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Residential lending criteria

You can now access calculators, help guides and support in the Intermediary Hub

Use the links below for details of our residential lending criteria and help with submitting the right documentation.

Packaging checklist 210 KB

Lending criteria at a glance 1.14 MB

Click here to search our Buy to Let lending criteria

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A

Requests for additional borrowing by existing mortgage customers must always be treated as a new lending proposition with the purpose of the additional borrowing fully detailed. The total aggregate borrowing required is applied against current policy rules with the exception of age/term when it is the additional borrowing amount only that should meet  current policy rule requirements

A maximum of 80%* LTV may be considered (subject to product availability).

*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 a maximum term of 35 years (25 years for Interest Only, or Family Springboard during the Deposit Term) from initial drawdown of the original facility
  • Interest only – it is the total new aggregate amount of interest-only borrowing, including any existing, that must meet current interest only standards requirements, including repayment plan, plausibility assessment and minimum income
  • Current interest only standards requirements with regards to repayment plan and LTV must be met where there is any change in the repayment plan to that which the interest only lending was originally assessed against – this applies whether the additional lend is on an interest-only or repayment basis
  • For any applications involving the consolidation of an existing MCA Reserve debt, a condition of offer must be accepted by the customer that their MCA Reserve limit shall be reduced to zero/capped and any rebalancing feature 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.

 

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 judgments totaling 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.
 

Bankruptcy/Debt Relief Orders/IVAs

Lending to a customer with a history of bankruptcy OR who has been the subject of a Debt Relief Order (DRO) or an Individual Voluntary Arrangement (IVA) can be considered provided any bankruptcy, DRO or IVA was registered more than 6 years ago from the date of submission of any mortgage application and no longer shows on the credit reference bureau information.

It is not acceptable to lend where we are aware that any applicant is currently bankrupt or subject to a DRO and/or IVA.

Payment arrears/missed payments
Any adverse credit identified, as detailed below, must be declined 

  • Arrears of 3 or more months on any one account in the last 6 months
  • Cumulative amount of arrears at any point in the last 2 years of 3 or more monthly payments on any one account, ie 3 or more instances of a late payment

Applications can be considered where the adverse appears to be inconsistent or out of character when compared to other Credit Account Information Sharing (CAIS) records or where documentary evidence of a settled dispute has been provided by the customer

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 the Intermediary Business Centre on 0345 073 3330 * to discuss whether we will be able to assist.

Lines are open Monday to Friday 9am-5pm.

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 (please see current product rate sheets for details on the affordability rate). 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 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 (please see current product rate sheets for details on the affordability rate). 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, should 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.  For properties that are let, any shortfall between monthly rental income received and actual monthly mortgage payment should be included as a commitment.


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, ie, second residential homes, but not any property confirmed as being on a Buy to Let or Permission to Let basis.


The running costs of any unencumbered second property need to be included in the affordability assessment – please manually enter figures on the Commitments screen.

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 should be declined.

Minimum age: 18

 

Maximum age at end of mortgage term:

Usually the maximum age at the end of the mortgage term should be 70 or your retirement age – whichever is sooner. Where the end of term date of the mortgage would be later than this for any applicant, applications may still be considered on an individual basis. You will need to evidence your ability to repay your mortgage where it extends into retirement.
Please note, the mortgage term cannot extend into retirement for interest-only mortgages. To assist our underwriters please provide both:

  • Details in full of how your client will repay the mortgage in retirement eg, from a company/private pension, sale of another property or from investments or inheritance
  • Provide Documentary evidence to demonstrate serviceability into retirement, together with confirmation that you have discussed affordability into retirement and that your client is comfortable they will be able to meet the mortgage repayments until the end of the mortgage term

Note: Applications can be considered where one or more applicants will be retired (past normal retirement age) or aged over 70 at the repayment date of the mortgage, provided affordability requirements are met by younger applicant/s who meet standard lending policy with regards to age restrictions.

Mortgage term: 5-35 years (25 years for interest only – including part and part).

Certain products may also have different requirements around their maximum mortgage term eg, Family Springboard, Help to Buy: mortgage guarantee.

For interest only mortgages, the term cannot extend into retirement.

For repayment mortgages, if the applicant requires a term into retirement the case will be referred out to an underwriter for a manual assessment. The underwriter will assess on a case-by-case basis, taking account of income into retirement to assess whether the mortgage will remain sustainable over the retirement period. See above for more details.

Allowable incomes % Allowable Acceptable evidence
Basic income 100% Latest month's payslip and latest Bank Statement

For high-value loans (aggregate >£600k) – latest 3 months' bank statements, 3 months' payslips and last 2 years' P60s/HMRC Annual Tax Year Overview
Monthly bonus 2 50%




100%
Latest 3 months' payslips and latest Bank Statement
Please note, where amounts vary, we will use the average value as primary income 1

At least 3 months' payslips, last year’s P60/HMRC Annual Tax Year Overview and latest bank statement

Please note, where amounts vary, we will use the average value as primary income 1
Monthly overtime or commission 2 50%




100%
Latest 3 months’ payslips and latest bank statement
Please note, where amounts vary, we will use the average value as primary income

Latest 3 months’ payslips, past years’ P60/HMRC Annual Tax Year Overview and latest bank statement

Please note, where amounts vary, we will use the average value as primary income
Annual bonus (residential mortgages) 2 100% for income multiples (50% for affordability) Past 2 years’ P60/HMRC Annual Tax Year Overview and latest bank statement

Additional documentation may be requested during the underwriting process

Please note that the lower of the two year average or the most recent bonus must be included in the application. 100% of the bonus income will be utilised for the income multiples purposes, however only a maximum of 50% will be considered for mortgage affordability


 

Sole Traders Partners/Directors / Limited Companies/Limited Liability Partnerships:
Applicants must provide a combination of the following documentation as a minimum requirement:

 

Year 1 (most recent) Year 2
Tax Calculation* Tax Calculation*
AND AND

Corresponding financial accounts produced and signed by a qualified accountant OR HMRC Tax Year Overview

HMRC Tax Year Overview
Where retained profit or dividends are being used
Year 1 (most recent) Year 2
Tax Calculation* Tax Calculation*
AND AND
Corresponding financial accounts produced and signed by a qualified accountant HMRC Tax Year Overview


*A tax calculation is either

An online print out from the HMRC website showing the breakdown of the customer’s income – customers should be recommended to use this approach

or

The calculation or computation submitted by the customer’s accountant to HMRC, this should be on the accountant’s headed paper or with a covering letter

or

SA302 provided by HMRC – where an online version isn’t available

Tax Year Overviews should only be accepted where they demonstrate full payment of any tax liability. Where year 2 documentation doesn’t demonstrate this, underwriters have the discretion to request financial accounts. However, any outstanding tax liability must be accounted for when assessing affordability.

