Residential lending criteria A to Z | Barclays Intermediaries

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 applications can exceed the term of the main mortgage account but must not exceed 40 years from the date the mortgage originally began, or 25 years for a mortgage with any element that is interest only. For Family Springboard mortgages, additional borrowing can’t be taken while the deposit is locked, or exceed 35 years
• Interest only – the total new aggregate amount of interest-only borrowing, including any existing borrowing, must meet current interest-only standards, including for the repayment plan, plausibility assessment and minimum income requirements
• Repayment plan and LTV – changes in the repayment plan that the lending was already assessed against must meet the current interest-only standards. This applies whether the additional lending is on an interest-only or repayment basis
• For any applications involving the consolidation of an existing Mortgage Current Account Reserve debt, a condition of offer must be accepted by the customer that their Mortgage Current Account Reserve limit shall be reduced to zero/capped and any rebalancing feature should be switched off
• Additional borrowing is not allowed to support any demolish and re-build scenarios which are seen as a clear breach in Mortgage Terms & Conditions entered into by the borrower
• Since 16 October 2019, customers can only hold up to nine accounts in addition to their main mortgage. 

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. 

1. Keep the offset feature and borrow more against the same property. You’ll need to submit an application for a new offset mortgage from our offset product range. The application needs to be for the total of the old mortgage balance plus the further borrowing (the total mortgage amount).
2. Keep the offset feature and borrow more when buying a new property. You’ll need to submit an application for the new total mortgage amount, selecting a product from our current offset range.
3. Remove the offset feature and borrow more against the same property. Contact us for a bespoke rate switch product code, and you can submit an application to switch their mortgage to an equivalent, non-offset product on the same rate. Once complete, you can submit a new application for the additional borrowing.
4. Remove the offset feature and port the mortgage to a new property. If your client wants to keep their current rate when moving and borrow more, but no longer needs the offset feature, contact us for a bespoke product code. We’ll port their current rate to an equivalent, non-offset product on the same rate.

County Court Judgements (CCJs/defaults)

Adverse credit as detailed below must be declined:

• Any unsatisfied CCJ
• More than 1 satisfied CCJ and the latest is registered within the past 3 years
• Satisfied CCJs totalling more than £200 and the latest is registered within the past 3 years
• More than 3 satisfied defaults* and the latest is registered within the past 3 years
• Satisfied defaults* totalling more than £200 and the latest is registered within the past 3 years
• Any outstanding default, irrespective of amount
• If it is identified that a limited company, in which an applicant has greater than 15% shareholding, has any outstanding judgements totalling more than £5,000

*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 80^th 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 an interest-only basis up until the age of 75. For repayment mortgages, terms may extend beyond 75 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.

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)

• 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.

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:

• Hire Purchase Agreements including Mail Order Payments, Bank Loans, Finance Loans, Payday Loan Advances (full amount outstanding applies) or Second Charges
• Future Commitments - commitments that become due during the term of the mortgage must be included in the affordability assessment. This includes deferred credit payments and delayed payments and should be entered in the 'deferred credit' dropdown box on the financial commitments page on the mortgage application system
• In addition to being included in the Special Scheme information in Borrowing Requirements, all Shared Equity loan balances, including England & Wales Help to Buy Equity loans, must be recorded within Financial Commitments under 'Shared Equity' if interest is due within the mortgage term. The system will then take 3% per annum of the outstanding balance of the loan as a commitment for affordability. Please note: only in circumstances where no interest is due on the shared equity loan at any stage within the mortgage term (such as the Scotland HTB equity scheme) or the equity loan is being paid off in full as part of the application, should the equity loan not be recorded as a Financial Commitment If repaying part of an interest charging equity loan, these should be input as two Shared Equity commitments – one for the Shared Equity loan balance to be repaid (marked ‘to be repaid’) and one for the Shared Equity loan balance to remain (marked ‘not to be repaid’)
• 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 automatically be 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.
• 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
• The running costs of any unencumbered second property need to be included in the affordability assessment – please manually enter figures on the Commitments screen. This should include
  • Gas and electricity
  • Water
  • House insurance
  • Council tax
  • Ground rent/service charge
• Guarantors: 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 the above requirements
• Regular Pension Payments – including any additional voluntary payments (such as AVCs) being paid regularly from income. One-off contributions – for example from an annual bonus – can be disregarded (pension contributions will be calculated automatically as part of the affordability assessment. They shouldn’t be input as part of the application process)
• The cost of any bridging loan
• Court orders relating to maintenance payments or judgement debts
• Child Support Agency (CSA) payments
• School fees and child care 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 or shared ownership rent

