The Mortgage Works Buy to let lending criteria

These notes were last checked on 11th March 2022

Solicitors

Solicitors/conveyancers with less than two partners will not be eligible to process applications unless they are on our approved panel. Separate Legal Representation Where an applicant nominates a conveyancer to act for the applicant only, TMW will instruct a separate conveyancer to act on behalf of TMW at the applicant’s expense. The applicant cannot instruct a separate firm to act for TMW. Please contact TMW for further information.

Employment

Self Employed Minimum Trading Period

For self employed applicants, a minimum trading period of 2 years
is required.

Accountants Letter / Certificate

We require an Accountants Certificate, or HMRC Tax Calculations and corresponding Tax Year Overviews. They must cover the latest 2 full years, and the end of the latest financial period must not be more than 18 months old. All Accountant Certificates must be prepared and signed by the accountant, with the accountant confirming they have the appropriate professional indemnity cover in place to provide accountancy services.

Projected Accounts accepted

No

Zero Hour Contracts

Nationwide Building Society can potentially accept zero hours contracts as an income type. Casual employment including Zero Hours Contracts, Piece Work, NHS Bank Nurses, Retained Firefighters, Armed Forces Reserve and Supply Teachers. The applicant must have been employed by the same company for a minimum of 12 months. Applicants employed as NHS Bank Nurses or Supply Teachers may have worked for different NHS Trusts or schools. This is acceptable if they’ve been doing this for at least 12 months. The income can only be used where it’s a secondary income on the application; it doesn’t have to be a second job.
Income must be evidenced by the latest P60 and payslip. We will use the lower of the annualised year to date figures from the latest payslip, or the latest P60. Bonus, overtime or commission can’t be used for these contract types.

Applicants

Nationwide Building Society can potentially accept weekly or monthly overtime as an income type. Weekly – latest 8 payslips – add the value of the overtime, divide by 8 and key as Weekly.

Fortnightly – latest 6 fortnightly payslips – add the value of the overtime, divide by 12 and key as Weekly. 4 Weekly – latest 3 payslips – add the value of the overtime, divide by 3 and key as 4 Weekly Monthly – latest 3 payslips – add the value of the overtime, divide by 3 and key as Monthly

Maternity Leave Policy

Nationwide Building Society can potentially accept parental/maternity leave pay (back to work salary) as an income type. For applicants who are on or due to go on parental leave, the existing and future child care costs should be included as an outgoing, and the future number of dependents declared.

Child Tax Credit

Acceptable – from the latest 3 months bank statements, key the average of the last 3 months payments into the ‘Universal Credit’ field.

FTB Considered when accompanied by an existing property owner occupier

Remortgage

Remortgages only acceptable after the property has owned for a minimum of 6 months Available to maximum LTV according to product Raising capital for non-business purposes including for deposit/purchase of a Buy to Let property, will be considered Raising capital for non-structural home improvements will be considered Applicants remortgaging their existing owner occupied property as a BTL must choose from the Let to Buy range.

Maximum no of Applicants

Maximum of 2 per application

Minimum age 1st Applicant

21 years

Minimum age 2nd Applicant

21 years

Minimum term

5 years

Maximum term

35 years

UK Tax Payers

Yes

Non Residents No

Foreign Citizens Accepted No

Expatriates Accepted No

Diplomatic Immunity No

Guarantors Allowed No

Parental Assistance No

Armed Forces Personnel Yes

Additional Conditions

First Time Buyer (FTB): An applicant who has not owned any type of property (Residential or Buy to Let) for at least the last six
months First Time Landlord (FTL): An applicant who has owned their own home for at least the last six months, but has not owned and let a Buy to Let property for the last six months Experienced Landlord: An applicant who has owned and let a Buy to Let property for at least the last six months (they may or may not own and occupy their own home)

Payday Loans considered

Buy to let Mortgage 

Overpayments 10%

Debt consolidation Yes

Home Improvements Yes

BTL Minimum property value £50,000 (£100,000 for HMOs)

BTL Maximum LTV 80%

BTL Rental Income

The gross rental income, confirmed by the valuer, must cover the monthly mortgage interest payment by at least:
• 125% ICR: Borrowers must be lower rate tax payers (gross income of £45k or less in England/Wales or £43k or less in Scotland) upon completion of the mortgage with no more than 3 rental properties (with or without a mortgage).
• All rental properties are included in this total, including any in-flight purchase or LTB applications with TMW. Proof of income will be required.
• For purchase and Let to Buy applications, 75% of the proposed gross rental income will be added to current gross income to provision for the borrower’s tax band post completion.
• 145% ICR: Applies to borrowers who do not meet the criteria above.
• 170% ICR: Applications for Houses in Multiple Occupation (HMO) regardless of tax status