At the discretion of Mortgage Services, if the most recent (year 1) financial accounts or Tax Year Overview aren’t available when verifying income for limited liability partnerships then a letter from a finance/senior partner confirming income can be accepted to support the tax calculation documentation. This can be verified by bank statements.

Financial accounts for both years 1 and 2 are required where any element of retained profit and/or dividend income is being used.

It’s not acceptable to rely on tax calculations alone as verification of UK taxable income.

All supporting documentation provided must relate to a period ending no earlier than 18 months prior to the date of mortgage submission. 

 

For high value loans (aggregate >£600k) – latest 3 months bank statements.

 

Retained profit (for directors of limited companies) 100% Retained profit may be accepted but will be referred for manual assessment by an underwriter in all cases

Please see Self-employed section for acceptable evidence
Taxable allowances
(eg mortgage subsidy, car allowance, shift allowance, large town allowance)
 100% Last 3 months’ payslips
Assessment required of sustainability and continued affordability over the term. Minimum 3-month track record required. Allowance must be taxable to be considered
Private or company pension 100% Pension statement, latest bank statement
Unearned income from trust funds etc, which are free from encumbrances and confirmed by an accountant and tax assessments 100%
Subject to sustainability over the term
Evidence showing a regular income from this source: 3 months’ bank statements and evidence of the source, eg, portfolio of stocks and shares
Maintenance payments 100%
Subject to sustainability over the term
Court order, CSA/Child Maintenance Service Arrangement or an established 12-month track record of payments evidenced by bank statements. Care assessment of sustainability and continued affordability
Foster income 100%
Subject to sustainability over the term
Requests to accept foster income as allowable income can be considered where the following is obtained:
  • Local authority confirmation of current payment structure incorporating details of track history of previous income. A 2-year track record of fostering is required but this may vary depending on individual scenarios and the level of reliance on such income
  • 3 months' bank statements or account history when a Barclays connection
  • Self employed accounts or tax calculation, if applicable
Affordability can be assessed based on actual net receipt of monthly income evidenced in the bank account matched to the Local Authority confirmation

The number of children under foster care should be included as dependants for affordability purposes
Working tax credits 100%
Subject to sustainability over the term
HMRC tax credit award letter (all pages) or, if award letter not available, 3 months’ bank statements clearly identifying the source of the income as being an acceptable benefit.

Care: assessment required of sustainability and continued affordability over the term
Child tax credits 100%
Subject to sustainability over the term
HMRC tax credit award letter (all pages) or, if award letter not available, 3 months’ bank statements clearly identifying the source of the income as being an acceptable benefit.

Care: assessment required of sustainability and continued affordability over the term
Child benefit 100%
Subject to sustainability over the term
DWP child benefit letter or, if letter not available, 3 months’ bank statements clearly identifying CHB.

Care: assessment required of sustainability and continued affordability over the term
Universal Credit 100%
Subject to sustainability over the term
Jobcentre Plus letter confirming eligibility for Universal Credit and three month’s bank statements clearly identifying receipt of Universal Credit payments

Note: Income evidenced as being received in the form of Universal Credit payments for an applicant can only be considered where there is clear evidence of receipt of another form of allowable gross income for that applicant
Discretionary mortgage subsidies and housing allowance 100%
Subject to sustainability over the term
Restricted term subsidies may be considered as a secondary income subject to a minimum term of 5 years: Contract of employment

Care: assessment required of sustainability and continued affordability over the term
Pensions and annuities (currently receiving) 100% Pension payslip showing the applicant’s address and latest bank statement or

Latest 3 months’ bank statements together with either:

a) Pension statement
b) Annuity/pension letter

Pension statements and annuity letters may not be handwritten or amended and must:
  • Show applicant’s name and address, which must match that stated on the application form
  • Show pension/annuity company’s name, address, telephone number and company’s registration
  • number (if limited) and be on headed paper or show company stamp
  • Show pay dates
  • Cover at least one month (5 consecutive weeks)
  • Show gross income
  • Show net pay
Pension statements (private/company/state) must:
  • Show regularity of payment
  • Not be older than 12 months
Annuity letters must
  • Show lump sum invested in fund
  • Show amount payable monthly
  • Show end date if applicable
  • Not be older than 12 months
Pensions (not yet receiving) when considering age restruction policy exceptions 100% Statements from the organisation providing the pension confirming both the projected pension income and the assumed normal retirement date or FCA regulated letter from the Scheme Administrator
Disability state benefits
As listed in the Disability Discrimination Act 2005

Disability Living Allowance, Attendance Allowance, Income Support, Council Tax Benefit, Invalid Care Allowance, Disability Working Allowance, Incapacity Benefit, Industrial Injuries Disablement Benefits
100%
Subject to sustainability over the term and overall level of reliance.
Latest DWP Benefits Statement and 3 months’ bank statements clearly identifying the source of the income

Care: assess sustainability of income source during full term of the mortgage and level of reliance on state or other benefits

 

Important information
 
1. 'Bonus’ income evidenced as being paid monthly as non-discretionary pay, effectively as a regular commission, can be considered when assessing affordability. For residential mortgages annual bonus income can only be utilised in the affordability calculation where the minimum standard income criteria are met:
  • Sole application – the applicant must have a gross income of at least £75,000 (excluding annual bonus).
  • Joint application – one applicant must have a gross income of at least £75,000 (excluding annual bonus).
  • Joint application – where no individual income is over £75,000, joint gross income must be at least £100,000 (excluding annual bonus).
2. Applications can be considered where additional income in the form of bonuses, commission and overtime totals more than 100% of basic annual income provided the total used in assessing allowable gross income and affordability does not exceed 100% of the basic income used.

 

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.

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, 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.

AVMs are only suitable for further borrowing where the latest valuation was a physical one – ie not an AVM.

In all cases where the latest valuation was an AVM, a Non-Disclosed PRA valuation must be requested.

* For example, via MTE or Trigold.