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 which is to be repaid from the new proposed mortgage advance can be ignored provided a specific offer condition is made to this effect
• Any unpaid tax evidenced from the HMRC tax overview document must be treated as a commitment in the period it falls due
• Where an applicant is in receipt of benefit income, please ensure any associated regular costs incurred by the customer – for which this benefit income is intended – is included as a commitment. For example, if the applicant is claiming Personal Independence Payments (PIP), it may be appropriate to record any regular care costs.
  

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

• 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 does not employ anyone (other than the applicant(s) themselves)
• The applicant(s) collectively own 100% shares
• The applicant’s current contract equates to at least £218 per day or £50,000 per year (gross)
• Mortgage Loan-to-Value is ≤ 90%

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.

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.

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.

• Applications to be submitted with a deposit from 0% to 9.99% (including any application fees)
• LTI at 4.0 times, however, if applications earn over £50,000 individually or collectively this will go up to 4.49 times
• Maximum loan amount of £500,000
• Maximum term of 35 years
• Applies to purchases only, but not restricted to first-time buyers
• Repayment type must be standard capital and interest, ie not interest-only
• Applicants can only be party to 1 Family Springboard Mortgage; however, there is no restriction to the number of Family Springboard mortgages that helpers can support
• Helpers must put 10% of the purchase price into a Helpful Start account. The deposit monies are to be held for a period of 5 years from mortgage completion subject to satisfactory mortgage payment history throughout that period
• A legal charge must be obtained over the Helpful Start account deposit monies before any mortgage monies are released and the deposit account must be frozen for the period required to support the mortgage. While the charge is in place the Helpful Start account is not covered by the Financial Services Compensation scheme
• The Helpful Start account holders must obtain Independent Legal Advice, to be evidenced by Mortgage Services prior to the release of any mortgage monies. The borrower and the Helper may have the same solicitor for the Independent Legal Advice (though this is dependent on the discretion of the solicitor’s firm)
• Family Springboard Mortgages are not available on new build properties
• It is unacceptable for Family Springboard applications to be submitted where the property is to be let from the outset; this includes armed forces
• Family Springboard mortgages are not available under the Family Affordability Plan (Joint Borrower/Sole Proprietor policy)
• Family Springboard is not available for shared equity or shared ownership propositions
• No additional borrowing is allowed during the first 5 years or while the security deposit funds are being relied on to support
• Standard policy rules apply with regards to affordability, income multiples and adverse credit
• All applicants must be UK/EU/EEA national OR have permanent rights to reside in the UK – this is to be evidenced, usually by the production of passport documentation.

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

• 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 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.

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 print out 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 customers 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

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):

• Sole application – the applicant must have a gross income of at least £75,000
• Joint application – one applicant must have a gross income of at least £75,000
• Joint application – where no individual income is over £75,000, joint gross income must be at least £100,000

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:

• An existing endowment policy
• An existing stocks and shares ISA
• An existing (minimum 12 months) share, unit, or investment trust (professionally managed)
• Sale of mortgaged property

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:

• £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 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.

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).

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.

