in alphabetical order.
Our lending criteria at a glance and a comprehensive packaging guide
Work out how much we could lend your clients for buying a new home.
Find more information about registering with us, client applications and submitted cases.
Find more information about registering with us, client applications and submitted cases.
A-C
You need to treat requests for additional borrowing by existing mortgage customers as new lending, with the reason fully explained. Current policy rules apply to the combined total of the mortgage and additional lending. There are two exceptions to this (age and term) where policy requirements only apply to the additional amount borrowed.
A maximum LTV of 85%* may be considered (subject to product availability). A maximum LTV of 80% applies where the purpose of additional borrowing (ie further advance) is for debt consolidation.
* Maximum LTV for additional borrowing on interest only will depend on the repayment vehicle selected, see interest-only policy section.
For all new lending requests a valuation must be carried out irrespective of when the original valuation was undertaken.
Additional borrowing on offset mortgages
Clients who already have an offset mortgage with us and want to borrow more can’t keep their current offset product. They’ll need to choose from one of these options, based on their circumstances.
County Court Judgements (CCJs/defaults)
Adverse credit as detailed below must be declined:
*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.
Over-indebtedness
Where the total unsecured bureau debt (credit cards, overdrafts and loans) is greater than or equal to the gross annual income used in the affordability assessment then the application will be declined. This includes where customers were looking to consolidate the borrowing on to the mortgage.
These standards only apply on drawn balances (unused credit limits are not included). This calculation is automatically applied by the system.
Mortgage or rent arrears
If arrears of more than 1 month have occurred in the past 6 months, and/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 * to discuss whether we will be able to assist. Lines are open Monday to Friday 9am-5pm.
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.
It is important that we demonstrate that an applicant can reasonably afford to repay their mortgage before we agree to enter into a regulated mortgage contract with them. The use of income multiples alone is not sufficient to assess the maximum amount we'll lend.
Your client’s affordability will also be assessed using information collected in the 'Affording your Mortgage' section of our application. Here, you'll need to detail their regular financial commitments to show that they can afford to make the required monthly repayments.
There are several factors to take into account when assessing your client’s ability to repay their mortgage
Income assessment
This should include the applicant’s actual verified income, net of tax and National Insurance. When making a lending decision or contract variation the underwriters can consider various sources of income (please see the requirements table). The underwriter must consider the variability of the income over time to ensure the mortgage payments remain affordable to the customer. Variable (or non-guaranteed income) must be verified over a sufficient period to inform an assessment of sustainability.
Expenditure assessment
The data captured in the application must take into account committed expenditure (eg credit cards, overdraft, council tax, loans, hire purchase, school fees). Basic essential expenditure and basic quality of living costs will be accounted for in the affordability model.
Monthly mortgage commitment
The monthly repayment must be met from the applicant’s actual or reasonably anticipated income. If the applicant intends to repay from resources other than income, reference to information given by the applicant must be given on the application form.
For repayment mortgages
The monthly repayment used in affordability must be calculated on a capital and interest repayment basis. This should be based on the applicant's current affordability rate or pay rate, whichever is higher. This should also be based on the term of the mortgage or until the applicant is 70, or at the normal retirement of the principal applicant (main income earner), whichever is sooner. For any repayment mortgage term greater than 35 years and up to 40 years, a maximum term of 35 years would be applied for affordability purposes.
For interest only mortgages
The monthly repayment used in affordability must be calculated on a capital and interest repayment basis at the current affordability rate or pay rate, whichever is higher. This should be over an assumed term of 25 years or until the applicant is 70 or at the normal retirement of all applicants, whichever is sooner. Please note, for interest only mortgages the maximum term is 25 years. Where income into retirement from any applicant is required to meet affordability, it is not acceptable to lend on an interest-only basis.
Second or subsequent properties
Second or subsequent properties: commitments in the form of mortgage payments on second properties, other than those on properties confirmed as Buy to Let or Permission to Let properties, will be automatically applied on a standard repayment basis over the outstanding mortgage term at the current affordability rate or current payment amount, whichever is the higher when assessing affordability.
Where a credit limit applies to the existing mortgage borrowing, then it is this figure, including any undrawn monies, that should be used when assessing affordability.
In addition, a fixed-value commitment for each additional mortgaged residential property held is applied by the system to cover all other costs – this only applies to other residential properties, i.e. second residential homes, but not any property confirmed as being on a Buy to Let or Permission to Let basis.
The running costs (e.g. home insurance, utilities and council tax) of any residential unencumbered properties need to be included in the affordability assessment – please manually enter figures on the Commitments screen.
Buy-to-let/ Permission-to-let properties: Commitments in the form of contractual monthly mortgage payments on background buy to let/ permission to let properties will be applied automatically.
Remaining disposable income
The applicant’s 'disposable income' – ie, their monthly income after accounting for regular commitments as detailed above, must be sufficient to cover all other general living expenses, eg food, clothing, utility bills, hobbies.
Disposable income requirements are set by Barclays and must be met in all instances. Where these levels of disposable income are not realised, the application will be declined.
Minimum age: 18
Maximum age at the end of the mortgage term cannot exceed the oldest applicants 80th birthday.
Our maximum acceptable retirement age is 75, please note when the retirement age exceeds 70 our underwriting team may review the application and require additional information.
Where the mortgage term will go beyond age 75 proof of pension income must be provided, where the applicants income is required for affordability.
You’ll need to submit documents to prove affordability for the full mortgage term.
Our underwriters will need to see documents that show your client will be able to keep up with their mortgage payments when they’ve retired.
You’ll also need to confirm that you’ve discussed affordability in retirement with your client, and that they’re comfortable they’ll be able to meet the mortgage repayments until the end of the mortgage term.
We can consider applications on a repayment or interest-only basis if one or more applicants will be retired or aged over 75 at maturity of the mortgage, either where a younger applicant meets the affordability requirements or where customers can show evidence that they’ll be able to pay the mortgage in retirement.
UK Armed Forces Personnel who are currently working in the UK or overseas and wish to buy/re-mortgage a property to let, that is intended to be their main residence in the future or on their eventual return to the UK. It is acceptable to let the mortgage property on an Assured Shorthold Tenancy basis.
Service Personnel may be offered a Forces Help To Buy Loan (FHTB), which replaces the Long Service Advance of Pay (LSAP). This is usually a 10-year interest-free loan of up to £25,000. This may be used as a deposit to purchase a property but should be treated as a loan commitment in the normal way, with the annual monthly payments being deducted from the applicant’s income.
Please see the Help to Buy – Forces Help to Buy policy section for further details.