B

Mortgage term: 5-35 years (25 years for interest only) Minimum age: 18

Maximum age at end of mortgage term: 70 or the normal retirement age. Where the maturity date of the requested mortgage would be later than this for any applicant, applications will be considered on an individual basis. Please note, the mortgage term cannot extend into retirement for interest only mortgages. To assist our underwriters please provide both:

  • Details in full of how your client will repay the mortgage in retirement, eg, from a company/private pension, sale of another property or from investments or inheritance
  • Provide Documentary evidence to demonstrate serviceability into retirement, together with confirmation that you have discussed affordability into retirement and that your client is comfortable they will be able to meet the mortgage repayments until the end of the mortgage term

Note: Applications can be considered where 1 or more applicants will be retired or aged over 70 at maturity of the mortgage, provided affordability requirements are met by younger applicant/s who meet standard lending policy with regards to age restrictions.

Residency: All mortgage applicants must be assessed in terms of their rights to reside in the UK, and whether or not they currently live in the UK. Applicants who are UK or EU/EEA citizens or applicants with Permanent Rights to Reside (PRR) in the UK, and have been living in the UK for 2 years or more are acceptable under the lending policy. Applications from refugees must not be considered until they have obtained PRR.

Cases where all or one of the applicants do not meet the above criteria will be assessed individually by an underwriter. Please contact the IBC on 0345 073 3330* to discuss all such cases and what further criteria and documentary evidence applies. Lines are open Monday to Friday 9am-5pm.

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. 
 
Where there are 3 or more applicants, Lending Standards rules will return a “refer” decision for underwriting review.
 
Only 2 borrowers are allowed for Openplan Offset Mortgages.
 

C


You will need to confirm the identity and verify the address of each customer. If you are interviewing the client face-to-face and they are new to Barclays you will need to obtain one form of personal identity and one form of address verification. If you do not meet them face-to-face, you will need to obtain one form of personal identity, one form of address verification plus one further supporting item.

Please note: No document can be used as two forms of identification.
For MAX (this is Mortgage Application Xpress, our online mortgage application tool) applications please record full details of the personal and address identification documents in the 'Solution Completion' section – there is no need to send copies of the documents to us, although you should retain copies as we may on occasion ask for copies to be submitted to us.
For other online submissions* that are supported by a Certificate of Introduction details of the personal and address identification documents seen will be recorded on the certificate. Please refer to the Applications & Forms section on our website to get a Woolwich Certificate of Introduction. Again, there is no need to send copies of the documents but don’t forget to retain copies on your file just in case we request them for audit purposes.
* For example via MTE, Trigold etc.
The following tables detail the documents which are acceptable to us. Expired documents and documents outside the specified timeframes are not acceptable.

Proof of identity:
Current full signed UK passport with a Machine Readable Zone (MRZ)
Full UK driving licence (photocard) – address details must relate to the current residence and the licence must not have expired. (A provisional licence and/or paper counterpart are not acceptable.)
Full UK driving licence (old style paper) – address details must relate to current residence.
Current full signed foreign passport with a Machine Readable Zone (MRZ)
EU National Identity Card with a Machine Readable Zone (MRZ) – incorporating signature and photograph.
Northern Ireland Electoral Card will be considered for applications originated in Northern Ireland where the applicant is unable to provide any other form of acceptable proof of identify.
Note: ID documents in alternate name must be supported by evidence of a name change e.g. marriage certificate, deed poll document, civil partnership registration
 
Address verification:

  • The document must as a minimum, show the applicant’s first initial and surname
  • Full UK driving licence (old style paper).
  • Full UK driving licence (photocard) – address details must relate to the current residence and the licence must not have expired. (A provisional licence and/or paper counterpart are not acceptable.)
  • Voters Roll at the current address where there is a positive match to the applicant. Evidenced by local authority letter (less than 3 months old) or search report e.g. Equifax/Experian.
  • Bank/Building society/Credit card statement (personal not business)- must be less than 3 months old. Internet statements are not acceptable.
  • Latest itemised UK mortgage statement - must be less than a year old.
  • Utility bill must be less than 3 months old. Utility Warehouse bills are acceptable.  Internet/online utility bills are not acceptable.
  • Latest Council Tax demand - must be less than a year old, and be addressed to AND relate to the same property
  • Latest HM Revenue & Customs Tax demand - must be less than a year old.
  • Latest HM Revenue & Customs PAYE coding notice - must be less than a year old.
  • Government Benefits Entitlement Letters/Benefit Books must be no older than 12 months. This includes: Pension, Child Benefit, Family Tax Credit, Disability Living Allowance and Personal Independence Payment.
  • Current Tenancy Agreement from Local Authority or Housing Association - incorporating applicants name and address (tenancy agreement from private landlord not acceptable).
  • Household or Motor Insurance Certificate, renewal notice or current policy schedule.
  • TV Licence Renewal must be no older than 12 months.
  • Shotgun licence

Unacceptable documents:
The following documents are not acceptable as proof of identity or address verification:
Immigration documents and travel documents – these are not a suitable substitute for a valid passport.
Mobile phone bills.
Internet/online bank statements or utility bills that have been printed directly from the internet.
A print out of latest transactions from the client’s bank is not acceptable as an alternate to a bank statement
Provisional driving licences
Any passport or ID card without a Machine Readable Zone (MRZ)

 
Please contact the Intermediary Support team via web chat or call 0345 073 3330 for guidance if your client is unable to produce acceptable documentation.
Please note that we can only issue a mortgage offer once all personal and address identification requirements have been completed for all clients.
 

The monthly amount to be paid towards the following commitments 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 under shared ownership or shared equity loan schemes (including Help to Buy: equity loan)
    - The commitment for shared equity loans will need to be entered as a future commitment in the ‘Shared Equity’ dropdown box. The system will then take 3% per annum of the outstanding balance of the loan as a commitment for affordability
    - All other deferred credit should be entered in the ‘Deferred Credit’ dropdown box
     
  • 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, should 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.  For properties that are let, any shortfall between monthly rental income received and actual monthly mortgage payment should be included as a commitment.

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, ie, second residential homes, but not any property confirmed as being on a Buy to Let or Permission to Let basis.

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 (eg AVCs) being paid regularly from income. ‘One-off’ contributions, for example from an annual bonus, can be disregarded.
  • 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

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.

In all cases, however, we will require the applicant to have an established 3-year track record of employment within the same line of work and to have been contracting for a minimum of 1 year either on an employed or self employed basis.

  • If applicants choose to manage their own tax by setting up a limited company or contract on a self employed basis then they should be considered to be self-employed. Please see our self-employed section for further details
  • If they are paid via an umbrella company who pays tax and NI for the applicant (effectively they become a PAYE employee) then we would need to see their income evidenced by P60/HMRC Annual Tax Year Overview, payslips and bank statements
D

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 dependant relative must be occupying the property rent-free.

