Buy to Let Lending Criteria

The following is a summary of the principal lending policy, other rules may apply. You can also download our lending criteria as a pdf.

If you have specific questions why not check our Buy to Let FAQs?


1. General Buy to Let criteria

Applies to all products, unless otherwise stated.

Term

Min: 5 years - Max: 35 years.

New business application submission

All new business applications should be submitted via TMW Online. Exceptions apply. Please see TMW Online for details.

Loan Purpose

  • Purchase or remortgage in England, Wales and mainland Scotland
  • Capital raising for business purposes is not accepted
  • Raising capital for other legal reasons including for deposit/purchase of a Buy to Let property will be considered
  • Remortgages only acceptable after the property has been owned for a minimum of 6 months

Further advances

May be considered after a minimum of six full consecutive monthly payments have been made. Subject to revaluation in all instances. The minimum amount is £2,500 (unless otherwise stated).

Capital raising for business purposes is not accepted. Raising capital for other legal reasons including for deposit/purchase of a property will be considered.

Further advances for customers aged over 70, will only be considered for essential/structural repairs for the security.

Offer Validity

  • Purchase Applications: 6 months from date of 1st offer
  • Remortgage Applications: 3 months from date of 1st offer
  • Further Advance Applications: 3 months from date of 1st offer

Capital repayment allowance

10% capital repayment per year without penalty. Cannot accrue year on year and not available if the whole loan is being repaid or security released.

Tenancy Agreements

  • Accepted in the form of an Assured Shorthold Tenancy Agreement (Short Assured Tenancy in Scotland) for a period of up to thirty six months
  • Non-Assured Shorthold Tenancy Agreement applications (Local authority/Housing Association Tenancy and Corporate Tenancies) also considered up to thirty six months
  • Corporate lets are considered for use by the company’s employees where the company employs more than 1,000 staff
  • One tenancy agreement accepted per property, except for HMOs where multiple tenancy agreements are accepted
  • Purchase applications where existing tenants will remain in the property are accepted, subject to a new tenancy agreement being signed on completion or the conveyancer confirms the benefit of the AST is transferrable to the borrower as a successor in title to the original landlord.

Change of security address

For changes to the security address during the application process, a new application will need to be submitted. Products and criteria at time of re-submission will apply.

Portability

Accepted. Applies when applicant simultaneously completes a mortgage for the same or greater amount keeping the same interest rate for that portion of the new mortgage without incurring an early repayment charge. Subject to meeting the company's lending criteria at the time of application.

Private sales

Will be considered subject to evidence of deposit and confirmation of:

  • How the applicant sourced the property
  • Any relationship between the applicant and the vendor
  • Whether the property is being purchased at full market value and if there are any incentives
  • Whether the vendor will continue to reside in the property after completion (please note TMW will not accept these applications)

Sale and rent back

It is not permitted for the vendor to remain as a tenant in the property or to retain an interest in the property.

Property Investment Clubs/Companies

Applications to purchase properties sourced via Property Investment Clubs/Companies are not accepted.

Property

All properties must be in a lettable condition, to be determined by the valuer.

Properties not owned in personal name(s) (e.g. Limited Companies)

  • Applicants purchasing/transferring a property not owned in personal name(s) accepted providing they fall within one of the following categories:
    • TMW's approved list of builders
    • Local Authority/Housing Association owned properties
    • Properties where the owner is a lender listed in the CML handbook
  • No additional borrowing or increase in LTV will be permitted for existing TMW Limited Company accounts

Second charge

New applications with existing second charges are not accepted (unless repaid as part of the transaction).

Maximum LTV (unless otherwise stated)

Loan Amount
Maximum LTV
£350,000
80%
£500,000
70%
£1,000,000
65%
£1,500,000
50%

Maximum overall exposure per customer

Total BTL borrowing with Nationwide Group (including new loan)
Max LTV on new property
Up to £500,000
80%
£500,001 - £750,000
75%
£750,001 - £1,000,000
70%
£1,000,001 - £1,500,000
65%
£1,500,001 - £5,000,000
60%

Minimum loan

£25,001 (unless otherwise stated); minimum property value £50,000.