Allowable Income Types |
% Allowable |
Acceptable Evidence |
PAYE: Basic income |
100% |
Latest months’ payslips (or 5 consecutive payslips if paid weekly). |
PAYE: TAXABLE ALLOWANCES e.g. Mortgage subsidy / Car allowance / Shift allowance/ Large Town allowance |
100% |
Latest months’ payslip if paid monthly (5 consecutive payslips if paid weekly). |
PAYE: OVERTIME COMMISION AND BONUS paid monthly (or more frequently) |
50% |
Latest 3 months’ payslips( 5 consecutive payslips if paid weekly) AND Corresponding latest full month’s bank statement (if requested) Please note where amount vary we will use the average value as a primary income. |
>50% up to 100% (Where sustainability can be evidenced by latest P60) |
Latest 3 months’ payslips( 5 consecutive payslips if paid weekly) AND Corresponding latest full month’s bank statement (if requested) AND Note: If >50% of an applicant’s 3-month average BOC is required, the lower of the following will be used in the affordability and LTI assessment (subject to cap at 100% basic salary plus allowances): ·100% of the 3 month average (as evidenced by the latest 3 month payslips and supported by the latest P60), or ·The sustainable amount evidenced by the latest P60. |
|
PAYE: ANNUAL/ QUARTERLY BONUS (or paid less frequently than monthly) |
50% |
Previous 2 years’ individual payslips showing bonus payments Or Latest 2 years’ P60s Or HMRC Annual Tax Summary Or Latest 2 years’ Tax Year End payslips (showing total income) – normally March. |
SELF-EMPLOYED: Sole trader/ general partnership |
100% |
Latest 2 years’ HMRC Tax Assessments (SA302) or Tax Calculations AND Latest 2 years’ tax year overviews. |
SELF EMPLOYED: Limited Company shareholder |
100% |
Latest 2 years’ HMRC Tax Assessments (SA302) or Tax Calculations AND Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts). AND Most recent year’s trading accounts produced by a qualified Accountant (dated within 18 months of the application start date). Underwriters can accept unsigned accounts by verifying the accounts through Companies House. Note: Limited company shareholder directors with income taxed at source ONLY (PAYE), with not further tax to pay, are not required to provide tax calculations or tax year overviews, provided their annual earnings do not exceed £100,000. To validate the income, we require all of the following: ·3 months’ payslips ·Latest P60 ·Most recent years’ trading accounts produced by qualified Accountant (dated within 18 months of the application start date). |
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
<1 year* (Applicant has not been partner long enough to have completed a tax return reflecting one full year as partner)
|
100% |
Employed/Self-employed previously: The latest partnership agreement/ contract AND The most recent full month’s bank statement evidencing income AND A P60 reflecting PAYE income for the most recent full tax year OR (For Self-Employed only) Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts). |
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
1-2 years* (Applicant has completed one tax return reflecting one full year as partner) |
100% |
Employed/ Self-employed previously: Latest HMRC Tax assessments (SA302) or tax calculation* AND Latest tax year overview AND The latest partnership agreement/ contract. |
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
>2 years (Applicant has completed at least two tax returns reflecting at least two full years as partner) |
100% |
Employed/Self-employed previously: Latest 2 years’ HMRC Tax Assessments (SA302) or tax calculation* AND Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts).
Overseas profit
If the applicant is an equity partner in a LLP with overseas profit where the income/ profit share attributable to the applicant from the overseas profit is required for affordability purposes then, provided the overseas profit is remunerated in Sterling with no exchange from any foreign currency, this income can be considered. To evidence this information, the letter from the Finance Director/ senior partner, mentioned above must also confirm the following: How long the applicant has been a partner in the firm Applicant’s level of income Jurisdiction where the applicant is based That the applicant is contracted and remunerated in sterling. |
FOSTER INCOME |
100% |
Latest 2 years’ Local authority statements or equivalent (latest issued no longer than 18 month prior to application) OR A letter from the foster agency confirming the total foster income received for each of the last two years and latest 3 months’ bank statements. NOTE: Care: Assessment required of sustainability and continued affordability over the term. Children under care must be recorded as financial dependents for affordability purposes. |
INCOME FROM FIXED-TERM CONTRACTS (CONTRACTORS) |
100% |
Umbrella company (PAYE) Most recent contract(s) covering a 12 month-period AND Latest 3 months’ payslips (5 consecutive payslips if paid weekly).
Note: 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. |
UNEARNED INCOME E.G. FROM INVESTMENTS OR TRUST FUNDS ETC. WHICH ARE FREE FROM ENCUMBRANCES |
100% |
Latest 3 months’ consecutive bank or building society statements confirming receipt of income AND Evidence of the source e.g. portfolio of stocks and shares AND Letter from qualified accountant confirming income for last 6 months in addition to advising source, that there are no encumbrances and that the income covers the term of the proposed mortgage AND Corresponding Tax Calculation. Care: assessment required of sustainability and continued affordability over the term. |
MAINTENANCE PAYMENTS |
100% |
Court Order OR CSA/Child Maintenance Service Arrangement OR Latest 3 months’ consecutive bank or building society statements confirming receipt of income . An Underwriter assessment will be required of sustainability and continued affordability over the term. |
WORKING TAX CREDITS |
100% |
HMRC tax credit award letter (all pages) AND Latest full months bank statements clearly identifying the source of the income. |
CHILD TAX CREDITS |
100%* |
HMRC tax credit award letter (all pages) AND Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 13 or over. |
CHILD BENEFIT |
100%* |
DWP child benefit letter (all pages) OR Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 13 or over or highest earning applicant has a gross income of £60,000 or more. |
SCOTTISH CHILD PAYMENT |
100%* |
Social Security Scotland letter (all pages) OR Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 11 or over. |
UNIVERSAL CREDIT (UC) |
100%* |
3 months’ Universal Credit (UC) statements (printed online statements acceptable) AND Latest full months bank statements clearly identifying the source of the income. *Care: The following elements of Universal Credit are not considered sustainable income and should be deducted from the total amount received (if this results in a negative amount then no Universal Credit should be recorded): ·Housing Benefit: where this element will cease after completion. ·The ‘Child Element’ where the children are 13 or over.
