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Residential Criteria

From near prime residential mortgages to shared ownership mortgages, our residential lending criteria may help you to place cases you struggle with elsewhere.

If you have a complex or difficult case, our business development team can talk you through your options.

Maximum number of applicants: four

Age limits: 18-79. Maximum age at end of term is 85 (including lending into retirement).

Self-employed applicants considered.

Contractors considered.

Adverse credit considered.

Credit score not required.

County court judgments (CCJs) and defaults

None in the last 36 months. Must be satisfied prior to the mortgage application.

Ignore if:

  • Less than £300 in aggregate and satisfied.

Missed mortgage/secured loan payments

None in the last 12 months and currently up to date.

Unsecured arrears

None in the last 12 months and currently up to date.

Maximum status

Must be currently up to date. Maximum two down in last 24 months.

Debt management plan (DMP)

Not acceptable.

Individual voluntary agreement (IVA)/debt relief order (DRO)/bankruptcy

Not acceptable.

Repossessions

Not acceptable.

Max plan LTV

90%.

County court judgments (CCJs) and defaults

None in the last 24 months. Must be satisfied prior to mortgage application.

Can be ignored where one of the following applies:

  • All CCJs/defaults were registered more than two years ago whether satisfied or not
  • All CCJs/defaults were satisfied more than 12 months prior to application regardless of date of registration
  • The CCJs/defaults in aggregate amount to less than £300, regardless of date of registration, and satisfied prior to mortgage application

Missed mortgage/secured loan payments

None in the last 12 months and currently up to date.

Unsecured arrears

Two in the last 12 months and currently up to date.

Maximum status

Must be up to date. Previous maximum status ignored.

Communication, utility and mail order

Performance ignored where the account balance is less than £500 (single or in aggregate).

DMP

Satisfactorily conducted for a minimum of 12 months.

Individual voluntary agreement (IVA)/debt relief order (DRO)/bankruptcy

Not acceptable.

Repossessions

Not acceptable.

Maximum plan LTV

90%.

County court judgments (CCJs) and defaults

None in the last 12 months (one in the last 24 months). Must be satisfied prior to mortgage application.

Can be ignored where one of the following applies:

  • All CCJs/defaults were registered more than two years ago whether satisfied or not
  • All CCJs/defaults were satisfied more than 12 months prior to application regardless of date of registration
  • The CCJs/defaults in aggregate amount to less than £300, regardless of date of registration, and satisfied prior to mortgage application

Missed mortgage/secured loan payments

None in the last 12 months and currently up to date.

Unsecured arrears

Two in the last 12 months and currently up to date.

Maximum status

Must be up to date. Previous maximum status ignored.

Communication, utility and mail order

Performance ignored where the account balance is less than £500 (single or in aggregate).

DMP

Satisfactorily conducted for a minimum of 12 months.

Individual voluntary agreement (IVA)/debt relief order (DRO)/bankruptcy

Greater than six years discharged.

Repossessions

Not acceptable.

Maximum plan LTV

85%.

County court judgments (CCJs) and defaults

CCJs: none in the last six months (one in the last 24 months).

Defaults: none in the last six months (two in the last 24 months).

Must be satisfied prior to mortgage application.

Can be ignored where one of the following applies:

  • All CCJs/defaults were registered more than two years ago whether satisfied or not
  • All CCJs/defaults were satisfied more than 12 months prior to application regardless of date of registration
  • The CCJs/defaults in aggregate amount to less than £300, regardless of date of registration, and satisfied prior to mortgage application

Missed mortgage/secured loan payments

None in the last six months and currently up to date.

Unsecured arrears

Two in the last 12 months and currently up to date.

Maximum status

Must be up to date. Previous maximum status ignored.

Communication, utility and mail order

Performance ignored where the account balance is less than £500 (single or in aggregate).

DMP

Satisfactorily conducted for a minimum of 12 months

Individual voluntary agreement (IVA)/debt relief order (DRO)/bankruptcy

Greater than three years discharged.

Repossessions

Not acceptable

Maximum plan LTV

80%.

County court judgments (CCJs) and defaults

None in the last 36 months. Must be satisfied prior to mortgage application.

These are acceptable where one of the following applies:

  • All CCJs/defaults were registered more than three years ago and satisfied prior to mortgage application.
  • All CCJs/defaults were satisfied more than 12 months prior to application regardless of date of registration.
  • The CCJs/defaults in aggregate amount to less than £300, regardless of date of registration, and satisfied prior to mortgage application.

Missed mortgage/secured loan payments

None in the last 12 months and currently up to date.