TMW multi property portfolio proposition

TMW's multi property portfolio proposition (for example, where rental income and LTV is averaged across the portfolio) is not available for new applicants. Existing multi property portfolio applicants may continue to operate their accounts on this basis, however no additional borrowing or increase in LTV will be permitted. Any new applications will be considered on a single property basis.


2. Applicant details

Applies to all products, unless otherwise stated

Applicants

  • Up to two applicants accepted per application
  • First Time Buyers considered when accompanied by an existing property owner (First Time or experienced landlord)
  • Buy to Let Guarantors not considered
  • The mortgage introducer cannot also be the applicant
  • Vendor cannot be a relative of the applicant
  • Regulated Buy to Lets (where the property will be occupied by the borrower or a member of the borrower's immediate family, now or in the future) are not accepted
  • Limited Companies as applicants not accepted

Applicant definitions and acceptable combinations

  • First Time Buyer (FTB): An applicant who has not owned any type of property (Residential or Buy to Let) for at least the last six months
  • First Time Landlord (FTL): An applicant who has owned their own home for at least the last six months, but has not owned and let a Buy to Let property for the last six months
  • Experienced Landlord: An applicant who has owned and let a Buy to Let property for at least the last six months (they may or may not own and occupy their own home)
Application combinations accepted
Applicant 1
First Time Buyer
First Time Landlord
Experienced
Applicant
2
First Time Buyer
No
Yes
Yes
First Time Landlord
Yes
Yes
Yes
Experienced
Yes
Yes
Yes
N/A
No
Yes
Yes

Residency

  • UK residents only.
  • Applicants with a previous address abroad in the last three years are not accepted.
  • Foreign nationals must be resident in the UK for at least three years prior to application, must have permanent right to reside and must have a UK bank account.

Age

Minimum: 21

Maximum age 70 at application


3. Income Assessment

Rental income

The gross rental income, confirmed by the valuer, must cover at least 125% (150% HMO) of the monthly mortgage payment and will be calculated using the following rates:

  • Fixed rates: Up to and including 75% LTV based on product pay rate or 4.99%, whichever is higher
  • Fixed rates: Above 75% LTV based on product pay rate or 5.99%, whichever is higher
  • Tracker/Variable rates: Based on product pay rate + 0.5% or 4.99%, whichever is higher
  • Buy to Let exposure with Nationwide Group of over £1m (before or after new loan):
    • Fixed rates: new property application based on product pay rate or 5.99%, whichever is higher
    • Tracker/Variable rates: new property application based on product pay rate +0.5% or 5.99%, whichever is higher

For remortgages, we will apply the lower of the passing/current rent or estimated rental value as given by the valuer.

Personal income

Proof of personal income is not required, except for:

  • First time landlords/first time buyers
  • Experienced landlords who are non-owner occupiers (purchase only)

Personal income will be used in conjunction with other information relating to the applicant and property to assess the case, to validate that the Buy to Let loan will be used for its intended purpose.

Personal income from an experienced landlord (owner occuper) will not be required on joint applications.

We reserve the right to request proof of income on any case to support assessment of the application (e.g. high levels of unsecured debt, Nationwide Group BTL exposure over £1m).


Eligible income is defined as:

  • Gross earned income (excluding bonus, overtime and commission)
  • Pension income

Acceptable proof of income:

  • Self employed applicants: Latest SA302 (self assessment tax calculation form)*
  • Employed applicants: Latest payslip
  • Retired applicants: Latest payslip/pension statement

*if SA302 is not available an accountant's reference can be accepted. Please contact us with accountants details in order for us to request.


4. Source of deposit

TMW reserve the right to request evidence of deposit on all applications.

A minimum of one month's bank/building society statements(s) (dated within the last three months) is required for all applications:

  • If the deposit funds have been in the account for at least one month or the deposit is not in the form of a gift, then no further checks will be required
  • If the deposit funds have been in the account for less than one month, further evidence from savings, gifts and/or equity will be requested as follows

Applicant's own sources (Savings)

Acceptable Savings Proofs (UK Source):

  • One month's current bank or building society statement (dated within last three months) or passbook held in the applicant's name
  • A statement of the current value of ISA held in the applicant's name

Acceptable Savings Proofs (Non UK Source):

  • Non-UK EEA (European Economic Area) country source - three month's current bank/building society bank statement/passbook
  • Non-EEA country source - six month's current bank/building society bank statement/passbook

Where funds have been in a non-UK account for a period of less than three or six months respectively we require proof of their origination and evidence of funds transferred to applicant's UK bank account.