Note: Income evidenced as being received in the form of Universal Credit payments for an applicant can only be considered where this is clear evidence of receipt of another form of allowable gross income for that applicant. Where amounts vary, we will use the average value however, care should be taken to understand if the amount of UC payable has reduced permanently as a result of means testing (i.e. due to the customer’s earned income increasing) in which case the lower amount should be used. Where a joint UC statement is provided as evidence of income and not all of those named on the joint statement are also party to the mortgage application, the additional evidence must be provided to clearly identify the portion of that income attributable to the mortgage applicant(s). Disability benefits must be in the name of the mortgage applicant in order to be considered however, if the disability benefit income paid to the mortgage applicant is for the benefit of the applicant’s dependent(s), then this cannot be considered as part of the affordability assessment. |
DISCRETIONARY MORTGAGE SUBSIDIES AND HOUSING ALLOWANCE |
100% |
Contract of employment. Care: assessment required of sustainability and continued affordability over the term. Restricted term subsidies may only be considered as a secondary income subject to a minimum term of five years. |
UK STATE PENSION (CURRENTLY RECEIVING) |
100% |
Latest full months bank statement clearly identifying the source of the income as state pension OR Proof of benefit letter. |
DISABILITY / STATE BENEFITS |
100% |
Latest DWP Benefits Statement AND Latest full months bank statements clearly identifying the source of the income. Allowable benefits: ·Disability Living Allowance (DLA) – being replaced by the Personal Independence Payment ·Attendance Allowance ·Income Support ·Council Tax Benefit ·Carer’s Allowance ·Disability Working Allowance ·Incapacity Benefit ·Industrial Injuries Disablement Benefits ·Employment and Support Allowance (replaced Incapacity Benefit/Income Support in October 2008). Care: Disability benefits must be in the name of the mortgage applicant in order to be considered however, if the disability benefit income paid to the mortgage applicant is for the benefit of the applicant’s dependent(s), then this cannot be considered as part of the affordability assessment. |
PERMANENT INCOME POTECTION PAYMENTS |
100% |
Policy statement clearly laying out pay-out schedule and amounts. 100% received net of tax and should be treated as such in assessing affordability. “Grossing-up” calculations may be conducted to ascertain an equivalent Loan to Income multiple to be used in the assessment). Care: assessment required of sustainability and continued affordability over the term. |
PERSONAL AND WORKPLACE PENSIONS AND ANNUITIES* (CURRENTLY RECEIVING) |
100% |
Latest full months bank statement clearly identifying the source of the income AND One of the following: ·Pension payslip ·Pension statement ·Annuity/Pension letter ·Pension P60.
Note: Pension statements and annuity letters may not be handwritten or amended and must: ·Show applicant’s name and address, which must match that stated on the application form ·Show pension/ annuity company’s name, address, telephone number and company’s registration number (if Limited) and be on headed paper or show company stamp ·Show pay dates ·Cover at least one month (five consecutive weeks) ·Show gross income ·Show net pay. Pension statements (Private/Company/State) must: ·Show regularity of payment ·Not be older than 12 months. Annuity letters must: ·Show lump sum invested in fund ·Show amount payable monthly ·Show end date if applicable ·Not be older than 12 months. *Note: Drawdown from a Self-Invested Personal Pension (SIPP) is not an acceptable income. |
PENSIONS (NOT YET RECEIVING) E.G. WHEN PROPOSAL TAKES APPLICANT PAST THEIR STATED RETIREMENT AGE. |
100% |
Statements from the organisation providing the pension confirming both the projected pension income and the assumed normal retirement date OR FCA regulated letter from the Scheme Administrator. |
Documentation
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)
*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.
* 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.
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)
**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)
If income |
Then* |
Monthly | Use latest month’s payslip figure |
4-weekly |
|
2-weekly |
|
Weekly |
|
The monthly amount to be paid towards the following commitments (including those originated and/or operated outside of the UK) must be deducted from the applicant/s net income to prove affordability:
Other considerations
Notes: If any undeclared commitment is identified this will generate a remodelling of the application and potentially a change in lending decision.
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
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
Daily-rate calculation
To calculate gross income, you will
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
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.
Criteria and Packaging Guide [PDF, 790KB]
You should make us aware if any portion of the customer’s income or source of wealth is cryptoasset-based or consists of investments in a crypto-related software business (e.g. Blockchain/DLT Tech firms).
Cryptoassets can include cryptocurrencies (such as Bitcoin), utility tokens (unregulated cryptoassets usually issued as part of an ICO/ITO), asset tokens including ‘stable coins’ (asset-backed coins with a value pegged to a physical asset of some kind) and security tokens.
Applications of this nature will be reviewed on a case-by-case basis.
D-K
Applications for the purchase of residential properties that will be occupied by a dependant relative of the applicant are acceptable under lending standards.
If the property being bought is being sold by a dependant relative who will then remain in the property after the sale takes place, the application must be declined.
Any dependent relative must be disclosed on the application as a financial dependent.
Any dependant relative must be occupying the property rent-free.
Any persons aged 17 or over who are not party to the mortgage but are, or will be, occupying the property during the mortgage term must be declared on the application as an occupier.
Where a property is being purchased, applicants are expected to provide a deposit of at least 5% of the purchase price
The personal stake may vary depending on specialist schemes or circumstances where loan to value restrictions apply.
The applicants must declare the source and amount of their deposit on the application form. Usually, the deposit will be from the applicants’ own savings, the sale of their previous property, a gift from relatives or a combination of these sources.
It is not acceptable for applicants to resort to secondary borrowing to fund the deposit, for example, by raising a personal loan. The only exception to this rule is, where the applicant is raising a deposit from the equity in another property.
For all purchase applications the applicant must provide documented proof of the source of the deposit.
Staff working in the UK for embassies, high commissions and international organisations (eg, United Nations) benefit from diplomatic immunity. Mortgage requests from applicants who have diplomatic immunity are outside of lending standards and should be declined.
As part of their affordable housing obligations, local authorities, housing associations and private developers or house builders may offer properties for sale at a discount, set at a percentage of open market value – for example, 80%. This discount may apply in perpetuity which means that, for subsequent sales, the owner must sell the property at the same discount based on the open market value at that time.
The discount arrangement is usually under a ‘section 106’ restriction. Discounted market sales are acceptable provided this restriction does not apply to the lender who may sell the property at open market value, this is known as a mortgagee in possession clause. The maximum nomination period we accept is 3 months.
Maximum 85% LTV based on the discounted sale price. Where there is a section 106 agreement, the LTV must not exceed 80% of the open market value (not the discounted sale price).
You’ll need to have been in continuous employment for the last three months with no gaps. This doesn’t have to be with the same employer, but if you’ve been with your current employer less than three months, your case will be assessed by the team. They might ask you to provide additional information.
For details of documentary requirements for employed income, please see Criteria and Packaging Guide [PDF, 791KB].
Second Job
100% of income will be accepted if, sustainability is evidenced.
Employed by relative
Where an applicant works for a “relative or partner”* who owns more than 20% of the company in which the applicant is employed by, we will treat them as employed, however we must take additional steps to confirm sustainability of income. The last 3 months payslips, corresponding bank statements and latest P60 must be provided. Where there is subsequently any concern with regards to sustainability of income required, underwriters should request trading accounts for the company for the last 2 years, or where employed by an LLP, a letter from the Finance Director/Senior Partner confirming income.
*”Relative or Partner” is defined as “The borrower’s spouse or civil partner; a person (whether or not of the opposite sex) whose relationship with the borrower has the characteristics of the relationship between husband and wife; or the borrower’s parent, brother, sister, child (including step child), grandparent or grandchild.’
The Family Springboard Mortgage is a product designed to allow family members and others to help a loved one get on, or up, the property ladder. Through it ‘helpers’ provide a 10% security deposit held in a ‘Helpful Start’ account and applicants are then able to purchase a property with no deposit or a personal deposit starting at just 5%. After 5 years the 10% contribution is released back to the helpers, with interest added (restrictions may apply), and the applicant continues with their mortgage.