Individual voluntary agreement (IVA)/debt relief order (DRO)/bankruptcy

Bankruptcies/IVAs who have been discharged over three years ago and that have no residual debt may be accepted subject to individual assessment.

Repossessions

Applicants with repossessions are not acceptable.

DMP

An applicant that has had a DMP needs to be at least three years clear of this before applying.

The applicant must provide their previous 12 months’ employment history.

Proof of income

Latest three months’ payslips.

Latest three calendar months’ personal bank statements showing income and expenditure.

Contractors are considered.

PAYE contractors

Applicants employed on a PAYE contract basis must have had their contract renewed at least once, with at least six months to run.

Self-employed contractors

Minimum income requirement

  • There’s no minimum income requirement for contractors. We do however require receipt of three months’ personal and business bank statements.

Maximum LTV

  • Maximum 85% LTV applies. This isn’t restricted if two years or more track history. Subject to LTV product restrictions.

Contract term

  • Contractors must have a minimum of three months’ remaining on their contract at the time of application.

Contract renewal

  • The applicant must be able to evidence at least one contract renewal with a minimum of 12 months’ sector experience

Construction industry sub contractors

  • Contractors are treated as employed if paid net of tax (self-employed if paid on a gross basis).

Self-employed applicants are considered.

12 months’ trading

We’re able to consider self-employed applicants who’ve been trading for a minimum of 12 months.

  • Applicant must have 12 months’ previous track record in the industry in which they’re now self-employed. Evidence must be provided; for example, proof of income from previous employment
  • Maximum 85% LTV
  • Most recent three months’ personal and business bank statements must be provided
  • Self-assessment returns or SA302s aren’t accepted as proof of income on these loans.

Projection for the second year income from a suitably qualified accountant can be considered where a suitable business plan is provided. The level of projected income used can be up to 30% greater than year one confirmed income.

Income calculation

We’ll base income calculation on the finalised accounts, SA302s, accountant’s reference or tax calculation submitted to HMRC.

For limited company directors, we’ll use their salary and dividends. For sole trader/partnerships we’ll use net profit.

Proof of income required

  • Latest three years’ SA302s, finalised accounts or tax calculations submitted to HMRC.

Accountant representation

Applicants must be represented by an accountant with suitable qualifications:

  • Institute of Chartered Accountants in England and Wales (ICAEW): ACA qualified
  • Association of Chartered Certified Accountants (ACCA): ACCA/FCCA qualified
  • Chartered Institute of Management Accountants (CIMA): ACMA/FCMA qualified
  • Association of Authorised Public Accountants (AAPA): AAPA qualified
  • Chartered Institute of Taxation (CIOT): CTA qualified
  • Institute of Certified Public Accountants (Ireland) CPA Ireland: CPA/FCPA qualified
  • Association of International Accountants (AIA): AIA/FAIA qualified
  • Institute of Financial Accountants (IFA): FFA/AFA qualified.

Guarantors are accepted.

Please ensure the application is noted to state which applicant is the guarantor(s) and we’ll ensure that they don’t appear on the deeds on the mortgage offer.

Number of applicants

The guarantor will count as an applicant on the mortgage. Guarantors mustn’t make the number of applicants on the mortgage exceed four.

Affordability and evidence

The guarantor’s income and commitments will be included in our affordability calculation in addition to the applicant’s income. For affordability, we’ll use household expenditure for both the applicant(s) and guarantor(s).

Guarantors must provide:

  • Evidence of income
  • Existing commitments
  • Bank statements.

Term

The term is based on the age of the oldest applicant, including the guarantor.

If the term takes the guarantor over the age of 70, we’ll only be able to use their pension income for affordability purposes.

UK and EU nationals are accepted.

Foreign (non-EU) nationals must have permanent rights to live and work in the UK.

Applicants should have lived and worked in the UK for the last three years.

For applications on behalf of existing residential borrowers, please see the following sections:

We aim to get electronic proof of identity but if documentation is required we accept the following:

  • Valid UK/non-UK passport
  • Valid UK driving licence, photocard (full or provisional)*
  • HM Forces/police warrant card
  • Shotgun licence or firearms certificate.

Note: *In accordance with the DVLA regulations, you’ll need to check the expiry date of your photocard driving licence. If the photo has expired, we may not accept it as proof of identity and address, therefore other items may be requested.

We aim to get electronic proof of address but if documentation is required we accept the following:

  • Valid UK driving licence, photocard (full or provisional) – if not used as proof of ID*
  • Current bank or mortgage statement dated within last three months (not internet printed)
  • Utility bill or landline telephone bill (not internet printed and landline number must be the same as quoted on the application) – dated within last three months
  • Council tax bill
  • A positive voter’s roll result (please include the reference number or printed copy as evidence).