The source of any lump sum credit may be queried or proof of the build up of funds requested.

Gifted Deposit

Gifted deposit

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

Acceptable Proofs

  • Signed Confirmation of Gifted Deposit from the donor using the TMW template, available in the literature section at themortgageworks.co.uk (must be dated within the last three months)
  • Source of donor's funds - one month's bank statement showing available funds and evidence of any funds transferred into donor's bank account

Equity

If property is already sold or remortgaged (including Further Advances):

  • Copy of the completion statement from the solicitor who acted on the sale or remortgage of property, confirming property address, borrowers, sale amount, sale date
  • UK bank or building society statement showing transfer of funds from sale or remortgage of property

If property to be sold or remortgaged (including Further Advances):

  • Address of property being sold or remortgaged
  • Confirmation from solicitor that the deposit is being sourced from that property

If the property is held jointly with someone not party to the application, a gift letter (TMW template) is also required.

UK Limited Company

Accountants letter from Limited Company confirming how the monies are being released and that the Limited Company and all share holders will have no interest in the security property.

Inheritance

  • Confirmation from solicitor of the amount that is to be inherited and when this is/was released
  • UK bank or building society statement evidencing transfer of funds

Builder Cashback/Deposit/ Incentives

Builder incentives/cashback accepted subject to the following criteria:

  • Must be a purchase from one of TMW's approved list of builders (see TMW website for more details)
  • Any amount greater than 5% will be deducted to determine the net purchase price. TMW will lend against the lower of the net purchase price or value

5. First Time Landlords

Classified as an applicant, who has owned their own home for at least the last six months, but has not owned and let a Buy to Let property for the last six months.

  • Evidence of deposit and proof of personal income is required on all applications. See 'Personal income requirements' (section 3) and 'Source of deposit' (section 4)
  • Loan purpose: to purchase a new Buy to Let property
  • Maximum age 70 at application
  • Maximum 80% LTV
  • Maximum loan size £500,000 (unless otherwise stated)
  • First Time Landlords remortgaging a second residential property as a Buy to Let (for example, inherited property) are not accepted

6. Let to Buy

Classified as a first time or experienced landlord applicant who is remortgaging their existing residential property as a Buy to Let. Please see the Let to Buy section of the product guide for available options.

  • Maximum age 70 at application
  • Maximum 75% LTV
  • Maximum loan size £500,000 (unless otherwise stated)
  • The applicant(s) must have owned their residential property for at least six months (with or without a mortgage) at the time of application
  • Applications will only be accepted where there is a simultaneous onward purchase of a new residential property (which may be with another lender), to be confirmed by the acting solicitor prior to completion
  • The applicant must vacate the security address upon completion (new correspondence address should be provided)
  • If the new residential property is purchased by way of a mortgage – A copy of the onward residential mortgage offer must be provided prior to completion

Applications where the new residential property will be purchased with cash are considered, provided:

  • The current main residence is unencumbered
  • The onward purchase address will be provided at application
  • The same solicitor will be acting on behalf of the applicant for both purchase and remortgage transactions

7. Houses in Multiple Occupation (HMO)

TMW consider the following types of property as a HMO:

  • A property occupied by five or more people or with five or more lettable rooms in an area commensurate with multi letting
  • A property with more than one tenancy agreement in place

Properties subject to selective licencing only classified as HMO where at least one of the above conditions are met.


Please see the HMO section of the product guide for available options.

  • Maximum age 70 at application
  • Maximum 65% LTV Maximum loan size £500,000 (unless otherwise stated)
  • Experienced landlords only
  • Let to Buy applications not accepted
  • Rental cover will be assessed on a multi-tenanted basis
  • All let properties will be subject to an Assured Shorthold Tenancy agreement of a minimum of 6 months, maximum of twelve months. Single and multiple tenancy agreements accepted
  • A property must have no more than four habitable storeys and no more than one kitchen
  • Properties consisting of more than one self-contained unit under a single title are not acceptable
  • A property containing no more than nine lettable rooms
  • A Specialist Security valuation will be required

8. Property Restrictions

Property concentration exposure limits

The Mortgage Works will consider its overall exposure by applicant, geographical area and development when assessing applications. The maximum number of securities that can be considered per development is:

  • 1-3 units: 1 unit
  • 4-50 units: 25%, rounded down to the nearest unit
  • 51-80 units: 12 units
  • More than 80 units: 15%, rounded down to the nearest unit

These exposure limits are per applicant and include securities mortgaged to other lenders.