An applicant cannot apply for a Family Springboard mortgage if they own a BTL property or have a second residential property, even if it is on a Permission to Let basis.
Mortgage applicants must be first-time buyers who haven’t previously held a mortgage in the UK or abroad. This applies to all applicants for a joint application.
Service personnel may be offered a Forces Help To Buy Loan (FHTB), which replaces the Long Service Advance of Pay (LSAP). This is usually a 10-year interest-free loan of up to £25,000. This may be used as a deposit to purchase a property but should be treated as a loan commitment in the normal way with the monthly payments being deducted from the applicant’s income.
The sourcing of the deposit in this way must be declared in the mortgage submission, and advisors or underwriters may ask the applicant to provide the ‘Personal Information Note’, which will contain details of their loan.
Note: Forces Help to Buy may be used as a deposit to help fund the purchase of a property under the Help to Buy: equity loan, but it cannot be used to help fund a deposit for buying a property through the Help to Buy: mortgage guarantee scheme.
The home must be a new-build and have an energy efficiency rating of 81 or higher, or be a new-build with 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
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 and our dedicated new build hub
Applications for the government’s Help to Buy scheme have now closed. Your clients won’t be able to access the equity loan from Homes England, and won’t be able to complete using a Help to Buy: Equity Loan mortgage.
More information on the Help to Buy Equity Loan scheme can be found here: www.gov.uk/help-to-buy-equity-loan
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.
The following documents are not acceptable as proof of identity or address verification:
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.
We can accept the following documents the customer has printed from the relevant secure internet site.
These can only be accepted alongside the following ID documents:
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
Scenario |
Maximum income multiple |
|
---|---|---|
1 |
LTV ≤ 85%- Capital and interest The total combined gross annual income of the two highest earning applicants ≥ £75,000 |
5.50x |
2 |
LTV ≤ 85%- Capital and interest The total combined gross annual income of the two highest earning applicants ≥ £45,000 |
5.00x |
3 |
LTV ≤ 80%- Interest only or part & part At least one applicant has a gross annual income of ≥ £75,000* or the two highest earning applicants have a combined gross annual income of ≥ £100,000* |
5.00x |
4 |
LTV >90% The total gross annual income of the two highest earning applicants ≤ £50,000 |
4.00x |
5 |
Debt to income ratio ≥ 20%** |
4.00x |
6 |
All other loan-to-value and income scenarios not included above |
4.49x |
* The income components considered when deciding if the minimum income threshold is met are: Basic income + sustainable allowances + self-employed income.
** Debt to Income ratio is calculated as monthly credit commitments after completion as a percentage of gross monthly income.
Looking for enhanced affordability?
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.
The maximum loan to value allowed on an interest-only basis is 50% where the repayment strategy is the sale of the mortgaged property, or 75% where the repayment strategy is another allowable source.
Where the repayment strategy is the sale of the mortgaged property, customers are required to have a minimum equity of:
£300,000 for properties in Greater London
£250,000 for properties in South-East & East Anglia
£200,000 for properties in all other regions
The table further below lists the postcodes for each region and equity requirement.
The maximum term for an interest only mortgage is 25 years and cannot extend into retirement.
The maximum income multiple applicable to interest only mortgages is 5.00x (please see the 'Income multiples' section of our lending criteria for full policy details).
There is a minimum income criteria required to be eligible for interest-only borrowing (including part and part borrowing):
Income must meet lending standards requirements with regards allowable gross income types i.e. Basic + sustainable allowances + self-employed income.
Given the importance of the minimum income criteria, and to protect your customers, please ensure that the minimum requirements are met – particularly where a customer is at the margins of income threshold.
Debt consolidation is not allowed for existing or new interest-only borrowing. The only exceptions to this being where an existing customer has a drawn mortgage reserve balance and wants to consolidate this, or where a customer wishes to add an ERC to the balance of the mortgage when remortgaging to us from a competitor.
The Barclays Group requires all customers who take an interest-only mortgage to have in place a repayment plan for their loan on completion of the advance. Unless using sale of property to be mortgaged, we require the repayment vehicle to have been in place for 12 months. The Barclays Group will consider one, or a combination of the following as acceptable repayment plans for interest only mortgages:
Where your client wishes to use any other method of repayment to repay the interest-only amount other than the acceptable repayment plans detailed above, this is not acceptable. While it will be the customer’s responsibility to maintain the repayment strategy throughout the term of the mortgage, as a responsible lender, it is important for us to ensure all interest-only mortgages are supported by an acceptable repayment strategy which will be sufficient to cover the interest-only mortgage on maturity.
Part and Part Borrowing – customers can borrow up to 85% LTV by choosing a Part & Part repayment option. The interest only element of the loan must be up to a maximum of 75% LTV (or 50% where the repayment strategy is the sale of the mortgaged property).
In addition, where the repayment strategy is the sale of the mortgaged property, at the outset there must be a minimum equity (this includes any capital and interest borrowing) after accounting for any interest only lending amount of:
The table below lists the postcodes for each region and equity requirement.
For example, for a £600,000 property in Greater London (based on the valuation or purchase price – whichever is lower), to meet the equity requirement the customer could borrow maximum of £300,000 on an interest only basis (50%), and £210,000 on capital and interest repayment (35%). So, the total LTV is 85%.
Transactions at Undervalue – eligibility must be based on the actual purchase price and not the property valuation
Existing interest only customers
Existing interest only customers wishing to borrow additional funds or port must meet the current lending standards relating to interest only. This includes meeting the minimum income threshold. Existing customers who do not meet current lending standards for interest only would need to switch their repayment type to capital and interest
Interest-only repayment vehicles
We require a plausibility check to be done on all interest-only mortgages as per the assessment guidelines in the table below. This will determine if your client can borrow the required amount on an interest-only basis. Documentary evidence must be submitted with the mortgage application and will be checked as part of the underwriting process.