Note: *In accordance with the DVLA regulations, you’ll need to check the expiry date of your photocard driving licence. If the photo has expired, we may not accept it as proof of identity and address, therefore other items may be requested.

One year self-employed applicants and contractors accepted with no minimum income.

Overtime, bonus and commission accepted at 50%.

All residential loans must pass the affordability test using the Bank’s own model. Income from all applicants will be combined for the purpose of affordability. Please use our residential affordability calculator to check your client’s affordability.

We’ll accept the following forms of income:

  • Gross annual basic income: 100% - including 100% of guaranteed permanent allowances to include large town weighting allowance, car allowance and housing allowance
  • Overtime, bonus, commission: 50%
  • Child maintenance by court order: 100% (child can be up to 13 years old)
  • State pension: accepted as long as it’s not the sole source of income
  • Benefits that are not acceptable include:
    • Housing benefit
    • Jobseeker’s allowance
    • Mobility allowance.

Self-employed applicants

Affordability is based on net profit before tax, based on the finalised accounts for the last three years for sole traders/partnerships.

For limited company directors with a shareholding greater than 25%, income will be assessed in the form of director’s remuneration and dividends.

Overtime

If overtime remains constant month on month, we’ll include 50% over a three month period in our affordability calculation.

If the overtime fluctuates, we’ll include 50% of the average of the last three months in our affordability calculation.

This is subject to overtime being sustained.

Commission

If commission remains constant month on month, we’ll include 50% over a three month period in our affordability calculation.

If the commission fluctuates, we’ll include 50% of the average of the last three months in our affordability calculation.

This is subject to commission being sustained.

How is self-employed income assessed?

Self-employed: sole trader/partnership

Annual income will be assessed from the accounting information supplied.

Scenario Income considered
The profit has been steadily increasing for the last three years. Based on the last year.
The profit hasn’t been steadily increasing for the last three years. The lowest of the following:
  • The average of the last three years’ net profit
  • The latest year’s net profit.
Only one year net profit is available. The projected income for the second year from a suitably qualified accountant and a business plan.

The level of projected income used can be up to 30% greater than the year one figure.

 

Self-employed: limited company

Income will be taken as per employed applicants plus dividends where appropriate.

Scenario Income considered
The director’s salary and/or dividends have been steadily increasing for the last three years. Director’s salary from the last year (+ dividends where appropriate).
The director’s salary and/or dividends haven’t been steadily increasing for the last three years. The lowest of the following:
  • The average of the last three years’ director’s salary (+ dividends where appropriate)
  • The latest year’s director’s salary (+ dividends where appropriate).
Only one year director’s salary and/or dividends is available. The projected income for the second year from a suitably qualified accountant and a business plan (plus dividends where appropriate).

The level of projected income used can be up to 30% greater than the year one figure.

 

Maintenance income

We can only accept maintenance income if this is ordered by either the courts or child support agency. It must be in place for the life of the initial mortgage product i.e. two to five years, depending on the product selected.

This should be evidenced via a minimum of three months’ bank statements, demonstrating payment at the level indicated.

Government benefits

Government benefits are not acceptable. Child benefit or child/working family tax credits can be considered in addition to employed income at the underwriter’s discretion.

Pension income

We can accept 100% of the private and state pension combined, or a private pension alone. We can’t accept a state pension alone.

We can accept one applicant with private and state pensions combined, and a second applicant with a state pension alone.

Rental income

We can accept 100% of net rental income, which must be evidenced by way of finalised accounts, SA302s, submitted tax calculations or an accountant’s reference.

Second income

We can accept 100% of a second income that is sustainable and held for a minimum of 12 months. Hours worked should be sustainable and not excessive.

Payslip deductions

These are considered as anything that can’t be opted out of such as student loans and child support and are factored into our affordability calculation.

Maximum 90% LTV.

Terms of 5–35 years (five-year terms aren’t available on five-year products).

Loans available up to £3,000,000. More available by exception.

The following loan purposes are acceptable:

  • Purchase of applicant’s main residence
  • Remortgage of applicant’s main residence.

The following loan purposes aren’t acceptable:

  • To shore up a business
  • Remortgages to repay gambling debts
  • Purchases where the applicant is married or in a civil partnership and their spouse or partner isn’t included on the application.
  • To repay Tax

We accept the following repayment methods:

  • Capital repayment
  • Interest-only mortgages (not available for shared ownership)
  • Part and part (not available for shared ownership).