• If the property is leasehold, please ensure you include any ground rent or estate rent charges within the expenditure field on the mortgage calculator and ensure it is included within the mortgage application.
• In the event the freehold is also owned by the leaseholder then we would not be able to provide a mortgage to them however, we may accept applications where the freehold is owned by a limited company where the leaseholder is a named shareholder/director.

Minimum Leasehold Terms

• The minimum lease term we accept is 70 years at the point of application. Where the lease is under 70 years at the point of application these will only be considered where the lease is being extended within the mortgages transaction and any offer would include a condition to ensure the lease is extended by the legal representatives for the application.

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:

Special Schemes

See the Mortgage Schemes section for full details of specific residential mortgage schemes supported by Barclays.

** 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:

•  Product availability for transactions at undervalue or where there is a builder/vendor deposit is based on the full market value.
• When calculating LTV the aggregate loan amount used should not include the capitalised Barclays product fee applicable to that application.
• The Affordability Assessment and lending for income multiples is to be based on the total advance including the addition of any fees.
• Where the loan size is >£5m, underwriters retain the discretion to reduce the maximum LTV, based upon individual circumstances.

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:

• Whether or not the property is identifiable as a residence
• Whether or not the property is saleable as a residence
• Whether the property is classified as residential under planning legislation
• The value of the property as a residence

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:

• Fast food or sandwich shops
• Care homes
• Kennels
• Catteries
• Caravan Parks
• Working Farms

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.

Mortgage Boost (Joint Borrower Sole Proprietor) is a proposition that lets you be named as a mortgage applicant, even if you’re not also a legal owner of the property.

Conditions

• Available in England, Wales, Scotland and Northern Ireland
• All proprietors must also be borrowers
• All non-proprietor borrowers who live (or will live) in the mortgaged property must sign an occupancy form
• All non-proprietors must take independent legal advice that is evidenced by a solicitor's letter
• Where the proprietor has an existing residential property that isn't being sold, the maximum LTV is 80% (residential only)
• All other standard LTV limits apply
• All borrowers must sign the property's mortgage deeds
  
  

Exclusions

• Not available on our Family Springboard, Right to Buy, First Home Fund or Help to Buy schemes
  
  

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:

• The applicants must clearly state the requirement for this arrangement and the name of the sole property owner on the application form in the ’Additional information‘ section
• The borrower who is not named on the Title should sign an occupancy form if living in the property
• All borrowers must sign the Mortgage Deed
• It is mandatory that any borrower/s not named on the Title to the property obtain independent legal advice. This is to be confirmed to
• Mortgage Services by the solicitor providing the advice by returning our standard ILA documentation before any completion monies are released
• Joint Borrower/Sole Proprietor is not available with Help to Buy
• This arrangement can only be made where one of the joint borrowers is not also going to be a legal estate holder, ie will not be on the title deeds. Under no circumstances can a mortgage be agreed where any party named on the title deeds is not also going to be a mortgage borrower.

All other elements of Standard Lending Policy are to apply.

Notes:

• If the non-proprietor has any existing residential mortgage commitments (ie not BTL/PLT) these must be taken into account in the affordability assessment. Calculations should be made on a standard repayment basis over the remaining mortgage term at the current pay rate or stressed rate, whichever is higher
• Products under the NewBuy scheme allowing the maximum LTV to be increased to 95% on new build purchases in England for specific participating builders are available under this borrowing structure for the purchase of principal residence of named occupier/s
  
  

For intermediary use only.

Mortgage Boost (Joint Borrower Sole Proprietor) is a proposition that lets you be named as a mortgage applicant, even if you’re not also a legal owner of the property.