Region |
Minimum Equity Requirement |
Region Postcodes |
---|---|---|
Greater London |
£300,000 |
BR1-BR7, CR0-CR2, CR4-CR5, CR7-CR90, DA1, DA5-DA8, DA14-DA18, E, EC, EN1-EN5, HA0-HA5, HA7-HA9, IG1-IG6, IG8, IG11, KT1-KT6, N, NW, RM1-RM3, RM5-RM14, SE, SM1-SM6, SW, TW1-TW14, UB1-UB8, UB10-UB18, W, WC |
South-East and East Anglia |
£250,000 |
AL, BH25, BN, BR8, CB, CM, CO, CR3, CR6, CT, DA2-DA4, DA9, DA10-DA13, EN6-EN11, GU, HA6, HP, IG7, IG9-IG10, IP, KT7-KT24, LU, ME, MK, NN13, NR, OX, PE1-PE5, PE7, PE13-PE19, PE26-PE38, PO, RG1-RG14, RG18-RG45, RH, RM4, RM15-RM20, SG, SL, SM7, SN6-SN7, SO, SP6, SP10, SS, TN, TW15-TW20, UB9, WD |
Rest of the UK |
£200,000 |
AB, B, BA, BB, BD, BH1-BH24, BH31, BL, BS, BT, CA, CF, CH, CV, CW, DD, DE, DG, DH, DL, DN, DT, DY, EH, EX, FK, FY, G, GL, HD, HG, HR, HS, HU, HX, IV, KA, KW, KY, L, LA, LD, LE, LL, LN, LS, M, ML, NE, NG, NN1-NN12, NN14-NN29, NP, OL, PA, PE6, PE8-PE12, PE20-PE25, PH, PL, PR, RG17, S, SA, SK, SN1-SN5, SN8-SN99, SP1-SP5, SP7-SP9, SP11, SR, ST, SY, TA, TD, TF, TQ, TR, TS, WA, WF, WN, WR, WS, WV, YO, ZE |
Repayment vehicle |
Criteria |
Documentary requirement |
Plausibility assessment |
---|---|---|---|
Existing endowment policy |
Interest-only mortgage amount must not exceed the expected maturity value – must have been held for 12 months |
Latest annual statement – the statement must have been issued no longer than 1 year previously |
Maturity value assessment is undertaken by the online application system based on pre-determined market rates of return of 4.5%. The current asset value, maturity date and monthly premium details should be input into the online application system |
Existing Stocks and Shares ISA; existing share, unit or investment trust (professionally managed) |
Interest-only amount must not exceed the calculated maturity value – must have been held for 12 months |
Latest statement – the statement must have been issued no longer than 1 year previously |
(Current balance evidenced) + (current monthly investment x term of mortgage in months)* must be sufficient to cover the interest-only mortgage amount on maturity – potential growth must not be included |
Sale of mortgaged property |
For residential mortgages a maximum LTV of 50% applies to the interest only part of the loan (so you know – you can borrow up to 85% LTV on a part and part basis). Where the sale of property is used as a repayment strategy, any lending beyond 50% LTV must be taken on a capital and interest repayment basis). There is also an additional requirement to have a minimum equity, after the capital and interest part of the loan in repaid, of:
|
|
|
If the bank statements are from the internet (i.e. screen shots or print offs from internet banking websites/applications) then they are acceptable if either (1) they have been stamped and certified by the issuing bank or (2) the statements show the sort code, account number and the applicant’s full name (or this information can be seen elsewhere and cross-referenced to full bank statements).
Conditions
Exclusions
Criteria
This facility is available for Barclays Residential Mortgages and Openplan Offset products, available via all channels. In cases where this arrangement is required, the following must be adhered to:
All other elements of Standard Lending Policy are to apply.
Notes:
For intermediary use only.
L-N
The minimum lease term we accept is 70 years.
Where the unexpired term of the lease is less than 70 years but it is confirmed that the lease will be extended as part of the mortgage application, these can be considered on a case by case basis.
Minimum Leasehold Terms
Lending can be for any purpose except for the purchase of a timeshare, business-related lending, funding of any stock market trading, gambling or to make monthly mortgage payments.
No discretion applies to this area.
The loan amount used in the loan to value (LTV) calculation is the aggregate amount borrowed (including reserve) and the valuation is the lower of the purchase price and the valuation obtained.
The following maximum LTV criteria apply; lowest LTV takes precedent:
Lending Scenario |
House <=£570k Flats <=£275k |
Houses >£570k Flats >£275k |
Purchase |
90% (see 'special schemes' table below where LTV > 90%) |
85% |
New Build – Houses |
90% |
85% |
Re-Mortgage “Like for Like” |
90% |
85% |
Re-Mortgage with additional lend for capital raising |
85% |
85% |
Additional Borrowing (Further Advance) |
85% |
85% |
New Build – Flats/Apartments/Maisonettes |
85% |
85% |
Applicant with more than 1 mortgaged residential property upon completion |
80% |
80% |
Re-Mortgage with any additional lend for Debt Consolidation |
80% |
80% |
Additional Borrowing (Further Advance) with any additional lend for Debt Consolidation |
80% |
80% |
Interest Only |
75% (50% if sale of property) |
75% (50% if sale of property) |
Part and Part (Part Interest Only, Part Repayment) |
85% |
85% |
Lending Scenario |
Mortgages greater than £5m but less than or equal to £10m |
Mortgages greater than £10m |
Purchase |
70% |
65% |
Re-Mortgage |
70% |
65% |
Special Schemes
See the Mortgage Schemes section for full details of specific residential mortgage schemes supported by Barclays.
Lending Scenario |
House <=£570k Flats <=£275k |
Houses >£570k Flats >£275k |
Family Springboard |
100% |
100% (Max £500k loan) |
Family Sale |
95% (based on of the discounted purchase price) AND a maximum 90% of the open market value. |
85% of discounted purchase price (or 85% of valuation where lower) |
Mortgage Guarantee Scheme | 95% | N/A |
Shared Ownership – Purchase |
**90% (based on the “share” being purchased) |
**85% (based on the “share” being purchased) |
Right To Buy |
***95% (based on “discounted” purchase price) |
***85% (based on “discounted” purchase price) |
Re-Mortgage with additional lend to repay equity loan in full/ staircase to 100% (Help to buy, shared equity and shared ownership schemes) |
**85% |
**85% |
Shared Ownership – Re-Mortgage (like-for-like) |
**90% (based on the “share” owned) |
**85% (based on the “share” owned) |
First Home Fund (Scotland) |
***85% |
***85% |
Shared Equity – Purchase, remortgage & further advance (where not repaying equity loan in full) |
***85% (based on purchase price/value less equity loan) |
***85% (based on purchase price/value less equity loan) |
Shared Ownership – Re-Mortgage with Capital Raising |
**85% (based on the “share” owned) |
**85% (based on the “share” owned) |
Shared Ownership – Stair casing (partial) |
**85% (based on the “share” being purchased) |
**85% (based on the “share” being purchased) |
Help To Buy Equity Loan Schemes- Purchase |
75% (80% in Scotland) |
75% (80% in Scotland) (N/A loans >£500k) |
** Product availability is based on the “discounted” purchase price or “share” being purchased, as appropriate.
*** Product availability is based on the full market value.
Notes:
A property is classified as 'mixed use' if there is any element of commercial use – ie, it is used in part for non-residential purposes, such as a shop, doctor's surgery or office. This includes situations where the property itself is wholly residential but there is a commercial use of adjoining/surrounding buildings or land included in the mortgage security – such as stables or sub-let cottages.
The decision to lend will be based on:
All mixed-use properties fall outside of standard policy and will be assessed by an underwriter on their individual merits.
In all cases, the local authority planning classification must be solely residential.
Please note that properties classed as ‘Live/Work Units’ are not acceptable for either Buy to Let or Residential lending.
At least 40% of the property must be used as the applicant's main residence and the remainder must be used exclusively by the applicant for their own business purposes.
