£40,000

Minimum 2 years.

Maximum 25 years. 

75%

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.

The maximum loan is calculated against the lower of the purchase price and valuation. (See valuation methodology for clarity on what value is to be used).

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.

Can be considered when we lend no more than 75% of the value and 90% of purchase price. The minimum portfolio value should exceed £1.25m

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 at the start of the mortgage and the youngest applicant must be no older than 80 years of age at the end of the mortgage term. Applicants older than 80 years at the end of the mortgage term should have a clear succession plan in place.

• 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

As a minimum, a personal guarantee equal to 25% or £50,000 (whichever is higher) of the loan size will be required from all directors where they have 25% or more shareholding.

For Complex Commercial loans a personal guarantee equal to 100% of the loan size will be required.

• 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

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)

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

Commercial and Semi commercial

• 1 BTL owned for 1 year+ AND FRI lease in place with 2 or more years to run before break/expiry AND single commercial tenant
  OR
  2 years relevant sector experience. If unclear, client interview to understand plan to manage the property

Serviced offices or multi-let units on licences, Vacant commercial

• 2 years relevant sector experience supported by client interview to understand plan to manage the property 

Ex-pats

• At least 2 UK investments properties for a minimum of 12 months and at least 1 applicant to have a minimum income of £50,000

Portfolio Landlords

• Successful track record of owing relevant properties in the same sector

The customers outside portfolio will be reviewed to assess long term affordability. A stress rate of 5.5% will be applied and the rental must cover a minimum of 125%. The overall gearing of the outside portfolio must not be over 75%.

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.

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

Where the property is part or fully vacant on completion, the borrower must evidence sufficient outside income to meet the loan payments.

If the property is to be let to multiple tenants on licences and there is no trading history available, net market rent is used to calculate affordability. However, it will be a requirement that enough units are let on completion to generate sufficient income to cover the loan payments.

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

Should the rental income from the security provide less than the required minimum ICR then outside income can be used to support ICR requirements. The use of outside income is subject to a minimum 110% ICR being received from the property

Acceptable Proof of Income is required together with an asset and liability statement and an Income and expenditure statement.

For portfolio landlords we will sense check that the income top up has not been used on other loans within the portfolio to avoid double counting.

When assessing expenditure, the following is deducted from the net income position:

• Credit commitments – this should include all mortgages (which should be stressed accordingly), credit cards, finance agreements and loans. The declared amounts should be checked against
  available sources such as bank statements and credit search data
• Essential living costs – to include food, utilities, council tax, phone bills, ground rent, service charge, essential travel and childcare. These should be declared by the borrower in their I&E
• Other committed expenditure – such as school fees, child maintenance

Shawbrook must have 1st legal charge.

Commercial and Semi-commercial property let or intended to be let third parties are acceptable.

For semi-commercial properties the residential element is to be self-contained unless one occupant occupies the whole security.

Semi-commercial properties are defined the residential part being greater than 50% of the total value of the site. All other properties will be considered Commercial.

England, Scotland, Wales.

Freehold and Feuhold (in Scotland) acceptable.

Leasehold with minimum 50 years remaining at the end of the mortgage term is acceptable.

Unless stated differently within this criteria, 75% LTV Interest Only is permitted on all security when sales
are achievable within 12 months.

Unless stated differently within this criteria, 75% LTV Interest Only is permitted on all security when
letting is achievable within 12 months.

An acceptable commercial lease should be in place for all tenanted commercial investment property.

Licences are acceptable for multi-let commercial property subject to the customer having the required experience.

Semi-commercial blocks with multiple flats above can be considered subject to usual criteria.

Blocks over 5 storeys must have a lift and cladded blocks are unacceptable.

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.

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.

Refinances - All HMO refinances will be subject to the customer having an HMO licence (when a licence is applicable) or where recent works have been completed the property being confirmed as viable for an HMO licence by the valuer.

Purchases - All HMO purchases will be subject to the Valuation report confirming the property is a viable HMO.