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

• Home buyers purchasing their home as their only residential property
• Single or joint mortgage applications
• Home buyers who want capital repayment mortgages

It can’t be used to

• Purchase a new-build property
• Purchase a second home or a buy-to-let property
• Take out a commercial mortgage
• Take out an interest-only mortgage

Our definition of a 'new build' is

• A property that’s been registered for two years or less
• A property that’s being sold for the first time by the developer, regardless of how long ago it was built or whether it’s been rented out before being sold
• Newly-converted properties

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):

*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:

• White goods (where not included as standard specification)
• Floor coverings
• Integrated lighting (downlighters)
• Kitchen upgrade, including tiling and worktop
• Bathroom upgrade
• All electric upgrade – i.e. additional sockets, TV points, etc.
• PV (photovoltaic) panels
• Turfing/landscaping

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

• The valuer we instruct is aware of the nature of the transaction
• The LTV is less than 70% of the purchase price or valuation, whichever is lower
• The total mortgage lending is less than the contracted sale price to the third party 
• We have evidence that all deposit funds are either from the applicant’s own resources, a gift from a relative, or a combination of these
• There’s no family or other relationship between any applicant and the seller or third party

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:

• The new property being purchased is for owner occupation or will be occupied by a dependent relative* of the applicant
• The property being bought is not that being sold by a dependent relative who will then remain in the property after the sale takes place. If this is the case, then the application must be declined
• Any dependent relative must be occupying the property rent free

* ‘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

• A copy of the original BTL mortgage offer 
• A letter from the lender confirming it is a BTL. If they hold any Woolwich/Barclays BTL mortgages, simply detail the account numbers for us

For background PTL Mortgages you will need to provide

• A letter from the lender confirming this

Where the original loan can NOT be confirmed on a Buy to Let or Permission to Let basis

• Any existing mortgage or secured loan which has not been evidenced as a Buy to Let/Permission to Let and will not be redeemed on completion of the new mortgage will be treated as follows
• For affordability purposes, the mortgage commitment on second properties will be calculated on a standard repayment basis over the outstanding mortgage term at the pay-rate or our stressed rate, whichever is the higher. Where a credit limit applies to the existing mortgage borrowing then it is this figure, including any undrawn monies, which should be used when assessing affordability 
• In addition, a fixed value commitment for each additional residential property needs to be applied to cover all other property costs. This is applied automatically by the system for residential mortgaged properties documented in the application
• Advisers need to add actual costs for non-mortgaged properties. This applies to all other residential properties, such as second residential homes, but not any property confirmed as being on a Buy to Let or Permission to Let unless the property is empty at the time of application and the landlord is responsible for paying costs associated with the vacant property (such as council tax and service charges)

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

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.

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

• Their mortgage account needs to be up to date, with no arrears. We’ll also check whether they’ve made payments on time for the last six months
  
• They’ll need to let out their property using a tenancy agreement we accept, like an assured shorthold tenancy
• They can’t let out their property on more than one tenancy agreement

If we give your client consent to let their home, there will be some new conditions for their mortgage during the tenancy agreement

• They can’t apply to borrow more against the property, though we might consider this if they need the money to improve or repair the property
  
• They need to tell their buildings and contents insurance provider about their new mortgage agreement, as it might affect their cover
• Your clients will need to contact us directly to discuss switching rates or making any other changes to the mortgage while they have permission to let. Please don’t submit this type of application

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

• Porting must take place either at the time the customer redeems the mortgage product they wish to port and completes on a new mortgage or within 90 days of redemption of the previous mortgage
• Any additional borrowing required must be taken out on a product that is available at the time of porting.
• Customers moving home who incur an Early Repayment Charge (ERC) on full redemption will have any ERCs refunded as long as they port their existing product, complete at the same time or within 90 days of redemption and the new mortgage is for at least 75% of their redeemed balance
• Ported applications that fail to complete within 90 days of redemption, will need to be updated to a non-ported case on a new product available at the time, and any ERC arising from the original product will not be refunded.
• Reduced Borrowing – A reduction in borrowing of up to 25% is allowed without incurring any Early Repayment Charges.
• Where a reduction in borrowing is above 25%, an ERC will be payable on the amount above 25%.
• Porting an Offset Mortgage – Customers moving home who do not require any additional borrowing are able to port in the normal way. Customers requiring additional borrowing can either select an Offset product from the current range for the total loan amount required, or they may port their loan balance to a Ported Tracker at their existing interest rate and then take any additional borrowing on a product from the current range.
• Mortgage Current Account Reserves – Some customers may have a Mortgage Current Account Reserve. These are not portable and if there are any drawn funds at the time of redemption they must be repaid. A new Reserve will not be offered on the customer’s new mortgage.