Mixed-use properties are limited to 80% LTV and certain commercial uses will not be considered:
Mixed-use properties are not acceptable for Shared Ownership/Equity nor Buy To Let.
Further standard lending conditions will apply to mixed-use properties. Please refer to our lending criteria pages for more details.
What is the mortgage guarantee scheme?
The scheme helps home buyers get onto or move up the housing ladder with a minimum deposit of 5% of the property purchase price.
It’s available from 19 April 2021 until 30th June 2025 for residential mortgages on properties worth up to £600,000. We’re offering 95% loan-to-value mortgages with a maximum loan size of £570,000 for houses and £275,000 for flats. A range of fixed-rate mortgages are available, including a 5-year fixed-rate mortgage.
The guarantee applies to the lender, allowing us to offer 95% loan-to-value mortgages. It doesn’t change your obligation to repay the mortgage.
Who can apply through us?
First-time buyers and existing homeowners can apply for the scheme, as long as they have a deposit of at least 5% of the property purchase price.
It’s suitable for
It can’t be used to
Our definition of a 'new build' is
The maximum LTV is 90% for houses and 85% for flats and maisonettes. For remortgaging or additional borrowing, the maximum LTV is also 85%.
Builder’s deposit and incentives
Builder financial incentives are acceptable provided the incentive does not have to be repaid and the builder/developer does not intend to register a charge against the property.
It is acceptable for financial incentives to be used towards funding the deposit, provided the borrower is funding at least 5% of the purchase price from their own funds (this may include a gift from a relative).
Where the combined value of any financial incentives exceeds 5% of the valuation (or purchase price where lower), the amount of the incentive greater than 5% will be deducted from the valuation (or purchase price where lower) and the LTV, for the purposes of calculating the maximum loan amount, will be calculated based on the resultant value:
Example (new build house):
Lower of: Valuation/ purchase price |
£200,000 |
---|---|
Builder cash Incentive |
£22,000
This equates to 11% of the valuation/ purchase price. |
Incentive amount in excess of 5% limit |
£12,000 (6%)
This must then be deducted from the valuation of £200,000
£200,000 - £12,000 = £188,000 |
Maximum loan |
£169,200
(90%* of £188,000) |
*Refer to current criteria for the prevailing maximum LTV
Upgrades forming an integral part of the property would not be considered as a part of the 5% cash incentive threshold. Examples of these would be:
In all instances where there is an incentive being offered, the applicant(s) must provide full details of the type and amount as part of the application submission and all such incentives must be declared to the valuer on the UK Finance Disclosure form in order that they can be taken into account when valuing the property.
Offer validity
A mortgage offer is valid for six months from the date we receive the application.
New-build property sales are often agreed off plan, or in the early stages of development. As a result, completion might take longer than six months. If an offer doesn’t complete within six months, we can usually extend it for another six months without the need for you to submit the status documents again.
We’ll only be able to extend the offer period with confirmation that the customer’s circumstances haven’t changed significantly since the original application was submitted – you’ll need to confirm this using the New Build Mortgage Offer Extension form. We’ll also need to assess the application again against current lending standards, and carry out a new credit search.
If there’s been a significant change to the customer’s circumstances, we’ll need to carry out a full underwriting assessment, including a status assessment. We might need to offer the customer a different mortgage product. The customer will need to cover all costs involved.
Second properties
If a customer already owns a property (and they’re not selling that property), our maximum LTV is 80%. Under specialist schemes like Help to Buy, a customer won’t be able to buy a new property if they own any other properties (including residential, buy to let or held-on-permission to let).
Sub-sales and sale contract reassignments
Sub-sales or sale contract/lease reassignments happen if a new-build property is currently contracted for sale to a third party and hasn’t yet completed.
These are acceptable as long as
We’ll decline any transaction that doesn’t meet all of these criteria.
More information about new builds
We are happy to consider a mortgage for an applicant who has existing properties (whether mortgaged or unencumbered).
Where the applicants have an existing/second residential property that has not been sold and there is reason to believe is not to be sold before completion (includes where held/to be held on a PTL basis), an application is acceptable subject to a maximum LTV of 80% applying to the property being purchased providing:
* ‘Relative’ or ‘Partner’ is defined as ‘The borrower’s spouse or civil partner; a person (whether or not of the opposite sex) whose relationship with the borrower has the characteristics of the relationship between husband and wife; or the borrower’s parent, brother, sister, child (including stepchild), grandparent or grandchild.’
Additional borrowing and remortgages can be considered where any additional funds are for essential home improvements.
Where any existing property is held on a Buy to Let basis, it is acceptable to consider lending up to a maximum LTV of 90%.
If the mortgages held are on a Buy to Let (BTL) or Permission to Let (PTL) basis, then the contractual monthly payment will be treated as commitment when assessing affordability (rental income should be evidenced as self-employed income).
For background Buy to Let Mortgages, you will need to provide one of the following
For background PTL Mortgages you will need to provide
Where the original loan can NOT be confirmed on a Buy to Let or Permission to Let basis
Acceptable warranties include:
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 maximum number of borrowers allowable is 4. Where there are 3 or more applicants, the Barclays Group will use only the 2 highest incomes when applying income multiples and assessing affordability. All financial commitments from all applicants will be taken into account when assessing affordability.
Only 2 borrowers are allowed for Openplan Offset Mortgages.
O-Q
A mortgage offer is valid for a 6-month period from the date the mortgage application is received by our teams.
Any offer that does not complete within this period must be re-submitted as a new application with the exception of ‘New Build Purchase’ applications which can be assessed against current lending standards with a refreshed credit search and re-offered for a further period of 6 months with the existing product or a product from the current range.
This is subject to receiving confirmation that there has been no material change to the customer(s) circumstances since the original application was submitted using the New Build Mortgage Offer Extension Declaration form. If there has been a material change, the application will be fully re-assessed against current lending standards.
An updated valuation should be requested in all scenarios with the exception of where the tolerance, referred to below, applies and for ‘New Build Purchase’ applications where the original valuation will be accepted. Any subsequent extension requirement will be subject to full re-submission.
The valuation validity period aligns with the offer validity period of 6 months from submission with the exception of ‘New Build Purchase’ applications which are re-offered for a further period of 6 months with the valuation validity aligned to the new offer validity period.
Where notice has been given that the proposed property has fallen through and a new property found, a new application must be submitted unless purchase price and mortgage amount are all unchanged and completion is anticipated within 6 months of the original submission. A product will need to be selected from the current range available unless the original product remains available.
For non new build purchase and remortgage we also offer 2 week extension
Applications can only be extended once and a new offer will be produced for the solicitor so they can proceed with the completion.
Overage is an agreement in which the seller can obtain a portion of the future value of a property. This increase in value can be attributed to a future development. Where a property is sold to a buyer, and it’s worth more when the property is sold on, the seller may be entitled to claim back some of the difference in sales prices. For this to happen, the value needs to have increased for one of the reasons set out in the overage deed – for example, the land has planning permission.
