£40,000

Minimum 3 years.

Maximum 30 years. 

75% LTV

Moderate rental demand of 3-6 months maximum 65% LTV – Please refer to Rental Demand Section for further information.

No minimum length since time of purchase.

Considered for any legal purpose.

Capital raises of more than £150,000 or when more than 50% equity is being removed that are not in keeping with profile should have a satisfactory explanation.

Ex-pats can be considered if funds are being used for a further purchase of a UK asset.

Acceptable where the bridge was used to complete works or auction purchase.

In other scenarios we will need to understand the reason bridging finance was used.

Maximum loan available is calculated against the lower of the purchase price or valuation.

Subject to:

• Acceptable when the difference in purchase price and market value is within 20% and the seller is unrelated to our customer
• If the difference in market value and purchase price is over 20% then further investigation will be required
• If there is evidence of stressed position of the seller then we cannot proceed.

Family related transfers at nil or below market value are acceptable with an acceptable explanation for the transaction with evidence that the family member is not in a distressed financial situation. We will
require:

• Mortgage history/credit search (at our discretion)
• Letter of no interest
• Clear bankruptcy search against outgoing owner
• Declaration of Solvency
• Indemnity policy

Transfers from associated Ltd companies at less than market value are unacceptable.

Increase in value since vendor purchased – For purchases where there has been a substantial increase in value since purchase, we require a written explanation which should be referred to the valuer for comment and validation.

When there is evidence of an option to purchase agreement and we can understand the reason for the for the purchase price being less than the Market valuer we can consider lending against the higher figure.

Source and Details

• Personal Savings
  Evidence of build-up of funds
  
  
• Gift
  Acceptable subject to evidence that the third party will hold no interest on the security
  
  
• Directors Loan
  Acceptable subject to transfer at full MV
  
  
• Additional Borrowing
  Details of the loan offer should be obtained for an assessment to be made on affordability
  
  
• Vendor Deposits and 2nd Charges
  Not acceptable
  
  
• Builders Incentives
  LTV reduced by 5%
  
  
• Bounce Back Loans
  Are an acceptable form of deposit with supporting evidence of funds within bank statements. These are subject to the loan being used for the benefit of the business.
  
  
• Mini-Bonds
  Not Acceptable

Applicants (including beneficiaries and guarantors) must be a minimum of 21 years of age and no older than 80 years of age at the start of the mortgage.

Applicants aged 70 years of age either at the start or during the term of the mortgage must have a clear succession plan in place to satisfy Shawbrook with the ongoing serviceability of the loan.
The applicant must apply for the loan before the date of their 81st birthday.

Applicants who are under 21 years at the start of the term or over 80 years at the end of the term are only acceptable if jointly borrowing with another applicant within policy age limitations above.

• Individuals (UK, EU and other foreign nationals residing in the UK, see ID section)
• LTD Company (UK Incorporated)
• PLC (UK Incorporated)
• LLP (UK Incorporated)
• Trusts (Minimum Loan size £1m new loans, Refinances case by case)
• SIPPS (Minimum Loan size £1m)
• Ex-pats

Loans where SDLT & CGT Relief is being claimed.

Requirement:

1. A minimum of 6 BTL properties owned (for MUFBs we consider each unit in the block as one property
and HMOs are considered as one property)

2. The borrower to be a UK based company and the guarantor(s) reside in the UK for tax purposes.

3. Letter from a recognised Accountant (CTA, ACA, ACCA, CIMA, ICAEW etc) confirming the following
(as a minimum):

• Confirmation they are comfortable that a Business exists
• Confirmation they have provided tax advice to the customers named on the application

In addition to the above, the following documents are required:

Any 1 of these documents required

• 2 years partnership accounts
• Evidence of the partnership paying tax on rental income for at least 2 years
• Any HMRC correspondence confirming partnership or registration

OR any 2 of these documents required

• A partnership agreement available dated 2 years ago or more OR any 2 of these documents required
• Partnership bank statements dated 2 years ago or more
• 2 years evidence of joint payment of tax on rental income

• No unsatisfied in the last 24 months
• Satisfied in the last 12 months considered by exception
• Large (>£5,000) historic considered by exception

Mortgage / Secured Loan / Tenancy Arrears

• 0 missed in the last 12 months
• No unpaid, historic arrears

Defaults
No unsatisfied >£100 in last 24 months

Unsecured borrowing (not including communications suppliers or utility companies)
No more than 3 instances of arrears or arrangements to pay in last 12 months

Bankruptcy/CVA/IVA
Discharged for at least 12 months

CIFAs
No adverse fraud data

Business Credit Profile
No history of the following within the last 36 months (this extends to associated companies within the same industry)

• Receivership
• Administration order
• Winding up petition
• Creditors or Compulsory Liquidation
• Disqualified director

Property Type: Residential 

• Experienced Landlords 
  First time landlords are acceptable, but the client cannot be a first-time property buyer

Property Type: Small HMOs

• Experienced Landlords
  First Time landlords are acceptable, but the client cannot be a first-time property buyer.