Where a property is being purchased, applicants are expected to provide a deposit of at least 10%* 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 exceptions to this rule are:

  • Where Barclays have agreed to provide a short term loan
  • 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.

Local Authorities and Housing Associations may offer properties for sale at a discount, where the discount is set as a percentage of open market value, for example 80%. This discount may apply in perpetuity; that is, for subsequent sales the owner can only 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 that the restriction does not apply to the lender who may sell the property at open market value.

E

Employed applicants are required to have been employed by their current employer for 3 consecutive months prior to application or to have been in continuous employment with no gaps for the last 18 months.

Where an applicant works for a “relative or partner”* who owns more than 15% 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.

F

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 contribution which is held in a Helpful Start account and applicants are then able to purchase a property with no deposit or a personal deposit of just 5%. After 3 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 applicants earn over £50,000 individually or collectively this will go up to 5.5 times
  • Maximum loan amount of £500,000
  • Maximum term of 25 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 3 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. Such applications should be submitted under the NewBuy Scheme
  • 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 3 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

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.
 

 

H

Help to Buy: mortgage guarantee scheme

Many people today find it difficult to get on to the housing ladder or are unable to move to a larger property because of the large deposits needed. To help address this, Barclays is supporting the government-backed Help to Buy: mortgage guarantee.

Help to Buy: mortgage guarantee criteria

  • The property must be in the UK with a purchase price of £600,000 or less
  • Applicants must plan to live in their home and not let it out
  • Applicants must have a deposit of at least 5%, but less than 10%
  • Maximum term length of 35 years
  • The affordability rate for applications under the scheme is 7.24%
  • Income multiples are capped at 4.49 times income
  • Residency/Citizenship requirements – normal lending policy should be applied – see Residency
  • An applicant cannot apply for a Help to Buy mortgage if they or any occupier, will own a BTL property or have a second residential property at completion, even if it is on a Permission to Let basis. This is to be evidenced by the customer signing an additional declaration
  • The mortgage must be taken on a capital and interest repayment basis – interest-only mortgages, or part and part, are not available with Help to Buy
  • The scheme is available to existing homeowners who are moving home and first time buyers, and can be used to purchase a new build or an existing house
  • The mortgage cannot be used on a shared equity or shared ownership purchase, nor can it be combined with the Barclays Family Springboard mortgage
  • All applicants must meet all of our standard affordability and underwriting criteria
  • Part-exchange is not permitted
  • Applicants cannot port an existing mortgage onto the property. The Help to Buy mortgage must be taken for the entire mortgage amount 
  • Joint Borrower/Sole Proprietor is not available with Help to Buy

Incentives

  • The following non-financial incentives are acceptable but must be declared to the valuer on the CML ‘Disclosure of Incentives’ form so they can properly be taken into account:
    • 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
       
  • Any builder deposit/cash incentive, ie stamp duty, legal costs and estate agent fees, under this scheme must not exceed 5% of the purchase price. It is not acceptable for any builder cash incentive to be used as part of the 5% deposit which must be funded from the applicant’s own resources

Additional Borrowing

  • Additional borrowing is not available if a customer has a mortgage under the Help to Buy: mortgage guarantee scheme
  • If a customer does wish to borrow more, then they will be required to redeem and take out a new mortgage on a new product, paying any applicable fees

Porting

  • Products under the Help to Buy: mortgage guarantee scheme are not portable.
  • If a customer wishes to move home during any Early Repayment Charge window they will be required to redeem their mortgage and pay any applicable fees.

 

Setting aside a big deposit for a new home can be a challenge. But with the government-backed Help to Buy scheme, customers with smaller deposits can qualify for loans on new-build homes of up to £600,000 in England.

How the scheme works

The government provides an equity loan through the Homes and Communities Agency of up to the limit for your region (15% in Scotland, 40% in London, 20% everywhere else) and we provide the rest. The equity loan will require an affordability assessment to be carried out by a local HomeBuy Agent.

Find out if your clients are eligible

  • They’ll need a minimum 5% deposit. A part-exchange from an existing property isn’t allowed
  • They’ll need to be a first-time buyer or existing homeowner moving to a new residence
  • The property purchased must be their sole residence, and cannot be let out (even if they’re a member of the Armed Forces)
  • The applicant, or any occupier, can't own a second property, even if it’s a Buy to Let or Permission to Let property 
  • Maximum 35 year term for the mortgage
  • Income multiples are capped at 4.49 times income
  • Their home must be built by a Help to Buy registered builder
  • They must choose a mortgage from our Help to Buy product range, which is available on a repayment basis only 
  • They can’t port an existing mortgage onto the property. The Help to Buy mortgage must be taken for the entire mortgage amount 
  • Help to Buy: equity loan mortgage products are not portable
  • Residency/Citizenship requirements – normal lending policy should be applied – see Residency
  • Local Authority Shared Equity schemes, on similar terms to the Help to Buy Equity scheme, are acceptable but only where Barclays security is not compromised through any scheme restrictions. These will be based on the same lending criteria as the Help to Buy Equity Scheme

About the government equity loan

  • The loan must be repaid in 35 years, or sooner if they sell the property
  • The loan is interest-free for the first 5 years, followed by a fee of 1.75% in the sixth year, and rising annually by RPI plus 1%
  • The delayed equity loan payments for Help to Buy: equity loan will be taken into account by the system and included in the affordability assessment
  • The commitment for these loans will need to be entered as a future commitment in the ‘Shared Equity’ drop-down box. The system will then take 3% per annum of the outstanding balance of the loan as a commitment for affordability
  • The following non-financial incentives are acceptable, but must be declared to the valuer on the CML ‘Disclosure of Incentives’ form so that they can properly be taken into account:
    • White goods (where not included as standard specification)
    • Floor coverings
    • Integrated lighting (downlighters)
    • Kitchen upgrade, including tiling and worktop
    • Bathroom upgrade
    • All electric upgrade – ie additional sockets, TV points, etc
    • PV (photovoltaic) panels
    • Turfing/landscaping
  • Any builder deposit/cash incentive, ie stamp duty, legal costs and estate agent fees, under this scheme must not exceed 5% of the purchase price. It is not acceptable for any builder cash incentive to be used as part of the 5% deposit which must be funded from the applicant’s own resources.
  • There must be no restriction on sale of the property – this includes the existence of any S106 agreement

To find out more, just call the IBC at 0345 073 3330.