‘-Negative-’ overage can apply where the buyer covenants with the vendor on the sale of the property that, eg, no development will take place on the property that the vendor does not permit or without the vendor’s consent.
To ensure the vendor gets the benefit of the overage payment the deed is usually secured by any or all of the following methods: a charge or restriction secured against the property, a direct deed of covenant or a guarantee.
They are usually very complicated arrangements and are have sometimes been found to contain defective drafting.
It is not acceptable to lend to new customers where there is an existing Overage agreement or where it is intended to create one on completion of the purchase/re-mortgage.
Where a customer has made overpayments, it is important you look at both section 3 and 6 of the ESIS document.
Section 3 will include the balance after any overpayments have been accounted for.
In section 6 you will see the current outstanding balance without overpayments being considered. For this reason, the balance will be higher in section 6 if overpayments have been made.
The monthly payment figure is based on the full outstanding balance (this is before any overpayment is considered). When the rate switch has completed the customer will be sent a letter which will advise of the monthly payment considering any overpayment balance.
Customers can choose to apply their overpayments to the mortgage balance outstanding, but it is important to check if any early repayment charges would apply.
See images below for further clarity:
Section 3 of the ESIS
Note: This is the section showing the balance with over payments taking into account.
Section 6 of the ESIS
Note: Here the mortgage balance is higher as the customer has an overpayment balance of £6846 which is not being taken into account and why the balance is different between this section and section 3. The monthly payment value is based on this higher balance but there is no need to query this with us and you can advise your customer they will receive a letter that details the monthly payment after their rate is changed which will be a lower figure as it will take into account the overpayments held.
Your clients can apply for permission to let if they’re looking to move away from a property temporarily and let it out, for example, if they’re relocating for work or are a member of the armed forces. Before they apply, they’ll need to meet these conditions
If we give your client consent to let their home, there will be some new conditions for their mortgage during the tenancy agreement
We offer additional options if your clients want to let their property. See ‘Short-term letting’ for more information.
Porting allows mortgage customers to carry forward (‘port’) their existing mortgage product, including the interest rate and any Early Repayment Change (ERC) conditions, to a new mortgage.
Existing customers can port when they are redeeming their existing mortgage and purchasing a new property (moving home). Please note it is not possible to port a product onto a property that the customer already owns.
Criteria
Like for like porting - Where an existing mortgage customer wishes to port their mortgage to a new property on a “like for like” (or reduced) basis and the lending proposition is outside of current lending standards, including affordability and “score”, such requests can be considered provided:
There is no increase to the current borrowing amount outstanding
There is no increase in the term of the current mortgage
All parties to the current mortgage remain unchanged
There is no arrears history within the last 12 months on the current mortgage (with the exception of technical arrears)
Note: Customers may not port their mortgage product where Permission to Let has been granted.
Help to Buy and Family Springboard
Our Help to Buy and Family Springboard products are not portable. However, customers will have their Early Repayment Charge (ERC) refunded if they repay the existing mortgage in full and request an equivalent Barclays residential mortgage product to purchase their new property. Please contact 0345 073 3330 for support obtaining this.
Each request is subject to application and must meet our standard lending policy, as well as the following
There are some property types which are not deemed suitable security for the Barclays Group and so in all cases lending will be declined. These scenarios are listed below:
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:
The above lists are not exhaustive. Please contact the Intermediary Support Team for further details.
R-Z
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 the following
• 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
Mortgage Reserves are no longer available for new mortgage applications, be they Offset or Non-Offset. Customers may still have a pre-existing Mortgage Reserve that they can use but increases to this aren’t available.
Flexible mortgage customers requiring additional borrowing:
Customers are able to apply for a further advance.
Offset customer(s) requiring additional borrowing will be able to either:
Offset customer(s) moving home and requiring additional borrowing on their main mortgage will be able to either:
In all of the scenarios above, any applicable early repayment charge on the existing Offset mortgage will be waived (although other fees may apply, eg an administration fee).
Please note: Our interest only limit product maximum LTV applies across the mortgage and any reserve that the customer might have.
All mortgage applications will be assessed in terms of length of time living in the UK and rights to reside. There will potentially be further checks dependent on the application LTV.
|
Living in the UK for more than 1 year |
Living in the UK for less than 1 year |
---|---|---|
Applicant is a British citizen, Irish citizen or has Permanent Rights to Reside (PRR), Settled Status or Pre-settled status (EU settlement scheme) |
Standard criteria applies |
Maximum 90% LTV. Additional underwriter checks apply* |
Applicant does not have Permanent Rights to Reside (PRR), Settled Status or Pre-settled status (EU settlement scheme) |
Maximum 90% LTV, additional underwriter checks will apply if LTV is more than 75%* |
Available for Premier/Wealth qualifying customers. Maximum 75% LTV. Additional underwriter checks apply* |
*Additional checks
We can’t consider applications from refugees until they’ve got a permanent right to reside in the UK.
We are happy to assist with the purchase of your client's property under the Right to Buy (RTB) and voluntary Right to Buy (VRTB) scheme, providing they meet our standard lending policy.
Our main criteria for RTB are:
Please note that:
All applications are to be submitted on a full status basis. In addition to the supporting documentation required as per our Requirements Tables, your client will need to provide a copy of the letter from their landlord/local authority confirming the details of their RTB offer.
In Scotland, we will attempt to generate an Automated Valuation (AVM) for properties that fit the Barclays criteria. We will alternatively accept a transcript of the Mortgage Valuation provided as part of the Single Survey report (when the customer wishes to use one), as long as the surveyors are on the Barclays panel. However, AVMs or transcripts do not apply to Scottish New Build properties where we will instruct a valuation as part of the mortgage application process (a survey fee will be payable only for properties above the £2M threshold, please see our Tariff of Charges for further details).
For more information on Barclays approved surveyors in Scotland please contact 0345 073 3330*
Scottish Surveyor Panel List
Please see the list below for the Scottish Surveyors who are on our approved panel.
Barclays Panel List
First Surveyor Group:
Note: In Scotland it is essential the home report is dated within the last 90 days prior to the application being submitted in order to be acceptable.
When a second/subsequent charge is secured against the subject property, you should provide us with the following information:
If the charge will not be repaid before/upon completion we will require a Deed of Postponement (DoP) prior to release of funds.
If the charge will be repaid in full upon completion, solicitors must control the funds advanced and ensure the second charge is discharged. The legal costs associated with this will be at the applicant’s expense.
No new mortgages will be accepted at the present time on self build mortgages or stage payment projects, this includes demolish and rebuild scenarios.
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 maximum amount of Limited Company PAT that can be considered as part of the overall affordability assessment is the lower of:
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’
What to do if your client only has 1 year trading 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.