BTL UK Tax Payers Yes

BTL Foreign Citizens Yes

BTL Expatriates No

BTL Diplomatic Immunity No
BTL Guarantors No
BTL Parental Assistance No

BTL Minimum Portfolio Value None
BTL Maximum Portfolio Value £5,000,000

BTL Max no. of properties in portfolio

75% Up to 6 mortgaged BTL properties Nationwide Group Lending up to £750000
65% 7 or more mortgaged BTL properties
Nationwide Group Lending over £750000 ICR 145% 4.5% Up to 1O mortgaged BTL properties
Nationwide Group Lending up to £1000000, 5.5% for 11 or more mortgaged BTL properties
Nationwide Group Lending over £1000000

BTL Max no. of properties with lender

Unlimited

BTL First Time Buyer

Considered when accompanied by an existing property owner occupier

BTL Retired Applicants Yes

BTL First Time Landlords

Classified as an applicant, who has owned their own home for at least the last 6 months, but has not owned and let a Buy to Let property for the 6 months. Evidence of deposit and proof of personal income is required on all applications. See ‘Personal income requirements’ and ‘Source of deposit’ on web site Loan purpose: to purchase a new Buy to Let property Maximum age 70 at application Maximum 75% LTV Maximum loan size £500,000 (unless otherwise stated) First Time Landlords remortgaging a second residential property as a Buy to Let (for example, inherited property) are not accepted

BTL New Build accepted
BTL New Build House Yes
BTL New Build Flat Yes – up to 65% LTV.

BTL AST over 12 mths

Accepted in the form of an Assured Shorthold Tenancy Agreement (Short Assured Tenancy in Scotland) for a period of up to thirty six months

BTL HMO accepted

Houses in Multiple Occupation require a Specialist Security valuation. TMW consider the following types of property as a HMO: A property occupied by five or more people or with five or more lettable rooms in an area commensurate with multi letting A property with more than one tenancy agreement in place
Properties subject to selective licensing only classified as HMO where at least one of the above conditions are met. Please see the HMO section of the product guide for available options. Maximum age 70 at application Maximum 65% LTV Maximum loan size
£750,000 (unless otherwise stated) Experienced landlords only Let to Buy applications not accepted Rental cover will be assessed on a multi-tenanted basis All let properties will be subject to an Assured Shorthold Tenancy agreement of a minimum of 6 months, maximum of 36 twelve months. Single and multiple tenancy agreements accepted A property must have no more than four habitable storeys and no more than one kitchen Properties consisting of more than one self-contained unit under a single title are not acceptable

A property containing no more than seven lettable rooms A Specialist Security valuation will be required

Portfolio Landlords

TMW’s portfolio landlord definition: A “Portfolio Landlord” is a borrower with four or more distinct mortgaged Buy to Let UK rental
properties (or seven or more for remortgage applications without capital raising) at completion. A “Large Portfolio Landlord” is a borrower with 11 or more distinct mortgaged Buy to Let UK rental properties at completion.

Additional information:
• This includes holiday lets, properties owned through a limited company, ‘consent to let’ properties and all BTL mortgages owned solely or jointly by the applicant(s)
• We’ll only accept applications from portfolio landlords that have at least two years’ letting experience (at least one applicant must meet this requirement on joint applications). We won’t consider foreign properties when assessing portfolio landlords. Affordability assessment We’ll continue to check all new TMW mortgage applications to ensure your client can cover their monthly mortgage interest payment. We’ll also assess the existing portfolio to ensure the overall aggregate LTV and ICR is sustainable. The assessment will be based on the entire portfolio, including the new property and any rental properties without a mortgage. The following rental calculations and maximum LTVs will apply across your client’s portfolio: Keying applications
• We’ll now ask for the client’s personal income on all cases.
• At DIP stage, we’ll look at gross annual buy to let income as well as the total number of properties, to identify if the client is/will be a portfolio landlord on completion of the application.
• If the client has more than 4 properties, we’ll ask for details of the total value and outstanding mortgage balances secured against the portfolio.
Packaging applications All portfolio landlords will need to provide:
• Three months’ current account statements showing rental payments.
• A property schedule, either by: Keying the details into our new Portfolio Portal. Or completing our property
schedule form and uploading into the portal. Once submitted, the details will be automatically validated and the results will be sent to our dedicated team of underwriters for assessment. Depending on case complexity and portfolio size, we may request further supporting information such as a business plan. Once the application has been submitted, we may occasionally ask for further information. So cases can be processed efficiently, we ask brokers submit all requested proofs and additional supporting information but only when this is asked for.