Note: The repayment methods available differ for each individual product.

Prime loans and asset-backed interest-only mortgages

Minimum loan: £50,000.

Maximum loan: £3,000,000 - more available by exception.

Note: Asset-backed interest-only available subject to minimum property value of £500,000 and isn’t available above 85% LTV.

Near prime mortgages

Minimum loan: £50,000.

Maximum loan: £1,000,000 - more available by exception.

Note: Loans over £500,000 are subject to a maximum 80% LTV.

Shared ownership

Minimum loan: £50,000.

Maximum advance: £1,000,000 - more available by exception.

The deposit should come from the applicant’s own resources. The applicant must provide the required level of deposit to meet the product requirements.

Family member gifted deposits

For a gifted deposit to be acceptable, the family member must be one of the following:

  • Mother
  • Father
  • Sibling
  • Grandparent.

Required documentation

A copy of our gift declaration form must be provided, to confirm:

  • The gift isn’t a loan
  • The gift is non-refundable
  • The donor won’t have interest in the property.

A certified copy of the donor’s ID is required. In the event the applicant and family member(s) have different surnames, we require evidence of a family name connection such as a marriage certificate.

Should the gift originate from family living abroad, we require evidence of:

  • The funds being available in the family member’s account
  • The funds showing in the applicant’s UK bank account.

Builder’s incentives

Builders’ incentives are acceptable.

Calculation

Builders’ incentives are deducted from the lower of the purchase price and valuation

The loan amount is based on the resulting lower total.

Vendor deposit

Vendor deposits are acceptable.

Calculation

Vendor deposits are deducted from the lower of the purchase price and valuation.

The loan amount is based on the resulting lower total.

Remortgages will be considered where the security property has been owned or the existing mortgage has been in place for less than six months, subject to:

  • The loan amount being based upon the lower of the purchase price or current valuation. Exceptions will be considered where it can be demonstrated, that since the date of purchase, significant improvement works that have enhanced the property value have been carried out subject to:
    • A schedule of works and evidence of expenditure
    • Confirmation that works have been completed to a suitable standard
    • Obtainment of any necessary consents
    • The marketability and manageability of the property.
  • Maximum 75% LTV
  • In all instances, the property must be registered at the Land Registry as owned by the applicant(s), during the application process or where there is not available, request confirmation of the land registry submisison confirming the purchase, date and price via the acting solicitor
  • New build properties excluded
  • All other standard criteria apply.

The balance of the purchase price not being borrowed should come from the applicant’s own resources.

Standard residential further advances

Minimum loan: £15,000.

Maximum loan: £1,000,000 - more available by exception.

These mortgage products are only available on a repayment basis. Interest-only or part repayment/part interest-only may be available by exception only.

Further advances terms must not exceed the term of the existing mortgage

These mortgage products are portable. Even if your client moves home during the initial special deal period of a mortgage, the remaining benefits (up to the outstanding balance of their existing mortgage) of that special deal can be transferred to their new mortgage with us, subject to our lending criteria at the time of any move. In this case, any early repayment charges won’t be charged but the existing rate won’t apply to any additional funds that your client borrows.

Sale of security property

If using sale of security property as a repayment strategy a maximum 50% LTV applies. The applicant must have in excess of £200,000 equity at the time of application and their circumstances must clearly reflect the ability to downsize at the end of the term.

All other repayment strategies

A maximum 85% LTV applies.

Asset-backed interest-only available subject to minimum property value of £500,000.

Acceptable repayment strategies and required evidence

Repayment strategy Evidence requirements and criteria
Endowment Copy of the latest projection statement(s) dated within the last 12 months.
Stocks and Shares ISA Copy of the latest investment statement(s) dated within the last 12 months.
Unit trusts/OEICs Copy of the latest investment statement(s) dated within the last 12 months.
Pension Copy of the latest projection statement(s) dated within the last 12 months.
UK stocks and shares Evidence of current ownership.
Savings Copy of passbook/statement of balance dated within the last 12 months.
Premium bonds Evidence of current ownership.
Sale of second home/buy-to-let property Details of property, evidence of existing secured debt, evidence of current value (estate agent valuation or automated valuation model).
Sale of security property Residential owner occupied maximum is 50% LTV with a minimum equity amount of £200,000.
The borrower circumstances must clearly reflect the ability to downsize at term end.

Shared ownership considered.

Studio flats considered (must have minimum 30m2 gross internal area).

Minimum property value £75,000.

Flats in blocks must be of modern construction.