• Agricultural Properties/land
• Equestrian Centres
• Grade 1 Listed/Grade A (Scotland)
• Kennels & Catteries
• Places of worship
• Amusement Arcades
• Petrol /Ex-Petrol stations
• Car Showrooms
• Gymnasiums
• Land
• Religious meeting places
• Caravan sites
• Fishing lakes
• Holiday lets in holiday/sports parks
• Nightclubs
• Shopping Centres
• Casino’s
• Football /Sports Clubs
• Holiday parks
• Nursing/care homes
• Social clubs
• Cladded blocks of flats or individual flat in cladded blocks
• Development sites
• Freehold flats
• Hostels
• Offices used by religious groups
• Educational facilities
• Golf clubs
• Waste transfer sites
• Pubs
• Properties with no valid EPC rating or rating below E (unless exempt)

When the client or a direct family member occupy the property, we can consider as commercial Investment basis. (Interest only available)

The latest Accounts from the Operating Company should show a profit after deductions and addbacks. These should reflect the rental that is paid between the two parties and be in line with market rental.  The accounts assessment to be on the most recent trading performance and not blended over a 2-year period as this may reflect a pre Covid performance. Consideration to be given to the sector and if the performance is sustainable.

A formal lease is required to be in place at completion. Licences and short term lets are not acceptable. A copy of the commercial lease between the two parties will be required with passing rent being in line with market rent confirmed by the surveyor.

The property value will be considered on a Vacant possession basis with reletting and resale demand within 12 months being required.

We require, as a minimum, the provision of 12 months trading accounts to support the application.  The applicant must have a minimum 2-year trading history.

70% LTV IO, 75% with 5% amortisation max 5 years

Minimum loan size £300,000

We cannot consider lending on

• Retail units
• Public Houses

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

When taking 1st charge Commercial or Semi Commercial security, 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.

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 at the security at the point of completion; or where they have 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

• 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

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

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) if the AVM criteria is met. 

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
• 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
• Security shall not be a flat in a converted building
• Flats in blocks up to 4 storeys (for flats in blocks of more than 4 storeys a full valuation report is required
• No new-build property built within last 24 months
• Report is valid for 6 months

Max LTV: 75%

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

Max LTV: 65% - 74%

• Minimum Confidence Levels (value): 4.0 - 4.9
• 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 4-4.9 require a second automated verification.

Security Type and What Values we use:

Commercial and Semi-Commercial Property
The lower of Market value (MV) or Vacant Possession (VP) value

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 12 months.

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).​

New Lending & Product Switches

• Where a customer requests any additional lending or a fundamental change to product, this will not be considered until they have completed their payment holiday and made at least two
  subsequent payments in full after the holiday expired
• If a customer does not wish to wait until the end of the agreed payment holiday and are only part way through, they will need to cancel the payment holiday and make up any payments that
  have been deferred before we can consider any additional lending
• They must also evidence sustainability of income during the holiday period via bank statements/up to date proof of income. Until this is provided, we cannot proceed or consider an
  application
• Where a customer is requesting both additional lending and a payment holiday, they will need to select one of these options only – not both

If the client has requested a payment holiday from another lender, we can still consider lending to them if we are satisfied with their reasons for needing the payment holiday and the below requirements are
met:-

• Clear CAIS/Insight data confirming no late payments and that the accounts have been performing as agreed with the current lender
• If a payment holiday with another lender is in place, or has been previously, we will not require them to make up payments to the other lender
• If there were any receipt of rentals during the payment holiday, we would require bank statements to support the build-up of cash reserves and evidence acceptable levels of voids. We understand that clients entered into payment holidays for various reasons in order to support their property portfolio
• Standard portfolio assessment / stressing via eTech and due diligence needs to meet our standard criteria
• Where other lenders are incorrectly reporting arrears on genuine holiday payments, we will need evidence of the error and that the customer is in an agreed payment holiday. The evidence must be supplied from the lender to confirm this