Under shared equity schemes, the customer owns the property outright, usually with the right to pay off the equity loan in parts. In shared ownership schemes, the customer only owns a share in the property. The customer pays for the property by way of:
The applicant must be funding at least 25% of the purchase price of the property by way of mortgage and their own resources. Applications of up to 85% are acceptable. Applications must be on a standard repayment basis i.e. NOT interest only.
The applicant must provide a minimum 5% deposit from their own resources – this may include a family gift.
The equity loan term must be the same or longer than the mortgage term agreed. For Help to Buy Equity Loans, the equity loan term can be stated as shorter than the mortgage term, as it will be extended in line with the first charge.
Barclays UK MUST be able to take a first legal charge prior to any charge registered by the Scheme Provider.
Additional Borrowing
Can be considered providing Scheme Provider permission is obtained and all areas of this section of Lending Guidelines are met:
Scenario | Maximum LTV |
Capital raising to repay equity loan in FULL | 85% of market value |
Capital raising to buy out co-owners share or partially repay equity loan | 85% of market value |
Debt consolidation (repayment of the equity loan is not considered debt consolidation for these purposes) | 80% of market value |
Notes:
*Scottish Government Schemes:
Barclays supports the following Scottish Governments schemes
First Home Fund
This scheme aims to help first-time buyers in Scotland buy their own home. It provides an interest-free equity loan of up to £25,000 or 49% of the purchase price
Additional Borrowing
Can be considered providing Scheme Provider permission is obtained, where required, and all areas of this section of Lending Guidelines are met:
Scenario | Maximum LTV |
Capital raising to repay equity loan in FULL | 85% of market value |
Capital raising to buy out co-owners share or partially repay equity loan | 85% of market value |
Debt consolidation (repayment of the equity loan is not considered debt consolidation for these purposes) | 80% of market value |
Notes:
Open Market Shared Equity Scheme (LIFT)
New Supply Shared Equity Scheme
Help-to-buy Scotland
Under shared ownership schemes, the customer part-owns and part-rents the property from the Scheme Provider under the terms of a shared ownership lease. With shared ownership, the applicant must be buying a minimum 25% share of the property. Purchase applications of up to 90% (subject to product availability) of the discounted purchase price/share of the property being acquired are acceptable with any balance being funded from the applicant’s own resources.
Additional Borrowing can be considered where consent has been obtained from the scheme provider to purchase an additional share in the property provided we are not lending above 85% of the current market value of the share which the customer will own after staircasing.
Re-mortgages from another lender are acceptable provided agreement from the scheme provider is obtained and all areas of this section of lending guidelines are met i.e. the new mortgage should be for the same amount, unless staircasing or additional borrowing is required to buy-out a co-owner.
Notes:
Products under the NewBuy and Help to Buy schemes are not available for any Shared Ownership proposition.
If the scheme does not meet all the above criteria then Barclays will not lend.
Depending on the circumstances of your client's application, supporting documents may be required for the mortgage to be assessed and underwritten. By providing the documentation we need at the outset you’ll help us make the experience for you and your client as smooth and efficient as possible.
Submitting applications via MAX will enable us to provide the best possible service.
For details of documentary requirements for employed income, please see Criteria and Packaging Guide [PDF, 790KB].
People who have residential mortgages with us can let out their property, or part of their property (for example, a room or an annexe), using short-term letting platforms we’ve approved. They don’t have to get permission from us, as long as
Online short-term occupancy platforms we accept
You should let your client know that we’ll still send correspondence to the property if they chose it as their correspondence address, even if it’s being rented out.
Rental income from renting out this property or part of it (for example, using a short-term letting arrangement) can’t be considered for affordability. It should be deducted from the overall amount of rental income an applicant provides evidence of.
We offer additional options if your clients want to let their property. See ‘Permission to let’ for more information.
The valuer must be able to value the property on a residential basis ignoring any possible business usage.
Right to buy pre-emption clauses giving the council first rights for an onward sale within the first 10 years are acceptable.
If the valuation is satisfactory then the property will constitute suitable security if ALL of the following requirements are also met:
Restrictions on re-sale/disposal
The S.106 agreement may stipulate that the Local authority has the right to nominate a buyer (meeting defined eligibility requirements) when the property is sold or disposed of.
Discount market sales will typically have a S.106 present to ensure the discount remains for future sales, these are acceptable provided there is a mortgage in possession clause.
Where the restriction includes a nomination period, these are acceptable provided the nomination period is no more than 3 months.
For new interest-only mortgage customers, the term can’t extend into retirement.
Our usual mortgage term is between 5 and 40 years (25 for interest only, including part and part).
Certain products also have specific requirements around their maximum mortgage term – for example, Family Springboard. See ‘Lending products’ for more details about specific products.
Transactions at undervalue can occur where a property is being or has been acquired by way of a Deed of Gift, or for less than the full market value. For such a transaction to be acceptable to Barclays the vendor must be a relative of the applicant or the applicant’s landlord.
Where an Advisor is aware that a mortgage request is to be a transaction at undervalue, Mortgage Services must be notified at initial application stage to ensure the scenario is acceptable based on the above relationship requirements.
In such cases problems may arise under the Insolvency Act 1986. Under Section 339 of the Insolvency Act 1986, a trustee in bankruptcy has the right to apply to the Courts to set aside a transaction at an undervalue, if the transferor subsequently becomes bankrupt within 5 years of the date of the transfer.
The period during which the transfer can be set aside is reduced to 2 years if a Declaration of Solvency is obtained at the time of the transfer and the transferor does not become insolvent as a result of the transaction.
Where it is confirmed that the applicant is purchasing their property at an ‘undervalue’ as defined above, a minimum deposit of 5%, based on the lower of valuation or discounted purchase price, must be provided from the applicant’s own resources. It must be confirmed that the property being bought is not that being sold by a dependant relative who will then remain in the property after the sale takes place. If this is the case, then the application must be declined.
The above deposit requirement does not apply to Springboard Mortgage transactions where a minimum 5% deposit is required based on lower of valuation and discounted purchase price with a further 10% cash deposit to be held in line with standard requirements applicable to a Springboard Mortgage Product.
Customers can appeal against Valuations where the following apply
For remortgages 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.Appeals can only be considered when submitted against a physical valuation (i.e. not an AVM).
This applies to both Residential and Buy to Let cases.
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 mailto: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.
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, especially when an AVM has been accepted for lending purposes.
Your client may wish to contact Countrywide Surveying Services on 0800 012 6995, e.surv Chartered Surveyors 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 remortgages on properties up to £1m in value (up to £2m in London and South East), where the loan to value required is 80% (subject to product availability) or less.
For purchases on properties up to £1m in value (up to £2m in London and South East), AVMs can be used on any LTV (subject to product availability).
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. Where an AVM is not provided an alternative valuation will be undertaken.
AVMs are only suitable for further borrowing where the latest valuation was a physical one and not an AVM.
In all further borrowing cases where the latest valuation was an AVM, a Non-Disclosed PRA valuation must be requested.
* 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