Property Type: Large HMOs

• Experienced Landlords
  12 months experience of managing a similar sized HMO or similar number of rooms managed across a number of HMOs
• First Time Landlords
  Not Applicable

Property Type: Ex-pats

• Experienced Landlords
  At least 1 UK investments properties for a minimum of 12 months and at least 1 applicant to have a minimum income of £50,000
• First Time Landlords
  Not Applicable

Property Type: Bridging Loans

• When the clients have completed a successful bridging loan with Shawbrook
• First Time Landlords
  Not Applicable

Property Type: Portfolio Landlords

• Experienced Landlords
  Successful track record of owing relevant properties in the same sector
• First Time Landlords
  Not Applicable

A Customer with four or more mortgaged buy to let properties either jointly or separately owned.

Enhanced checks are required in addition to the standard application requirements

Requirements & Assessment:

Portfolio Schedule

• Evaluation that the outside portfolio is geared no higher than 75% LTV
• Affordability check to ensure the portfolio can meet a stressed interest rate at 6.5% with a minimum 125% cover

Business Bank Statements

• Review rental streams and ensure enough cash flow is evidenced
• For Landlords with 4-9 properties, instead of requesting Bank Statements we may be able to verify cashflow
  automatically. If data is not available, then Business Bank Statements will be required

Assets and Liabilities Form

• Understanding of outside financial position

A customer with no more than 3 mortgaged properties either with Shawbrook or other borrowing entities.

Standard application requirements with no portfolio check required. If the credit search shows more mortgages than declared, an explanation as to why will be required.

Applications are acceptable from UK nationals residing in the UK and EU/EEA and other foreign nationals residing in the UK. Ex-pats (UK nationals living or working outside of the UK) are acceptable subject to expat experience criteria.

Applications from foreign nationals residing outside of the UK where there is no UK based joint applicant cannot be accepted.

Shawbrook uses an automated system for identity and address verification, if this fails or the applicant resides abroad, acceptable evidence will be required.

All customers must provide certified signature ID.

We will require the following to have independent legal advice:

• Customers over 70 years old
• A customer who will not benefit from the proceeds of the advance.
• A customer who is on the mortgage application but not named on the title

The loan must meet the minimum debt service cover ratios (DSCR) in order to confirm affordability. Please download the PDF version of our criteria guide for full details

Are acceptable if the property is a multi-unit block or large HMO and the DSCR is not met based on the received rental, we would like to understand how the client intends to service the loan before tenants are found.

Loan amounts will be calculated on an interest only basis although for borrowers who wish to have a C&I loan this can be accommodated subject to evidence of supporting income to cover the difference.

Top Slicing

• Acceptable to support purchases or refinance and capital raising in order to purchase another property.
• Not acceptable for capital raising for unsecured debt consolidation or to cover other personal expenditure (e.g., Car Purchase, Holiday, School fees, Gift to relative).
• All cases must meet a minimum standard ICR of 110%.
• An income and expenditure form must be completed.
• Portfolio Landlords- standard outside portfolio stress test to apply with any surplus added to income or shortfall deducted from income. This should be evidenced on SA302s/accounts and bank statements.

Acceptable Income

Basic annual salary.
Income from self-employment. Private or Company Pension, verified by P60
To be verified by SA302, Certified accounts, 3-months payslips in conjunction with bank statements to confirm

Expenses to be deducted

Credit commitments including all mortgages (which should be stressed), credit cards, finance agreements and loans.
Essential living costs – to include food, utilities, council tax, phone bills, ground rent, service charge, essential travel, and childcare.
The declared amounts should be checked against available sources such as bank statements and credit search data.

NB .Top Slicing is not acceptable in the following circumstances:

• On any Limited Edition products.
• Where the customer is a developer (Either an “out of the ground” developer or carrying out large scale conversations – e.g., converting an office into residential).
• For a portfolio landlord where they have more than 10 financed rental properties (both with Shawbrook and/or external Lenders).

Shawbrook must have 1st legal charge.

England, Scotland, Wales.

Freehold and Feuhold (in Scotland) acceptable.
Leasehold with minimum 50 years remaining at the end of the mortgage term is acceptable.

An assured shorthold tenancy agreement (AST) for a period of between 6 to 12 months is required. Protected tenancies are considered subject to demand for resale as confirmed by the valuer.

See also "Other" for Holiday Lets, Serviced Apartments and Airbnb and Local Authority and Vulnerable Tenants.