Re-mortgage from another lender

  • All Help to Buy equity loan products from Barclays are purchase only and so are not available to customers re-mortgaging to us who have a Help to Buy equity loan mortgage with another lender.
  • Re-mortgages can be accepted under standard shared equity re-mortgage criteria. The applicant must meet all standards and LTV criteria outlined and should select a product from our standard range. Please see the Shared Equity section for further details.

Help to Buy (Scotland)

Help to Buy (Scotland) policy requirements are the same as that for the scheme applicable in England (above) except for:

  • The Scottish government provides an equity loan of up to 15% of the property's value
  • The maximum new-build property value is £230,000
  • Available on properties in Scotland only
  • There is no interest charge on the equity loan portion during the lifetime of the loan – it is interest-free – and as such it shouldn’t be included in any affordability assessment

Help to Buy (Wales)

Help to Buy (Wales) policy requirements are the same as those for the scheme in England (above) except for:

  • The maximum new-build property value is £300,000
  • Available on properties in Wales only

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.
 

I

Affordability is the most important factor in assessing and approving a mortgage. However, income multiples do provide a useful addition to this by setting an absolute limit to the maximum borrowing total.

To assess income multiples, Barclays takes into account credit score, the applicants’ individual circumstances, as well as factors such as loan to value (LTV) and debt to income ratio. Our standard Income Multiple table is outlined below:

  Scenario Maximum Income Multiple
1 Maximum standard income multiple for aggregate lending >£175K  5.00
2 Maximum standard income multiple for aggregate lending <=£175K  4.49
3 LTV greater than 85% and income >£50K  4.49
4 LTV greater than 85% and income <=£50K   4.00
5 Debt to income ratio >=20%*   4.00
*Debt to Income Ratio is calculated as existing monthly credit commitments/gross monthly salary

 

The maximum borrowing amount allowable will be determined by "verified allowable income" x "income multiple allowable" less any non-redeemed additional property mortgage balance/s other than those confirmed as Buy to Let/Permission to Let.

Different income multiples apply for products on the Help to Buy schemes.

The maximum loan to value allowed on an interest-only basis is 75%. Where sale of property is used as the repayment vehicle, clients can borrow up to  75% LTV on residential mortgage, however this must be made up of a maximum 50% LTV in interest only. After the interest only element of the lending, customers are required to have £300K of equity in the property.
 
The minimum loan size for new Interest Only applications is £300k (£300k in aggregate for Further Advances) however existing Barclays mortgage customers looking to Rate Switch on a like-for-like basis the minimum loan size requirement will not apply.
 
The maximum term for an interest only mortgage is 25 years and cannot extend into retirement.
 
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. all allowable income types not including any annualised performance bonus paid at the discretion of any employer.
 
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 & 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 – where sale of property is to be used as the repayment strategy for interest only borrowing a Maximum LTV of 75% applies subject to any interest only borrowing not exceeding 50% LTV. In addition, at the outset, there must be a minimum of £300k equity (this includes any capital & interest borrowing) after accounting for any interest only lending amount. E.g. £600K property (based on lower of valuation and purchase price); maximum interest only element is £300K (50%) with a maximum £150K on capital & interest repayment (total LTV 75% with £300K equity once the capital & interest element is repaid).
 
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. 

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.

Repayment vehicle Criteria Documentary requirement Plausibility assessment
Existing endowment policy Interest-only mortgage amount must not exceed the expected maturity value – must have been held for 12 months
 
Latest annual statement – the statement must have been issued no longer than 1 year previously Maturity value assessment is undertaken by the online application system based on pre-determined market rates of return of 4.5%. The current asset value, maturity date and monthly premium details should be input into the online application system
Existing Stocks and Shares ISA; existing share, unit or investment trust (professionally managed) Interest-only amount must not exceed the calculated maturity value – must have been held for 12 months Latest statement – the statement must have been issued no longer than 1 year previously (Current balance evidenced) + (current monthly investment x term of mortgage in months)* must be sufficient to cover the interest-only mortgage amount on maturity – potential growth must not be included
Sale of mortgaged property For residential mortgage a maximum LTV of 50% and minimum equity £300k applies (note clients can borrow up to 75% LTV where the sale of property is used but a minimum of 25% LTV must be taken on a capital and interest repayment basis)

 

* For annual investments use current annual investment x term of mortgage in years (Note: maximum annual investment amounts apply to ISAs)

We allow the use of internet bank statements as supporting documentation for assessment purposes given the following criteria:

Internet bank statements stamped and certified by issuing bank:
This confirms that they are a true reflection of transactions and can be accepted.

Internet bank statements NOT stamped and certified by issuing bank:
If the internet bank statements have not been stamped and certified by the issuing bank the following steps must be followed:

  • 1 month's internet bank statement and corresponding payslip must be submitted in all cases. These are to be certified as true copies in the normal way
  • The statements must show the account number and sort code with the full first and surname of the applicant(s). It is acceptable for middle names to be present as initials

If the customer's first and surname are not on the statement, certified documentary evidence demonstrating the customer connection to the account is also required. This can be in the form of:

  • Correspondence from the accounting holding bank showing full name, address and account number
  • Copy of a cheque evidencing the full name and account number
  • The corresponding payslip that evidences the salary mandated to the account must show the customer's full name
  • P60 where the full name can be aligned to the payslips through the National Insurance number, which in turn can be connected to the bank statements provided 

Statements can be in no way edited and all debit/credit entries and running balances must be visible.

THE ACCEPTANCE OF INTERNET BANK STATEMENTS IS NOT ACCEPTABLE FOR KYC PURPOSES.
 
 
 
 

J

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.

Overview

As part of our Helpful Start provision, the Family Affordability Plan will see Barclays Group consider mortgages where one of the joint borrowers is not going to be a co-owner of the property, ie to help first time buyers purchase their first property by enabling parents to assist with their son’s/daughter’s borrowing requirements through a joint mortgage.

This facility is not available on properties in Scotland and Northern Ireland.

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:

  • 90% on purchase; 90% on like for like remortgages reducing to 80% on remortgages where any element of capital raising is required; and 80% for additional borrowing (further restrictions will apply if the mortgage is on interest only)
  • 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
 

L

We understand that high net-worth clients are valuable to you. Our large loans process gives you instant decisions for mortgages over £600,000. You will have access to our senior underwriting team offering more flexibility and discretion for those applications which need a more considered approach. They will also advise you of any supporting documentation that needs to be submitted. To ensure we give you and your client(s) the best possible service there is also a dedicated processing team for large loans.