Minimum property value/purchase price

£50,000

New build Buy to Let applications

New build flats and houses are defined as:

  • A house/flat built within the last twelve months
  • A house/flat built over twelve months ago but still owned by the developer
  • A house/flat built over twelve months ago but the first purchase/legal completion of the property was less than twelve months ago
  • Applications for new build flats accepted up to a maximum of 65% LTV
  • TMW instructs its valuers to value all new properties (flats, houses and maisonettes) on an 'as new' basis
  • Builders must be on TMW’s approved list (see TMW website for more details)
  • If new, or built within 10 years, the security must have a warranty guarantee under NHBC, Premier, LABC, HAPM, Global Home, Castle 10, Build Zone, Build Assure, BLP, Zurich Municipal, CRL, Q Policy or have a qualified Architect’s, Surveyor’s or Structural Engineer’s Supervision Certificate (Professional Consultants Certificate).

Purpose Built flats and studio flats

The internal floor area must be no less than 30 square metres. Studio Flats must contain a separate bathroom and separate kitchen.

Properties Next Door

Applications not accepted where the proposed security is attached to a property owned by the applicant.

Property Developers

  • Property developers (a person who owns 25% or more of a business whose principal activity is property development) are not accepted
  • Applications for properties that have been built or converted by the applicant are accepted, subject to the property being let for a minimum of twelve months at the time of application.

Minimum lease on leasehold properties

Leasehold properties must have a minimum lease of 55 years at application and 30 years remaining on the lease at the end of the intended repayment term.

Local Authority Flats

A flat in a Local Authority or Ex Local Authority block of more than 5 storeys will be considered where the security is in Greater London.


Valuation fees

Including non refundable £150 application fee.

Purchase Price or Valuation
(whichever is higher)

Standard Valuation Fee †

Including Homebuyers Report †

Up to £100,000

£365

£450

£100,001 - £150,000

£390

£535

£150,001 - £200,000

£430

£620

£200,001 - £300,000

£490

£720

£300,001 - £400,000

£555

£820

£400,001 - £500,000

£615

£930

£500,001 - £600,000

£695

£975

£600,001 - £700,000

£755

£1,035

£700,001 - £800,000

£795

£1,115

£800,001 - £900,000

£865

£1,200

£900,001 - £1,000,000

£910

£1,275

£1,000,001 - £1,250,000

£1,125

By Arrangement

£1,250,001 - £1,500,000

£1,275

By Arrangement

£1,500,001 - £1,750,000

£1,475

By Arrangement

£1,750,001 - £2,000,000

£1,675

By Arrangement

Over £2,000,000

By Arrangement

† The total amount payable includes a non-refundable £150 application fee. For existing customers using our Multi Property Portfolio Buy to Let proposition, if more than one property is being financed simultaneously, the £150 is paid only once. For example the second valuation fee is £215 for property values up to £100,000.


Specialist Security valuation fees

Including non-refundable £150 application fee

Purchase Price or Valuation
(whichever is higher)

Standard Valuation Fee

Up to £200,000

£585

£200,001 - £300,000

£820

£300,001 - £400,000

£940

£400,001 - £500,000

£1,000

£500,001 - £600,000

£1,175

£600,001 - £700,000

£1,275

£700,001 - £800,000

£1,400

£800,001 - £900,000

£1,500

£900,001 - £1,000,000

£1,645

£1,000,001 - £1,250,000

£1,995

£1,250,001 - £1,500,000

£2,250

Over £1,500,000

By Arrangement



Valuation policy

Where a valuation for mortgage purposes is subcontracted to a panel of chartered surveyors, we make the same charge for the mortgage valuation or Homebuyers survey and valuation in accordance with the above table as we do when using a staff valuer. The difference between the table charge, excluding application fee, and that which the company pays the panel valuer covers The Mortgage Works' administration costs.