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

• The new mortgage must be at least 75% of the existing mortgage balance on the day it’s paid off
  
• Where the sale and purchase do not happen simultaneously, the new mortgage must complete within 90 days of the existing mortgage being paid off

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:

• Demolish and rebuilds
• Freehold flats and maisonettes
• Properties classed as ‘houses in multiple occupation’ where a licence from the Local Authority is required
• Live-work units

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:

• Contaminated land – typically from previous industrial use of the site
• Adjoining flats (granny annexe) – each case will be looked at individually
• Japanese Knotweed – please see separate policy section
• Agricultural restrictions – our policy position will depend on the extent of the restrictions
• Modern methods of construction – will require an individual assessment by a valuer
• Easiform cavity walled concrete – properties built before 1965, those with visible cracks or where adjoining properties are deteriorating will be declined
• Flats over shops/commercial premises – each case will be looked at individually
• High-rise blocks of flats/ Deck Access - Properties with deck area access can only be considered for good quality developments with no restriction whatsoever on mortgageability/saleability. Properties that have non-decorative timber cladding will be looked at individually.
• Mixed-use properties – please see 'Mixed-Use policy' page
• Section 106 properties- each case will be looked at individually depending on section 106 requirements. Please refer to S.106 agreement (S.75 in Scotland)
• Early steel frame construction – not normally considered suitable security but may be looked at by a surveyor if a Structural Engineer’s Report is obtained. Please contact the Intermediary Support Team for extra information

The above lists are not exhaustive. Please contact the Intermediary Support Team 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 the following

• Their latest payslip
  
• Their last payslip before the period of reduced income, if they have 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

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:

• Apply for a remortgage, selecting an Offset product from the current product range for the total loan amount required
• Apply for a remortgage to port their existing main mortgage balance to a Ported Tracker at the same interest rate, with additional borrowing taken on a product from our current range.

Offset customer(s) moving home and requiring additional borrowing on their main mortgage will be able to either:

• Apply for a new Offset product from the current product range for the total loan amount required
• Apply for a new loan porting their existing main mortgage balance to a Ported Tracker at the same interest rate, with additional borrowing taken on a product from our current range.

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.

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:

• We can lend up to 95% of the discounted price as long as this does not exceed 80% of the valuers' open market valuation – eg, if your client’s property is valued at £100,000 and the Local Authority are offering a discount of £35,000, the maximum loan we could consider would be £61,700 (95% of £65,000). However, it’s important to note that for product eligibility, the maximum LTV is based on the full market value, so in the same scenario the LTV for product purposes would be 62%
• Enhanced income multiples can be applied where an appropriate credit score is achieved
• Only the individual(s) entitled to the RTB may apply
• Remortgages will be considered subject to certain criteria. Contact our IBC for guidance

Please note that:

• Our charge must rank in priority to any charge registered by the Local Authority
• Flexible mortgages are available but the Reserve will always be set to nil
• Application fees can be added to the mortgage advance providing the total borrowing does not then exceed 95% of the discounted price
• We’ll need a Deed of Postponement (DoP) for voluntary Right to Buy applications
  

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

• e.surv
• J&E Shepherd
• Allied (Scotland)
• Graham & Sibbald
• Walker Fraser & Steele
• D M Hall
• Harvey Donaldson & Gibson

First Surveyor Group:

• First Surveyors Scotland
• Barr Brady
• Stephen J Ormand
• Buccleuch John Sale
• David Adamson & Partners
• Gabriel & White
• Torrance Partnership
• Dixon Heaney
• Whyte & Barrie
• Samuel & Partners
• Hardies
• Murray & Muir

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:

• 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.