Call our Large Loans Team on 0113 296 5702 *

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.

Minimum loan is £5,000 (£300,000 for Interest Only subject to product availability).

Any lending that meets policy rule criteria but where the maximum aggregate amount of residential mortgages outstanding with Barclays for any borrower will exceed £600,000, will be referred for full manual assessment by Barclays High-Value Lending Team (HVLT).

Loan amount (including any Mortgage Reserve)

Maximum LTV ratio
Subject to product availability

(based on purchase price or valuation, whichever is lower)

Up to and including £500,000
  • Purchase 90% (New Build 85%, Family Springboard 95%)
  • Remortgage like for like 90% (New Build 85%)
  • Remortgage where any element of capital raising 80%
  • Additional Borrowing 80%
  • Interest only mortgages 75%
Please note, further restrictions may apply
Greater than £500,000

Subject to individual assessment by HVLT up to a maximum of:

  • Purchase 85%
  • Remortgage like for like 85%
  • Remortgage where any element of capital raising 80%
  • Additional borrowing 80%
  • Interest Only mortgages 75%

Note: Barclays also supports the Help to Buy scheme, which allows purchases at increased LTV levels. Please refer to our rate sheets and other policy pages, or contact us via web chat or call the Intermediary Support team on 0345 073 3330 for more information.

M

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.

N

Barclays' definition of a 'new build' is a property that was first registered 2 or less years ago OR the property is subject to first sale by the developer, regardless of time or any rental usage in the interim. This also applies to newly converted properties. Maximum LTV is 85% (subject to product availability) for purchases and 80% for remortgages or additional borrowing – under specialist schemes such as Help to Buy the maximum LTV may be higher.

Builder’s Deposit/Incentives

Builder’s cash incentives are acceptable as part funding of the deposit provided that the following are met:

  • The maximum amount of any builder’s cash incentive is capped at 5% of the lower of the full purchase price or valuation
  • The maximum LTV for applications with any such builder’s cash incentive is restricted to 85% of the lower of the full purchase price or valuation
  • A maximum of 5% of the full purchase price (or valuation if lower) can therefore be funded by a builder’s cash incentive with the remaining 10% being sourced from the applicant’s own funds
  • The deposit/cashback does not have to be repaid and the builder does not intend to register a charge against the property
  • Deposit monies (including gifted deposits) must be controlled by the solicitor
  • In all instances where there is an incentive (financial or non-financial), this should be disclosed to the valuer on the CML ‘Disclosure of Incentives’ form so that they can be taken into account when valuing the property

The following non-financial incentives are acceptable:

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

Please note alternate deposit/incentive requirements apply to the Help to Buy scheme. Please see its individual policy page for further information.

Offer Validity

A mortgage offer is valid for a 6 month period from the date the mortgage application is received by our teams.

Purchases on new build properties are often agreed off plan or in the early stages of development. It is therefore important to stress to the customer that the valuation/mortgage offer is only valid for 6 months. They also need to remember that the product selected may not be valid for 6 months; it may have a shorter product availability date. If the mortgage application does not complete in time then a full re-assessment must be carried out including a re-inspection and status assessment and possibly selection of a new product. All costs involved will need to be covered by the customer.

Reinspection Fee

If completion has not taken place 6 months from the date of original valuation a reinspection will be required. The applicant must cover the cost of this.

Second Properties

Please be aware that if a customer already owns a property (and they are not selling that property) then our maximum LTV is 80%. Under specialist schemes like Help to Buy a customer will be unable to purchase a new property if they own any other properties (be they residential, BTL or held on Permission to Let) in the background.

Sub-Sales and Reassignment of Sale Contracts

Sub-sales or reassignment of sale contracts/leases occur where a new-build property is currently contracted for a sale to a 3rd party which has yet to be completed. These are acceptable provided:

  • The valuer instructed by the Bank is aware of the nature of the transaction
  • The LTV is below 70% of the lower of purchase price or valuation
  • The total mortgage lending is less than the contracted sale price being paid by the 3rd party
  • All deposit funds are evidenced as being from the applicant’s own resources
  • There is no family or other relationship between any applicant and the vendor or 3rd party

Any transaction not meeting all of the above criteria must be declined.

 

O

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 fully assessed against current lending standards with refreshed credit search, status documentation and re-offered for a further period of 6 months with a product from the current range. An updated valuation should be requested in all scenarios with the exception of where the tolerance, referred to below, applies. 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.

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.

P

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 30 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 who incur an ERC charge on redemption of the original mortgage but do not complete on a new purchase within 30 days may have any ERCs refunded as long as they take out a new mortgage of at least 75% of the value of their redeemed balance on a current product. The new mortgage must complete within 180 days of the original redemption for the ERC to 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
  • Self-builds

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.
 

R

Where an applicant is currently on, or is to commence, a known period of reduced income, the affordability and overall lending assessment will be based on the “return to work” income details.

Considerations:

  • In order to verify "return to work" income, an employer’s letter, addressed to the Bank, should be obtained confirming when the applicant is returning to work, full income details and working hours.
  • Where an employer’s confirmation is not available further documentation should be obtained such as payslips/P60s/HMRC Annual Tax Year Overview together with information regarding length and nature of employment, proposed number of hours to be worked upon return, savings to subsidise commitments/lifestyle whilst on period of leave.
  • Further information may be required in order to fully assess based on individual circumstances.

Key consideration will be to ensure that the mortgage is affordable during any period of leave and that affordability continues to be met on a sustainable basis following return to work especially where reduced hours are to apply.

Maternity/Paternity Leave

During a period of maternity/paternity leave, statutory and occupational maternity/paternity pay are not sustainable therefore they should not be considered for lending purposes and the above process should be followed. Also, upon return to work, working hours may be reduced, affecting income. In addition, any childcare costs (if applicable) should be incorporated in the affordability assessment.

The documents detailed in our Allowable Income Table are used to prove income and status and are based on certain assumptions about the quality and content of the supporting documents. Where the documents provided or the Credit Reference Data do not adequately evidence the facts, we reserve the right to request further supporting documentation.

