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Last updated 10 June 2021.
The Stamp Duty incentive was extended until 30 June 2021. This meant that clients could complete their purchase of a property up to the value of £500,000 without paying Stamp Duty.
To smooth the transition back to the normal threshold, the nil rate band now applies to properties up to the value of £250,000 until 30 September 2021 before returning to £125,000 on 1 October 2021.
Your client needs to ensure there is sufficient time for their conveyancer to complete all the legal work required to enable their mortgage application to complete before the threshold change.
It is in their own interest to instruct their conveyancer at the earliest opportunity so that they are in the best position to meet this deadline. Please note that any costs incurred for starting the legal process early will need to be met by your client if the case does not progress to completion.
It is important to note that if their application does not complete by the date outlined above, they will be liable to pay any Stamp Duty related to their purchase.
21 – if joint application, at least one applicant must be 21.
Normally the loan must be repaid before the oldest applicant’s state retirement age detailed below or applicant’s stated intended retirement age, whichever is lower.
Date of Birth State Retirement Age From 6 April 1950- 5 June 1953 63 From 6 June 1953- 5 September 1953 64 From 6 September 1953- 5 October 1954 65 From 6 October 1954- 5 March 1961 66 From 6 March 1961-5 April 1978 67 From 6 April 1978 onwards 68
Maximum Number of Applicants
CCJs & Defaults
CCJ’s/Defaults within the last 3 years are not acceptable.
CCJ’s/Defaults => 3 years prior to application are acceptable up to a maximum £2,500, subject to an explanation and being cleared/satisfied 12 months prior to application.
No other adverse entries must show on credit file.
CCJ’s/Defaults are not acceptable over 80% LTV.
Up to 80% LTV
Mortgage, Loan and HP arrears & missed payments => 3 years prior to application, status 1s and 2s are accepted – status 3 or above not accepted.
Mortgage, Loan, HP arrears and missed payments within the last 3 years are not acceptable.
Credit Card, Mail Order, Utility commitments => 3 years prior to application – Up to and including status 2s are acceptable.
Credit Card, Mail Order, Utility <3 years prior to application – Status 2 – ok to proceed subject to the commitment being up to date for a minimum of 12 months prior to application. =< Status 3 are ok subject to commitments totalling less than £500 and being up to date for a minimum of 12 months prior to application.
Above 80% LTV
Mortgage, Loan and HP arrears and missed payments are not acceptable.
Credit card, Mail Order, Utility commitments- a maximum of 3 status 2’s are acceptable if less than £100. No other adverse entries within the last 3 years must show on the credit file.
For non-UK nationals we require the applicant(s) to have resided in the UK for a minimum of 2 years. We will also require proof of indefinite leave to remain/residence certificate, or settled or pre-settled status in the UK.
Minimum of 6 months in current job and not in probation.
LTV >80% – The applicant must have been contracting for a minimum of 3 years.
LTV< 80% – The applicant must have been contracting for a minimum of 1 year with a further 2 years experience in the same field.
Zero hour contracts accepted – please refer.
LTV >80% – The applicant must have been in their current business for a minimum of 3 years.
LTV< 80% – The applicant must have been in their current business for a minimum of 1 year with a further 2 years experience in the same field.
Directors with a shareholding of less than 25% we classify as employed and therefore we accept salary in dividend as income. If above 25%, we classify as self-employed.
Applicants’ own deposit or gift from an immediate family member (spouse, parent, grandparent, sibling, child or grandchild) is acceptable. Evidence of the source of deposit is required.
We capture gross annual income and net monthly income details. In addition we may also consider;
60% of regular overtime, bonus or commission (avg. of these over the last 2 years P60).
Second employment income considered on a case by case basis.
For applicants on fixed-term contracts of less than 6 months, the minimum period of employment with the same employer is 6 months. For those on contracts of 6-12 months or more, the contract must have been renewed at least once. If the contract is for more than 12 months, the applicant must be more than 6 months into the contract.
We require 2 years accounts covering a 3 year period, together with 3 years tax computations/SA302s to establish income. We assess the income by averaging the last 3 years income or we will take the most recent year, whichever is lowest of the two.
Certified Accounts need to be signed and dated within 18 months. In addition, we would require sight of recent Business Bank Statements.
For sole traders we will accept 3 years tax overviews and SA302s supported with 3 months Business Bank Statements subject to underwriter approval. We will consider cases with 1 years trading accounts and 2 years P60 if previously employed in the same field, max LTV 80%.
Applicants operating on an hourly or daily rate of pay are acceptable max 80% LTV. Offshore Umbrella Companies are not acceptable. Minimum 6 months completed contract with evidence of past/present/future contracts. CIS workers are acceptable Max 80% LTV. We require a minimum of 12 months evidence of minimum employment and latest 3 years tax overviews/SA302s or previous years P60s in same line of work.
100% private and/or state pension.
The Society may also take into account a percentage of any payments received in respect of investment, dividend or rental income if evidenced by 3 years SA302’s and accounts or SA100’s.
100% of maintenance can be used if court ordered or payments can be evidenced on the most recent 6 month bank statements.
100% child benefit payment, 50% working and child tax credits (for children up to age 14). For us to accept this, the applicant must be in receipt of the income for the full term of the mortgage.
100% of benefits which are subject to a lifetime award such as PIP and ESA.
Maximum loan size dependent on LTV, please see below.
<=80% £750,000 80.1-85% LTV £425,000 85.1-90% LTV £375,000 90.1-95% LTV £325,000
Minimum 5 years (product dependent).
Maximum 35 years.
We will consider remortgage applications where the applicant has been the registered owner for the past 6 months.
Repayment and interest only applications accepted dependent on the selected product.
Interest Only Repayment Vehicle
Sale of Mortgaged Security/Investments/Sale of other property/Endowment.
Let to Buy
A new residential mortgage can be considered where the applicant wishes to retain their current property on a BTL basis.
We need to be satisfied that the existing mortgage will be converted to a permanent letting arrangement and we require:
Rental coverage of 125% of the mortgage commitment for basic rate tax payers, or 145% of the mortgage commitment for higher rate tax payers, based on 5.5% or chosen product rate + 2% (whichever is the higher
of the two).
Anticipated rental income must be confirmed and may be required to be evidenced by a letting agent.
Right to Buy
Properties that do not have any pre-emption remaining will be considered.
Minimum Property Value
England and Wales.
The property must be the main residence of the applicant(s).
Properties must be of traditional construction.
Timber framed properties may be considered if brick clad.
New build houses subject to NHBC/Local Authority Building Control Scheme/Premier/Checkmate (Castle 10)/Buildzone/Zurich/ICW (International Construction Warranties)/AHCI Ltd or Professional Consultants Certificates – maximum 80% LTV.
Purpose built and converted flats and maisonettes are acceptable (new builds not acceptable) up to 60% LTV and must be leasehold.
Flats/apartments more than 4 storeys – if above 4 storeys, they must be serviced by at least 1 lift. if above 4 storeys, they must be serviced by at least 1 lift. Flats above 6 storeys are not acceptable.
HMOs, self-builds, properties held in Trust, present or former hotels/guest houses/B&B’s, commercial properties (even if applicants intend to convert back to residential).
Studio flats and ex-local authority flats.
New build flats.
Flats above commercial property.
Any construction covered by Housing Defect Legislation such as high alumina cement, prefabricate reinforced concrete, large panel system, BISF.
Any property where an EWS1 form for wall cladding is required.
Home improvements acceptable up to 85%. Debt consolidation acceptable up to 80% LTV. Maximum £30,000.