Flats within high-rise blocks above the 12th floor may be considered on a case-by-case basis as an exception at our discretion. This is subject to the valuer confirming that the position of the flat within the tower block doesn’t detrimentally impact on marketability.

If the property on which we’re lending is on the fourth floor or above, the property must have a lift.

Maximum number of floors accepted as standard:

  • Outside of London: six (plus ground floor)
  • Within London: 12 (plus ground floor).

Ex-local authority flats:

These can be considered where:

  • There is good re-sale value, and
  • The block is more than 80% privately owned, and
  • The security isn’t in a pre-emption period.

Studio flats

Must be a minimum of 30m2.

Must be self-contained including separate services.

The property must be outside of pre-emption period.

Freehold

Houses only, flats not accepted.

Minimum unexpired lease term

50 years at the end of the mortgage term.

Maximum 75% LTV applies for loans on leasehold properties with an unexpired term of less than 85 years at application.

Properties in England and Wales only.

A first legal charge is required.

Shared ownership: Full Mortgage Protection Clause (MPC) is required and must have staircasing ability to 100%.

New build properties

Must have acceptable warranty or CML compliant certificate.

Self-build properties

Must have required certification.

New build properties are considered as those that:

  • Are less than two years old (from the date of practical completion), and
  • Haven’t been lived in.

Build maximum LTV

Houses: maximum 85% LTV

Flats: maximum 75% LTV

Warranties

If the property is less than 10 years old, one of the following warranties must be in place:

  • NHBC
  • Building Life Plan
  • Premier Guarantee Scheme
  • Checkmate Castle 10
  • LABC New Home Warranty
  • Build-Zone Structural Warranty
  • Zurich Municipal
  • Advantage
  • Aedis Warranties
  • Global Home Warranties
  • Protek
  • ICW

The solicitor acting for Kent Reliance for Intermediaries should ensure an acceptable warranty is in place.

These are considered on a case-by-case basis:

  • Subject to valuer’s comments
  • Maximum 75% LTV applies.

In general, properties above or attached to the following establishments won’t be accepted:

  • Takeaways, restaurants and cafés
  • Convenience stores, bars and nightclubs
  • MOT garages or any property where industrial processes are carried out
  • Dry cleaners (where dry cleaning takes place on the premises)
  • Nail bars
  • Tattoo parlours
  • Hairdressers.

This isn’t an exhaustive list, so please speak to your senior business development manager for more information.

These are considered subject to construction type and valuer's comments.

Any property formed of prefabricated reinforced concrete (PRC) construction designated defective under the Housing Act 1985 must have been prepared under a repair scheme licensed by PRC Homes Ltd. Any adjoining properties must also have the necessary repair certificates.

We don’t provide purchase loans for self-build properties. However, if the self-build property is complete and the applicant has owned the land for at least six months, we can consider a remortgage.

To consider a remortgage, the property must have:

  • The appropriate local authority consents
  • A 10-year new homes warranty or UK Finance (CML) complaint Professional Consultant’s Certificate
  • Accompanying professional indemnity insurance.

If off-site construction has been used within the build, Build Off-site Property Assurance Scheme (BOPAS) is required in addition to the warranty.

Retrospective Professional Consultant’s Certificates aren’t UK finance compliant, and therefore unacceptable.

Minimum loan: £50,000.

Maximum loan: £1,000,000.

Minimum property value: £125,000.

Minimum share: 25%.

Maximum share: 75%.

We’re unable to provide shared ownership mortgages for any share between 75%-100%, and if an applicant is looking to purchase 100% of the shares, we’d treat this as a normal residential application.

The property must be purchased through a registered housing association that permits up to 100% staircasing and is registered as such.

A full mortgagee protection clause (MPC) must be in place.

Applicants must use one of our approved panel solicitors.

We can lend up to 100% of the applicant’s share with no need for a deposit.

Customer must be able to staircase to 100%. For all cases of 106 clauses, please speak to your senior business development manager.

Further advances for shared ownership are only available for home improvements and staircasing.

Considered for category 1 only:

Japanese knotweed mustn’t have been identified on the property or within seven metres of the boundary.

Application fee:

£130, payable at time of application

Product fees:

Please see individual product pages

Product switching fee:

£30, charged when a product is switched post offer.

This fee can be deducted from the completion monies.

The valuation fee is payable at the time of application and is non-refundable once valuation has been undertaken.

Up to £250,000

£250,001 to £500,000

£500,001 to £1,000,000

£1,000,001 to £3,500,000

£3,500,001 to £5,000,000

All mortgage payments must be made by direct debit and the applicant must choose between 10th and 28th of the month for the payment to be collected.

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