Key points to remember:

  • In addition, all customers will need to prove their identity and address, please refer to the Client Identification section
  • All applications will be subject to a credit score
  • We reserve the right for our underwriters to request (at any time) additional documentary evidence to confirm the status of any applicant
  • The bank statements provided must be the latest available and must show the applicant’s salary being mandated
  • Employed applicants must have been employed by their current employer for 6 consecutive months prior to their application, or must have been in continuous employment for the past 18 months with no gaps
  • Self-employed applicants must have been self-employed in the same line of business for the past 3 years. Please note that if the mortgage application is dated more than 12 months from the end of the last trading year, the client must provide, in addition to the required trading accounts, the latest draft trading accounts or a forecast income and expenditure statement produced by their accountant. Please see self-employed policy section for further information
  • If your client has legitimate reasons for being unable to produce any of the required documents, please call our IBC to see if they can obtain approval to accept alternative documents

Any supporting documents submitted must be certified copies of the original, please do not supply originals, just in case they go astray in the postal system. Where an individual document has multiple pages, it is acceptable to number each page and verify on the first page the total number of pages.

See our Allowable Income Table for more details.

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 applicants must be assessed in terms of their rights to reside in the UK, and whether or not they currently live in the UK.

Applicants who are UK or EU/EEA citizens or applicants with Permanent Rights to Reside (PRR) in the UK, and have been living in the UK for 2 years or more are acceptable under the lending policy. 

Applications from refugees must not be considered until they have obtained PRR.

Cases where all or one of the applicants do not meet the above criteria will be assessed individually by an underwriter. Please contact the Intermediary Support Team to discuss all such cases and what further criteria and documentary evidence applies.

We are happy to assist with the purchase of your client's property under the Right to Buy (RTB) scheme, providing they meet our standard lending policy.

Our main criteria for RTB are:

  • We can lend up to 90% 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 £58,500 (90% of £65,000)
  • 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 90% of the discounted price

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.

S

Scottish Surveyor Panel List

Please see the list below for the Scottish Surveyors who are on our approved panel.

Woolwich Scottish 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 that valuations still be valid when the case completes. Please view the Scottish Valuations residential policy or call 0345 073 3330 for more information*.

In Scotland we will accept a transcript of the Mortgage Valuation provided as part of the Single Survey report, as long as the surveyors are on the Barclays panel. However, this does not apply to Scottish New Build properties where we will instruct a valuation as part of the mortgage application process and a survey fee will be payable (please see our Tariff of Charges for further details).

For more information on Barclays approved surveyors in Scotland please contact 0345 073 3330*

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:

  • If the new property being purchased is for owner occupation
  • The deposit is being funded from their own resources – this may include equity release from any existing properties they own
  • If a detailed schedule of all properties owned is provided – covering addresses, lender details, outstanding mortgage amounts, monthly mortgage payments, current estimated valuation and details of the rental income being received if a property is Buy to Let

Where any existing property is either unencumbered or is held on a Buy to Let basis, it is acceptable to consider lending up to a maximum LTV of 90%.

If the other mortgage(s) held are on a Buy to Let (BTL) or Permission to Let (PTL) basis, then the commitments can be ignored. However, you will need to provide documentary evidence to confirm this.

For 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 BTL mortgages, simply detail the account numbers for us

For PTL Mortgages you will need to provide:

  • A letter from the lender confirming this

Please note that additional documentation may be requested to ensure that we are satisfied that the BTL/PTL mortgage payment can be excluded from affordability – eg, a copy of the tenancy agreement.

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 MSO. Advisers need to add actual costs for non-mortgaged properties. This applies to all other residential properties i.e. second residential homes but not any property confirmed as being on a Buy to Let or Permission to Let

The maximum borrowing amount allowable will be determined by “verified allowable income” multiplied by “income multiple allowable” less any non-redeemed additional property mortgage balances other than those confirmed as Buy to Let/Permission to Let .

 

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 regarded as self-employed when they hold at least a 15% share in a company.
 
Applicants must have been self-employed for a minimum of 3 years.

Sole Traders Partners/Directors/Limited Companies/Limited Liability Partnerships: Applicants must provide a combination of the following documentation as a minimum requirement:

 

Year 1 (most recent) Year 2
Tax Calculation* Tax Calculation*
AND AND

Corresponding financial accounts produced and signed by a qualified accountant OR HMRC Tax Year Overview

HMRC Tax Year Overview
Where retained profit or dividends are being used
Year 1 (most recent) Year 2
Tax Calculation* Tax Calculation*
AND AND
Corresponding financial accounts produced and signed by a qualified accountant HMRC Tax Year Overview


*A tax calculation is either

An online print out from the HMRC website showing the breakdown of the customer’s income – customers should be recommended to use this approach

or

The calculation or computation submitted by the customer’s accountant to HMRC, this should be on the accountant’s headed paper or with a covering letter

or

SA302 provided by HMRC – where an online version isn’t available

Tax Year Overviews should only be accepted where they demonstrate full payment of any tax liability. Where year 2 documentation doesn’t demonstrate this, underwriters have the discretion to request financial accounts. However, any outstanding tax liability must be accounted for when assessing affordability.

At the discretion of Mortgage Services, if the most recent (year 1) financial accounts or Tax Year Overview aren’t available when verifying income for limited liability partnerships then a letter from a finance/senior partner confirming income can be accepted to support the tax calculation documentation. This can be verified by bank statements.

Financial accounts for both years 1 and 2 are required where any element of retained profit and/or dividend income is being used.

It’s not acceptable to rely on tax calculations alone as verification of UK taxable income.

All supporting documentation provided must relate to a period ending no earlier than 18 months prior to the date of mortgage submission. 

If the applicant has an existing business relationship which is managed by Barclays, the Barclays Group has a more comprehensive picture of the applicant’s financial situation. Given this, the application will be considered to be within standard lending policy even if the last trading year end was up to 18 months ago.

However, if the year end is more than 18 months ago, the applicant must ALSO provide the following:

  • The latest draft trading accounts produced by their accountant covering the period since the last trading accounts were produced

OR

  • A forecast Income & Expenditure document produced by their accountant, covering the period since the last trading accounts were produced.

Financial accounts must be produced and signed by a qualified accountant who is an Associate or Fellow of one of the following professional bodies:

  • The Institute of Chartered Accountants in England and Wales
  • The Institute of Chartered Accountants in Scotland 
  • The Institute of Chartered Accountants in Ireland
  • The Institute of Chartered Secretaries and Administrators 
  • The Chartered Association of Certified Accountants 
  • The Chartered Institute of Management Accountants
  • The Chartered Institute of Public Finance & Accountancy
  • The Chartered Institute of Taxation 
  • The Association of Accounting Technicians
  • The Association of Authorised Public Accountants 
  • The Association of Chartered Certified Accountants
  • The Association of Independent  Accountants 
  • The Association of Taxation Technicians 
  • The Association of International Accountants

WITH ALL SELF-EMPLOYED APPLICATIONS EACH CASE IS INDIVIDUAL AND AS SUCH WE MAY HAVE TO REFER A CASE FOR MANUAL ASSESSMENT BY AN UNDERWRITER
 

Under shared equity schemes the customer funds the purchase of the property by way of a conventional mortgage, a deposit from their own resources and an ‘equity loan’ provided by the scheme provider.
 