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 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’

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:

• A conventional mortgage;
• a deposit from their own resources and;
• a “loan” provided by the Scheme Provider, referred to as an equity loan, which should be recorded as a commitment

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:

Notes:

• Product availability is based on the full market value. Please see the loan to value section; lowest LTV takes precedent.
• The equity loan will usually be a percentage of the current market value;
• Permission to Let is not to be considered unless there is specific agreement from the Shared Equity Scheme Provider.
• Any fee/interest payment (current or deferred) associated with the equity loan must be included as a commitment in the affordability assessment.

*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

• Available for new-build and second-hand properties
• At least one applicant must be a first-time buyer
• Minimum 5% deposit from own resources
• Total LTV must not exceed 85%
• The minimum mortgage amount is 25% of the purchase price
• The entire mortgage must be on a capital and interest repayment basis

Additional Borrowing 

Can be considered providing Scheme Provider permission is obtained, where required, and all areas of this section of Lending Guidelines are met:

Notes:

• Product availability is based on the full market value
• Please see the loan to value section; lowest LTV takes precedent
• Permission to Let is not to be considered unless there is specific agreement from the Shared Equity Scheme Provider

Open Market Shared Equity Scheme (LIFT)

• Available to first-time buyers to assist with the purchase of existing properties on the market
• Standard shared equity requirements as described above are to apply
• In certain cases, the Scottish government will retain a small share, referred to as a “Golden Share”, of a property (10%-20%) to prevent full staircasing in areas where first-time buyers find it difficult to purchase properties – e.g. the Highlands where there are few new properties built. This would then allow the government to have first refusal on purchasing the property back at full market price

New Supply Shared Equity Scheme

• Available to first-time buyers to assist with the purchase of new build properties
• As with the above open market scheme, standard shared equity requirements apply in addition to acceptance of “Golden Share” where this applies

Help-to-buy Scotland

• Please refer to the help-to-buy section

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.

• Applications must be on a standard repayment basis (ie not interest only)
• Providers and landlords must be registered and regulated by the Homes and Communities Agency in order for their schemes to be acceptable
• The Barclays Group must be able to take a first Legal charge against the customer’s leasehold interest in the property and consent given in the usual way for any second charge
• It is unacceptable for restrictions to be placed on resale of the property, except where these comprise the Scheme Provider having an option to buy back the customer’s share in the property at the full market value for a maximum period of 3 months, such that if the Scheme Provider does not wish to exercise the option to buy back, the lender can staircase to 100% (if necessary) and otherwise sell the property on the open market without any further restriction applying (provided always that the operation of any such resale provision does not prejudice in any way the operation of the mortgagee protection provisions in the lease
• Borrowing must be by way of a Barclays Residential Mortgage product
• The lease should be in the standard form produced by the Homes and Communities Agency incorporating a Mortgage Protection Clause

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

• They use an online short-term occupancy platform that’s on our approved list (see below)
  
• They agree the occupation under license and not using a tenancy agreement
• The property isn’t occupied by someone other than the owner for longer than 90 days in any 12-calendar month period, and for no longer than 30 days consecutively by anyone other than the owner
• Their buildings insurance is always valid
• They aren’t breaching any requirements or regulations of local and other relevant authorities
• For special schemes (for example, Help to Buy or shared ownership) they might need to get permission from the scheme provider before letting out any of their property. They might also need consent from any second charge lenders

Online short-term occupancy platforms we accept

• Airbnb

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:

• The maximum LTV is the lower of 80% of the open market value or 85% of the purchase price.
• S.106 agreements must contain a mortgage exclusion clause to protect the mortgage in the event that the registered provider defaults.

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