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?


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
  • Remortgages acceptable after the property has been owned for a minimum of six months
  • Raising capital for non-business purposes including for deposit/purchase of a Buy to Let property, will be considered
  • Raising capital for non-structural home improvements will be considered

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
  • Buy to Let Remortgage Applications: 3 months from date of 1st offer
  • Let to Buy Remortgage Applications: 6 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.
  • Assets held by the customer for repayment of the mortgage are not acceptable where it is denominated in a currency other than pounds sterling (GBP).

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 (gifted equity is not acceptable)
  • Whether the vendor will continue to reside in the property after completion (TMW will not accept these applications)

Please note, applications where the applicant is related to the vendor are not accepted.

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). Consent to second charges post-completion considered on a case by case basis. This will be subject to criteria at the time of application, including rental cover assessment and LTV limits (currently 50% LTV before adding second charge).

Maximum loan per property

Product/Customer type
LTV
Maximum loan
Buy to Let
50%
£1,500,000
65%
£1,000,000
70%
£750,000
75%
£500,000
First Time Landlords &
Let to Buy
70%
£500,000
75%
£350,000
HMO
65%
£500,000

Maximum overall exposure per customer

Total BTL borrowing with Nationwide Group (including new loan)
Max LTV on new property
£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.


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 and occupied 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).
  • Consumer Buy to Let (CBTL): An applicant with no other let properties wishing to obtain a mortgage on a property that has either been inherited or has previously been occupied by the borrower or related person at any time.

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


Income Assessment

Rental income

The gross rental income, confirmed by the valuer, must cover at least 145% (150% HMO) of the monthly mortgage payment and will be calculated using the following rates:

  • Fixed rates: Product pay rate or stress rate, whichever is higher
  • Tracker/variable rates: Product pay rate + 0.50% or stress rate, whichever is higher
Stress rate
LTV
65%
75%
Product
2 year tracker
4.99%
5.49%
Lifetime Variable
4.99%
5.49%
2 year fixed
4.99%
5.49%
3 year fixed
4.99%
5.49%
5 year fixed
4.99%
4.99%
10 year fixed
4.99%
4.99%

Where the Buy to Let exposure with Nationwide Group is over £1m (before or after new loan) the new property application will be stressed at 5.99% or product pay rate as above.

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

Applications are not accepted where the rental income and/or the assets held by the customer for the repayment of the mortgage are denominated in a currency other than pounds sterling (GBP)

Personal income

Proof of personal income may be requested to support an application and used in conjunction with other information relating to the applicant and property, to validate that the Buy to Let loan will be used for its intended purpose.

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.


Source of deposit

TMW reserve the right to request evidence of deposit on all applications. The following proofs are required to evidence deposit:

UK savings

  • 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.

If the deposit funds have been in the account for less than one month, further evidence will be requested.

Overseas savings

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

Where funds have been in the account for 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.

Equity

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

  • A copy of the completion statement from the solicitor who acted on the sale or remortgage of the property, confirming property address, borrowers, sale amount and 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 the 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 is also required.

Inheritance

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

Gifts

  • A signed Confirmation of Gifted Deposit form from the donor (must be dated within the last three months). This is required for all applications where any of the deposit is a gift.
  • Source of donor's funds - one month's bank statement showing available funds and evidence of any funds transferred into donor's bank account.

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. Gifted deposits aren't accepted if the donor resides outside of the UK and/or the funds originate from outside the UK.

UK/Overseas stocks/shares

  • Most recent Share statement or Share Portfolio statement.

Business/Company

We'll request a letter from the Limited Company’s Accountant confirming how the funds are being released and that the Limited Company and all share holders will have no interest in the security property.

Please ensure you provide an email address for the Accountant so we can contact them.

Builder incentives/cashback

Builder incentives/cashback are accepted subject to the following criteria:

  • Must be a purchase from one of approved list of builders.
  • 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.

Pension

  • If pension funds have been released, bank statement/passbook (dated within the last three months) should be provided
  • If pension funds have not been released, latest pension statement (no more than twelve months old) showing sufficient funds to cover the deposit amount required should be provided.

Repayment of loans

Not accepted as a deposit source, including the following scenarios:

Repayment of loan (customer and gifts)
  • Repayment of a loan or monies (not a gift) which have been transferred from the applicant to a third party and back aren't an acceptable source of deposit.
Repayment of business loan
  • Deposits provided from the repayment of loans to the applicant’s company aren't an acceptable source of deposit.

First Time Landlords

Classified as an applicant, who has owned and occupied 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 is required on all applications. See 'Source of deposit' (section 4)
  • Loan purpose: to purchase a new Buy to Let property
  • Maximum age 70 at application
  • Maximum 75% LTV
  • Maximum loan size £500,000 (unless otherwise stated)
  • First Time Landlords remortgaging a second residential property as a Buy to Let (for example, inherited property) are not accepted

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 and resided in 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
  • With effect from 21 March 2016, where the applicant doesn’t already own Buy to Let properties, these customers will be defined as consumers under the EU Mortgage Credit Directive.

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
  • The onward purchase is not a private sale

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
  • Minimum property value is £100,000
  • 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 36 months. Single and multiple tenancy agreements accepted
  • A property must have no more than four habitable storeys and no more than one kitchen
  • Properties consisting of more than one self-contained unit under a single title are not acceptable
  • A property containing no more than seven lettable rooms
  • A Specialist Security valuation will be required

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 70 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

Purchase Price or Valuation (whichever is higher)

Standard Valuation Fee

Including Homebuyers Report

Up to £100,000
£205
£290
£100,001 - £150,000
£240
£385
£150,001 - £200,000
£280
£470
£200,001 - £300,000
£340
£570
£300,001 - £400,000
£405
£670
£400,001 - £500,000
£465
£780
£500,001 - £600,000
£515
£795
£600,001 - £700,000
£575
£855
£700,001 - £800,000
£630
£950
£800,001 - £900,000
£670
£1,005
£900,001 - £1,000,000
£725
£1,090
£1,000,001 - £1,250,000
£950
By Arrangement
£1,250,001 - £1,500,000
£1,050
£1,500,001 - £1,750,000
£1,160
£1,750,001 - £2,000,000
£1,275
Over £2,000,000
By Arrangement


Specialist Security valuation fees

Purchase Price or Valuation (whichever is higher)

Standard Valuation Fee

Up to £200,000
£435
£200,001 - £300,000
£670
£300,001 - £400,000
£790
£400,001 - £500,000
£850
£500,001 - £600,000
£1,025
£600,001 - £700,000
£1,125
£700,001 - £800,000
£1,250
£800,001 - £900,000
£1,350
£900,001 - £1,000,000
£1,495
£1,000,001 - £1,250,000
£1,845
£1,250,001 - £1,500,000
£2,100
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 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 rounded down to the nearest pound.
  • Further advance applications for Houses in Multiple Occupation require payment of the full specialist security valuation fee
  • Re-inspection fee - £100. TMW reserves the right to conduct an additional inspection of the property. For example, to ensure the completion of a new build property originally valued off plans.

TMW’s £150 non-refundable application fee no longer forms part of the valuation fee. This is now attached to the product and is payable on purchase, remortgage and further advance applications.

Transcribed valuations

Transcribed valuations are no longer acceptable, for further information please view our submitting Scottish Buy to Let purchase applications page.

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.
  • 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.
  • 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.

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

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.