The Scheme Provider will protect its equity loan by registering a second charge against the property or alternatively register a restriction against the property’s title, restricting the type of purchaser to whom the property can be re-sold. It is unacceptable to the Barclays Group for restrictions to be placed on resale of the property except where these comprise the Scheme Provider having an option to buy back the property at the full market value, such that if the Scheme Provider does not wish to exercise the option to buy back, the lender can sell the property on the open market without any further restriction applying.
 

  • The applicant must fund at least 25% of the purchase price of the property by way of mortgage and their own resources. Applications of up to 85% (subject to product availability) of that part of the purchase price to be funded by the applicant (by way of mortgage and their own resources) are acceptable
  • Applications must be on a standard repayment basis, ie, not interest only
  • The Barclays Group must be able to take a first legal charge against the customer’s interest in the property, prior to any charge registered by the Scheme Provider
  • Borrowing must be by way of a Barclays Residential Mortgage product
     

Scottish Government Schemes:

Barclays supports the following shared equity schemes specific to Scotland:

Open Market Shared Equity Scheme – 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 (including minimum 15% deposit from own resources). 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.

Additional Borrowing – can be considered to fully repay the equity loan obtained to originally acquire the property or to buy out a co-owner’s share in the property, providing the property valuation has increased significantly to ensure that we are not lending beyond 80% (subject to product availability) of the value of the equity share owned or above 80% of the current market value of the property. Where the equity loan is being fully repaid, LTV/Product criteria for purchases can be applied.
 
Re-mortgaging - Remortgages from another lender are acceptable provided agreement from the Scheme Provider is obtained and all areas of this section of Lending Standards are met (ie, the new mortgage should be for the same amount, unless part or the entire equity loan is being repaid or additional borrowing is required to buy-out a co-owner).
 
We should not lend beyond 80% of the value of the equity share owned or above 80% of the current market value of the property (increasing to 85% for ‘like for like’ re-mortgages.
LTV/Product criteria for purchases apply where the equity loan under the scheme is being fully repaid.   
 
Notes:
Products under the Help to Buy: mortgage guarantee scheme are not available for any Shared Equity proposition.
 
If necessary forward our policy to the Scheme Provider for them to establish whether their scheme fits our policy. An additional guide for solicitors can be found here 170 KB .

 

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. Applications of up to 85% (subject to product availability) of the discounted purchase price/share of 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 80% of the current market value of the share that the customer will own after staircasing. Where the customer is applying for additional borrowing to purchase the property outright, (ie 100% staircasing), then maximum LTV of 90%, in line with purchase criteria, can be considered (subject to product availability).
 
Re-mortgages from another lender are acceptable provided agreement from the Scheme Provider is obtained and all areas of this section of Lending Standards are met, ie, the new mortgage should be for the same amount, unless staircasing or additional borrowing is required to buy-out a co-owner. LTV is not to exceed 80% based on share owned, increasing to 85% for ‘like for like’ re mortgages. LTV/Product criteria for purchases apply where the property is being purchased outright, ie, 100% staircasing.
  
Notes:
Products under the NewBuy and Help to Buy schemes are not available for any Shared Ownership proposition.
Requests from applicants who do not have permanent rights to reside in the UK should be declined as these fall outside lending standards requirements.
 
If the scheme does not meet all the above criteria then Barclays will not lend.
 
If necessary forward our policy to the Scheme Provider for them to establish whether their scheme fits our policy. An additional guide for solicitors can be found here 170 KB .

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.

U

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 there must be an existing associated relationship with the Vendor, eg, child from parent, re-mortgage from joint to sole names, or similar circumstances.

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 10%, 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 10% 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.

V

Customers can appeal against Valuations only when there is more than a 25% variance between the customer’s estimated value and the actual valuation provided by the Bank’s nominated valuer. This applies to both Residential and Buy to Let cases.

If your customer wishes to appeal the valuation in line with the guidance above, you will need to email ekins.customercare@barclays.com. An appeals form will be issued and you will be required to supply 3 comparable properties sold in the last 6 months. 

Please note there is no valuation appeals process for existing Barclays customers looking to remortgage.

To be able to lend on a property, Barclays requires a valuation to be carried out. When you apply for a Woolwich 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.

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.

We’ll accept either a Vendor Gifted Deposit or builder’s cash initiatives as part funding of the deposit provided that:
 
  • The maximum amount of any gifted deposit or incentive is capped at 5% of the lower of the full purchase price or valuation
  • The maximum LTV for applications with any such builder’s cash incentive is restricted to 85% of the lower of the full purchase price or valuation
  • A maximum of 5% of the full purchase price (or valuation if lower) can therefore be funded by a builder’s cash incentive with the remaining 10% being sourced from the applicant’s own funds
  • With Vendor Gifted Deposits where the property is not a new build, the applicant must also provide a minimum 10% personal stake increasing by the relevant amount where loan to value restrictions apply
  • The deposit/cashback must not have to be repaid and the vendor/builder must not intend to register a charge against the property
  • Deposit monies (including gifted deposits) must be controlled by the solicitor
     
 
 

Important information
 
* To maintain a quality service, we may monitor and record phone calls. Calls to 0800 numbers are free when calling from a UK landline. Charges may apply when using a mobile phone or when calling from abroad. Read our call charges and information

This website is for the use of mortgage intermediaries only. All other individuals looking for information should visit the mortgages pages on Barclays.co.uk

 

If you reproduce any part of the information contained in this communication, to be used with or to advise clients, you must ensure it conforms to the Financial Conduct Authority's advising and selling rules. It is your responsibility to ensure that the information you are using is the most up to date in line with our most recent communications to professional mortgage advisors.  If you are unsure that you are using the correct versions please check with our Intermediary Support Team.
 

Barclays Bank PLC. Registered in England. Registered no. 1026167. Registered office: 1 Churchill Place, London E14 5HP. ‘The Woolwich’ and ‘Woolwich’ are trademarks and trading names of Barclays Bank PLC.


 

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