Semi-Commercial: £150,000

Commercial: £150,000

Minimum 3 years - Maximum 12 years for interest only loans.

Maximum 12 years - Maximum 25 years for part or full capital repayment loans.

Interest only and capital repayment options are available

65% LTV Commercial Property

75% LTV Semi-Commercial Property

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 or 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.

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

As a minimum, a personal guarantee equal to 25% of the gross loan or £50,000 (whichever is higher and subject to a maximum 100% of the loan size) will be required from all directors where they have a shareholding of 25% or more.

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 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

Commercial and Semi commercial

• Ownership of a commercial investment property for a minimum of two years or owned and managed at least 2 Investment properties for the last 2 years.

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 two years and at least 1 applicant to have a minimum income of £50,000

Portfolio Landlords

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

The customers outside portfolio will be reviewed to assess long term affordability. A stress rate of 6.5% 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.

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.

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 as the residential part being greater than 50% of the total value of the site calculated by the higher of the MV or VP of the commercial elements. 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.

We only lend on properties with an A-E rating. Where the property is currently rated D or E,  the property owner will be asked to consider improvements to the property to raise the EPC rating to A-C as part of their ongoing maintenance.

Unless stated differently within this criteria document, the maximum LTV is permitted on all security when sales are achievable within 12 months. Please also note rental demand below when determining LTV.

Unless stated differently within this criteria document, the maximum LTV is permitted on all security when letting is achievable within 12 months. We expect the residential element demand for letting to be within 3 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.

Where the property value is in excess of £2m, a minimum EPC rating of C will be required.

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

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 and expected rental demand of 0-3 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 and expected rental demand of 0-3 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 and expected rental demand of 0-3 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.

• 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)
• Hotels
• Contaminated land/buildings

Commercial property owner occupied sites are defined as where the client or a direct family member occupies the property (OPCO PROPCO).

Whilst wholly owner occupied sites and trading business are not acceptable, part owner occupied sites can be considered subject to income from the investment element covering 100% DSCR.

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.

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 is to be based on the most recent trading 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.

Minimum loan size £300,000

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% of the total floor area of the entire security (including land). 
• 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)

Security Type and What Values we use:

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

Semi-commercial properties are defined as the residential part being greater than 50% of the total value of the site calculated by the higher of the MV or VP of the commercial elements. All other properties will be considered Commercial.

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).​