Unless stated differently below by asset type 75% LTV Interest Only is permitted on all security when sales are achievable within 12 months.

Unless stated differently below by asset type 75% LTV Interest Only) is permitted on all security when letting is achievable within 0-3 months

AST re-letting demand is classified as follows

Expected 0-3 months – 75% LTV Interest Only) is permitted unless stated differently by asset type.

Moderate 3-6 months - LTV reduced by 5% to 70% LTV
Weak 6+ months – Not acceptable.

Flats located within blocks are acceptable subject to usual criteria.

Multiple flats/entire blocks of flats can be considered. Please refer to Valuation Methodology section.

Individual flats within cladded blocks or entire cladded blocks of flats are unacceptable without a satisfactory EWS1 form.

Minimum size for flats is 30 square metres. When we are lending on blocks of flats, if the individual flats are less than 30 square metres, aggregated individual values cannot be used, only the investment block value can be used.

Acceptable up to 65% LTV in blocks up to 4 storeys subject to sales demand being achievable within 12 months.

Acceptable up to 65% LTV in a block of more than 4 storeys in Greater London subject to sales demand being achievable within 12 months.

Individual flats within cladded blocks or entire cladded blocks of flats are unacceptable without a satisfactory EWS1 form.

Acceptable to 75% LTV subject to sales demand being achievable within 12 months.

Small HMO defined as those having up to 6 Occupants maximum 75% LTV Interest Only subject to sales demand being achievable within 12 months.

Large HMO defined as those having greater than 6 Occupants maximum 75% LTV Interest Only subject to sales demand being achievable within 12 months.

Where the Valuer confirms an HMO Licence is required a valid HMO licence should be evidenced

• HMO Refinance. For a refinance within 6 months of the purchase date, if the issuing of the HMO licence has been delayed, the valuation report should confirm the property is a viable HMO and evidence is to be provided confirming the HMO Licence has been applied for.
• HMO Purchase. The valuation report must confirm the property is a viable HMO.

Small HMOs used for student accommodation are acceptable in line with HMO criteria. Student units and sui Generis HMOs are considered on a case by case basis.

• Cladded blocks without a satisfactory EWS1 form
• Freehold flats
• Land
• Development sites
• Hostels
• Equestrian centres
• Grade 1 Listed
• Grade A (Scotland)
• Kennels & Catteries
• Properties with no valid EPC rating or rating below E (unless exempt)
• Agricultural properties
• Contaminated land/buildings

The maximum amount of flying or creeping freehold that we can consider is 15%.

2nd charges are acceptable on residential property up to 70% LTV (Taking into account the 1st charge balance) with a minimum of £25,000 equity being attributed to the 2nd charge property; Subject to maximum loan of 100% of the lower of the value or purchase price of the 1st charge security.

• The customer owns additional neighbouring property which shares the same access way, rights of support and services as the security property (this would be common in terraced housing or neighbouring parcels of land). These subsequent charges to be registered on the neighbouring properties/land do not need to be first ranking charges.
  
  
• We are offered long leasehold security and the customer or a related company/person owns the freehold. In these cases a charge over the freehold is also required.

Acceptable subject to valuer commentary and terms of the lease arrangement (when solar panels owned by third party).

These can be considered on a case by case basis subject to evidence of implementation of a professional treatment plan with insurance backed guarantee.

Excessive grounds rents or ground rents that have steep step ups are unacceptable.

Shawbrook consider property postcode on a case by case basis being considerate to the customer Shawbrook and non-Shawbrook portfolio.

Shawbrook cannot consider applications that may be deemed as regulated transactions. These also include:

• The Customer intends to reside in the property taken as security and the residential element of the security (including associated land) forms more than 40% of the total floor area of the entire security (including land)
• Applications where our customer or a relative of the customer resides or has resided at the security in the last 12 months and intend to move back there in the future
• Ex-pat applications if the customer intends to move in to the security upon their return to the UK
• Applications when the current vendor will occupy the security after completion, and this equates to more than 40%
• HMO accommodation where a family member or the customer resides

Unacceptable. The following type of applications will be considered as consumer BTLs in line with the Mortgage Credit Directive Order:

• The client does not own any other BTL properties, and we are offered either a property inherited or the property they, or a related person, previously resided at.
• If the borrower is a first-time landlord and the transaction is a Let to Buy