Rental Top Up The Mortgage Works will not consider earned income in affordability assessment.

BTL Notes

• Landlord experience: at least 2 years as a standard BTL landlord or 1 year as a HMO landlord 

Buy-to-Let criteria: 

Long Term Lets

• Long Term Lets accepted up to three years on a single AST
• Non-AST applications (Local Authority I Housing Association Tenancy and Corporate Tenancies) also accepted up to three years.

Let to Buy

Classified as a first time or experienced landlord applicant who is remortgaging their existing residential property as a Buy to Let. Please see the Let to Buy section of the product guide for available options. Maximum age 70 at application Maximum 75% LTV Maximum loan size £500,000 (unless otherwise stated) The applicant(s) must have owned their residential property for at least six months (with or without a mortgage) at the time of application Applications will only be accepted where there is a simultaneous onward purchase of a new residential property (which may be with another lender), to be confirmed by the acting solicitor prior to completion The applicant must vacate the security address upon completion (new correspondence address should be provided) If the new residential property is purchased by way of a mortgage –

A copy of the onward residential mortgage offer must be provided prior to completion Applications where the new residential property will be purchased with cash are considered, provided: The current main residence is unencumbered The onward purchase address will be provided at application The same solicitor will be acting on behalf of the applicant for both purchase and remortgage transactions

Proof of Deposit

TMW reserve the right to request proof of deposit on all applications. If proof of deposit is needed, there is a minimum of 1 months bank statement within 3 months of DIP date. TMW may query large transactions as an audit trail is sometimes required.
Proof of deposit can be provided in the form of bank statements, bonds, stocks & shares portfolio. To see a full list of acceptable proof of deposit visit www.themortgageworks. co.uk.

Gifted Deposit

Maximum of two gifts per application. Two gifts may involve more than two donors where the gift comes from a joint source, e.g. One gift from mother and father and one gift from grandfather and grandmother. This is acceptable. Gifted deposits will not be accepted where the donor resides outside of the UK and/or the funds originate from outside the UK A Confirmation of Gifted Deposit declaration is required for all applications where any of the
deposit has been gifted – Refer to lender

Further Advances

The mortgage must have been satisfactorily conducted and running for a period of 6 months before a Further Advance is considered. The maximum numbers of Further Advances that would normally be considered on any one account are 2 in any 12 month period or 2 in any 36 month period. Proof of income may be requested to support Further Advance applications.

Property

Agricultural Restrictions Not accepted

Back to Back Acceptable

Brick on Wood Acceptable

Conventional Brick I Tile Acceptable

Flat Above Shop

Properties over commercial premises may be considered subject to valuer’s comments, refer to lender.

New Build Flat

New build flats and houses are defined as properties built or sold within the last 12 months. New build Flats accepted 65% LTV

Builder must be on TMWs Acceptable Builders List (only if a limited company)

New Build House New build flats and houses are defined as properties built or sold within the last 12 months. Builder must be on TMWs Acceptable Builders List (only if a limited company)

Ex Local Authority Flat

Ex-Local Authority Flats are accepted if in a building not exceeding 5 storeys with a maximum LTV of 75% and the property must be
recommended as suitable security by the valuer.

Ex Local Authority House

Accepted subject to valuers comments.

Freehold Flat

Not accepted

Flat Storeys No maximum criteria where serviced by a lift, subject to valuer comments.

Flying Freehold TMW will not accept property’s where there is 100% flying freehold.
The valuer must confirm that a flying freehold is present and they
must consider whether the configuration and amount of the flying freehold will have a major effect on salability/marketability and whether to decline the property.

Ground Floor with/without lift No maximum criteria where serviced by a lift, subject to valuer
comments.

Garden Floor with/without lift No maximum criteria where serviced by a lift, subject to valuer
comments.