  • Re-valuation fees for further advances - 50% of the valuation fee (excluding application fee), rounded down to the nearest pound.
  • Further advance applications for Houses in Multiple Occupation require payment of the full specialist security valuation fee (including non-refundable application fee)
  • Re-inspection fee - £100.
  • Transcribe fee - £210 (includes a non-refundable £150 application fee).

Transcribed valuations

Transcribed valuations are not normally acceptable, except on purchase applications in Scotland where no fee is payable and the following conditions will apply:

  • The valuation must have taken place prior to submitting the application.
  • The valuation must have taken place in the last 90 days.
  • For Buy to Let valuations, the report needs to include a rental assessment.
  • Transcripts from privately instructed valuation reports are acceptable for a BTL purchase in Scotland if accompanied by a Home Report.
  • For Scottish private sales and New Build property applications, transcribed valuations will not be accepted - see below.

Scotland

A restricted panel of valuers are acceptable for purchases of property in mainland Scotland; please contact us for details.

  • For Scottish private sales and New Build property applications, transcribed valuations will not be accepted. Scottish applicants will require a full valuation to be carried out by TMW at the outset. The cost of the valuation will be payable by the customer and will be based on the current TMW standard valuation fee scale.
  • The valuer providing the transcription must be the individual who prepared the original Home Report or inspected the New property.
  • The Home Report must have a pre-exisiting "generic mortgage panel" report within it.
  • When the valuation figure is the result of a 'refresh' (update) of the original Home Report, it must be based on a further internal inspection that has taken place in the last 90 days.

House in Multiple Occupation

Houses in Multiple Occupation require a Specialist Security valuation.

Other information

  • The valuer will be instructed by TMW to determine the suitability of the security.
  • The valuation report and figures therein will not be challenged. In the case of BTL applications, we will apply the lower of passing rent or estimated rental value as given by the valuer.
  • Estimated rental value will be based on market rent for the property in the locality allowing for its most appropriate use.
  • If the valuation has been carried out and the property has been found to be of unsuitable security or the application does not proceed, the valuation fee will not be refunded.

Product switches

Pre-completion product switches require our underwriters' prior approval. Switch fees of £350 may be charged.


Solicitors

  • Solicitors/conveyancers with less than two partners will not be eligible to process applications for The Mortgage Works unless they are on our approved panel.

Separate Legal Representation

Where an applicant nominates a conveyancer to act for the applicant only, TMW will instruct a separate conveyancer to act on behalf of TMW at the applicant's expense. The applicant cannot instruct a separate firm to act for TMW. Please contact TMW for further information.


Additional product features

The below features are only available for single property applications on selected products subject to availability.

Products offering free standard valuations

  • Free standard valuations are available to a maximum property valuation of £500k
  • Available for properties in England, Wales and mainland Scotland (unless otherwise stated, please refer to product guide for further details)

Products offering cashback

Where a product offers a cashback benefit, the borrower will receive this when the mortgage starts. The cashback sum will be sent to the borrower’s conveyancer with the funds for the mortgage loan.

Products offering free standard legal fees

  • Free standard legal fees are available to a maximum property value of £500k
  • Available for properties in England, Wales and mainland Scotland (unless otherwise stated)
  • Applicable on selected remortgage and purchase products (please refer to product guide)
  • Not available where applicants wish to choose their own solicitor

We will pay the standard legal fees for your client's purchase or remortgage (as appropriate) of the property, except for the costs of any searches and reports or any payments to third parties such as the Land Registry or HMRC provided:

  • Your client uses our nominated conveyancers to act for them
  • The legal title of the property is already registered at the Land Registry
  • No existing secured loans will remain on the property after our mortgage starts
  • On a remortgage, no parties are being added to or removed from the property's legal title
  • The legal title of the property is freehold or leasehold

For a full list of non-standard fees your client may have to pay please download our additional charges guide and ensure a copy of this guide is provided to your client. The acting conveyancer will send your client a full list of the non-standard fees in the initial instruction letter.

If your client decides not to use the conveyancer selected by us and/or takes independent legal advice, this will not be covered under our 'free legal fees' scheme. In this instance an alternative product may need to be selected, which could incur additional fees.


Please note: The Mortgage Works reserves the right to request further information if deemed necessary.