• Any Prefabricated Reinforced Concrete (PRC) dwelling which has not been repaired under the PRC (Homes) Ltd licensed repair scheme is unacceptable
• Wimpey No-fines are acceptable, other no-fines systems are unacceptable
• Laing Easiform built after 1945 are acceptable
• Steel Framed Dwellings are acceptable if readily marketable and mortgageable
• Large Panel Systems (LPS) are unacceptable
• Timber Framed Dwellings built prior to 1970 are unacceptable, properties built after 1970 but without brick/rendered block external facings are considered on their individual merits
• Mundic properties are acceptable only if a Concrete Screening Test has been prepared strictly in accordance with the latest RICS Guidance and the concrete has been classified as A or A/B. Suspect concrete purpose-built and converted flats will not be considered acceptable, unless the entire block has been tested and the concrete classified as A or A/B
• Thatched roof properties considered on their individual merits

The following sustainable construction types are acceptable for buildings constructed 2010 or later:

• Structural Insulated Panels (SIPs)
• Insulated Concrete Formwork (ICF)
• ThermoPlan
• Kingspan TEK Haus
• Beco Wallform
• Cidark P3 System
• Durisol Block
• Rockwool Duo Slab
• Hemcrete/Hempcrete
• HufHaus

Suitable warranty documentation and architects sign off (including details of that architects PII) are required. Other modern/sustainable methods of construction can be considered on a case by case basis

• Single dwelling houses and flats only, multi-unit blocks of serviced apartments are not allowed
  
  
• Property must be in a location with a letting demand for an assumed 6-month AST, specialist holiday lets in remote locations where there is no long term tenant demand are unacceptable
  
  
• Assumed AST rental income will be used for affordability and viability of exit assessment

Acceptable subject to:

• Lease with a professional operator of emergency housing
• Lease that includes:
  • An open market rent with a standard rent review terms including rent review frequency
  • A prohibition on structural alterations
  • Standard landlord obligations 
    (Please note this list is non exhaustive and please refer to the broker hub for a fuller list of non-acceptable lease term issues.)
• Assumption of a standard AST from a private rented sector tenants for affordability and viability of exit assessment (as opposed to lease rental income)
• Property to be valued as a standard house or an HMO with no premium attributed to the lease
• A Commercial Valuation

Private tenants in receipt of Housing Benefit or Universal Credit are also acceptable

A Bank appointed valuation report addressed to the Bank from the pre-approved panel of surveyors with sufficient PI cover must be held or an Automated Valuation Model (AVM).

Valuations are valid for 6 months.

• Fellow of the Royal Institution of Chartered Surveyors (FRICS)
• Member of the Royal Institute of Chartered Surveyors (MRICS)

AVMs can be considered for security when the following standards are met:

• Single-unit residential property and small HMOs valued on a single dwelling basis
• If the purchase price is lower than the market valuation we can ignore the AVM confidence level and apply max LTV (70%) to the purchase price.
• Maximum value £2m in London and the South East, £1m elsewhere
• Maximum LTV and minimum confidence levels for capital value shall be in accordance with the section below
• England, Wales and Scotland
• No property above or adjoining commercial premises
• Freehold or minimum unexpired 85-years leasehold
• No converted flats
• Flats in blocks where no cladding is indicated
• No new-build property built within last 24 months
• Report is valid for 6 months

Max LTV:71 - 75%

• Minimum Confidence Levels (value): 4.6 > 5.0
• Minimum Confidence Levels (rental): 4.0

Max LTV: 65% - 70%

• Minimum Confidence Levels (value): 4.0 - 4.5
• Minimum Confidence Levels (rental): 4.0

Max LTV: 55% - 64%

• Minimum Confidence Levels (value): 3.0 - 3.9
• Minimum Confidence Levels (rental): 4.0

Max LTV: Up to 55%

• Minimum Confidence Levels (value): Min 3
• Minimum Confidence Levels (rental): 4.0

LTV calculated against the corresponding CL i.e. 4.9CL = 74% LTV. Rental Confidence between 4-4.5 require a second automated verification.

Security Type and What Values we use:

Single Residential Flat/House
Open Market Value confirmed by the surveyor or an AVM

Block of Flats (up to 10)
Individual values of the flats can be used on an aggregated basis subject to individual leaseholds sales demand being within 12months.

Block of Flats (11 and more)
Investment block value must be used.

Small HMO (up to 6 tenants)
If the property is being used as an HMO, but the works to convert it back to a single-family dwelling are minimal, then a single dwelling value based on direct comparable evidence will be used.

If the property has been extensively adapted to meet HMO legislation (e.g. changes to room sizes or added en-suite facilities) then valuer will reflect the premium element either by yield-based investment valuation or purchase price plus costs of works approach.

Small HMO (up to 6 tenants) in an Article 4 Direction area
Yield-based investment valuation: valuer will consider comparable yields in the area and gross rental. Given that Article 4 Direction is in place, the property must hold C4 planning use.

Large HMO (7 and more tenants)
​Yield-based investment valuation: valuer will consider comparable yields in the area and gross rental. Planning must be in place for the property to be used as a large HMO (Sui Generis).​