Minimum Lease on Application

70 Years at application

Minimum Lease on Redemption

30 Years at redemption

Minimum Property Value Let to Buy

£50,000 £100,000 (HMO products)

Accepted – Applicants remortgaging their existing owner occupied property as a BTL must choose from the Let to Buy range.

Mobile Home Not accepted

Maisonette Accepted

Multiple Let Not accepted

More than one kitchen Considered if part of multiple self contained units under a single
title.

More than 6 bedrooms Considered on a HMO basis, properties with 1O or more letable
rooms are not accepted.

NHBC required If new, or built within 10 years of the date of the Mortgage
Application, the security must have either a NHB, Zurich Municipal,
HAPM, LABC, Premier Guarantee, Building Life Plan (excluding self builds under construction), Build-Zone/ Self Build- Zone, Castle 10 (provided by Checkmate), Build Assure, Global Home Warranties, The Q Policy for Residential Properties, The Q Policy for Bespoke Properties (detached only), Proteck, Advantage­ Insurer: Elite Insurance Company (there must be no more than 10 unitsin any continuous structure), CRL new build 10 year structural defects insurance policy for residential property, if constructed between August 2011 and May 2015there must be no more than
1O units in any structure or have a qualified Architect’s Surveyor’s or Structural Engineer’s Supervision Certificate (Professional Consultants Certificate).

No Bathroom Not accepted

No Indoor WC Not accepted

Occupied Not accepted

Part Occupied Not accepted

Right to Buy Not accepted

Part Commercial Not accepted

Second Home No
Holiday Home No
Home for Dependant No
Self Build No
Shared Ownership No

No Existing Mortgage

Accepted – subject to standard remortgage criteria

Solar Panels
The Mortgage Works can potentially accept applications on properties where solar panels exist on the security property.

Studio Flat
Studio flats are acceptable to TMW subject to the minimum internal floor area is no less than 30 square meters and they must have a separate bathroom

Thatched Roof yes

Non Standard Construction Individually assesed
Steel Frame Individually assesed

Prefabricated Concrete

Accepted if the security and adjoining properties (or entire block in the case of flats) are repaired under an acceptable Licensed Repair Scheme.

Timber Frame Brick Gladded accepted, Other cladding – Individually assessed Yes

England Yes
Scotland Mainland only
Wales Yes
Northern Ireland No
Southern Ireland No

Fees

Standard Valuation fees
TT I Chaps fee £20
Homebuyers Valuation fees

Miscellaneous Fees

Specialist list Security valuation Fees available on web site (required for HMO applications)

Accompanying text

For properties valued over £2 million please refer to lender for the valuation fee. Please refer to Lender for any additional fees which may be charged on final redemption such as Deeds Release/Sealing/Admin fees Re-inspection £100 Structural Survey
& house Buyers Report Fees on request. Valuation by Panel Valuer refer to lender for further details.

Transcribed valuations are not acceptable. The transcribe of Home Reports will be accepted for purchase applications in Scotland where no fee is payable and the following conditions will apply: The Home Report must have taken place prior to submitting the application The Home Report must have taken place in the last 90 days.For Buy to Let valuations, the report needs to include a rental assessment. The valuer providing the transcription must be the individual who prepared the original Home Report or inspected the New property The Home Report must have a pre-existing “generic mortgage panel” report within it When the valuation figure is the result of a ‘refresh’ (update) of the original Home Report, it must be based on a further internal inspection that has taken place within the last 90 daysOnly one refresh will be permitted The inspection of the original Home Report must have taken place no more than 9 months ago A restricted panel of valuer’s are acceptable for purchases of property in mainland Scotland; please contact us for details.

Own insurance charge

All properties require an appropriate level of building insurance cover (amount specified by the valuer), to be in place at completion

Miscellaneous

Legal fees package Notes

Only offered on selected remortgage products

Exposure limits The Mortgage Works will consider its overall exposure by applicant, geographical area and development when assessing applications. The maximum number of securities that can be considered per development is: 1 – 3 units: 1 unit 4 – 50
units: 25%, rounded down to the nearest unit 51 – >80 units: 15%, rounded down to the nearest unit The maximum number of securities that will be considered in the same postcode area, to the first alphanumeric section (e.g. RG4, BH24, etc.) per applicant across NBS Group is 10. Property development Applicants who own 25% or more of a company whose principle activity is property development defined as those who buy, then improve and quickly sell for a profit or build new properties to sell are unacceptable to TMW.