Residential | O-Q
Lending criteria – residential
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.
Overage is an agreement in which a vendor can obtain an element of future value from a purchaser that may accrue on a property due to future development. Where a property is sold to a purchaser and there is a rise in value when the property is sold on, which is attributable to the terms specified in the overage deed (eg, enhanced planning), the vendor may be entitled to ‘claw back’ an element of the difference in the first and second sale prices.
‘-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.
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.
- 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.
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
- Ex-local authority high-rise flats over 7 storeys
- 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 the Section 106 requirements
- 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.