Individuals, Partnerships, Sole Traders, Limited Companies, LLPs, SIPPs and Pensions. For Corporate Customers, we will consider both UK and non-UK based (subject to certain conditions) corporate entities.
Under certain circumstances we may consider lending to executors of deceased estates, SIPPs, and other pension arrangements. Agreement to provide lending to these categories is on a case-by-case basis and will require enhanced underwriting.
If your client already has a loan with us and needs to borrow further monies, then we may be able to assist. Please call us to discuss the options.
We will consider affordability in a variety of ways. For serviced loans we will primarily focus on whether the applicants have the resources to be able to service the interest (we will need to see 6 months bank statements and 6 months’ payslips/SA302s).
Where an applicant has background investment properties we will undertake an assessment of affordability to ensure that the portfolio will not create an undue strain on the resources of the applicants.
Minimum age: 18
Maximum age: 70
We may consider lending beyond 70 where the exit will be via the sale of the property. Please refer to our underwriters.
We will consider applications from applicants whose primary employment is as an agency worker.
First Time Landlord (FTL): An applicant who has not owned a Buy to Let property in the last year.
Experienced Landlord: An applicant who has owned a Buy to Let property for at least the last year. Consumer Buy to Let (CBTL): An applicant with no other Buy to Let properties and who wishes to obtain a mortgage on a property that has either been inherited or has previously been occupied by the borrower or a related person.
• Up to a maximum of four applicants per application.
• First Time Buyers considered when they apply with an existing property owner.
• The vendor should not be related to 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.
We are unable to accept applications from applicants with the following characteristics:
– Criminal convictions (other than minor driving offences) where the conviction has not been spent – Disqualified company directors (unless the exit of the loan is via an asset sale) – Foreign nationals who have less than 2 year’s residency in the UK – Inter-family sales. – Payday loans within last 12 months – Sale and rent back transactions.
Where an applicant has had arrears on a credit commitment (whether secured or unsecured) within the last 3 years, we will require a satisfactory written explanation.
Asset and Liabilities Statement
We require an Asset and Liabilities Statement for all applications and will rely upon the information contained within it to form a judgement on the suitability of the applicant for credit purposes. The statement should be signed by all applicants/guarantors, or their accountant.
We consider applications for funding in support of purchases at auction. We will require sight of the auction pack.
Back to Back Sales
We do not usually lend where a back to back transaction has taken place within the six months immediately preceding the application. We will consider back to back transactions where the vendor is a reputable national builder and where the property has been taken in as a part exchange.
Applicants who are individuals must hold a UK bank account.
Corporate borrowers would ordinarily be expected to already hold a UK bank account unless the loan is a 3rd party security loan, in which case an account must be set up within 90 days of draw-down.
We do not lend where the applicants have a bankruptcy in their name unless the purpose of the loan is to annul the bankruptcy.
Our standard Bridging product where no works are being carried out, could be first or second charge.
Buy to Let
Where the security for the loan is a property which will be used as a Buy to Let, we will need to be satisfied that there will be an appetite to provide take-out finance by a cross-section of the BTL lender market. To do this, it is anticipated that the property will provide an acceptable Income Coverage Ratio (ICR) that meets typical requirements in the market. The construction will also need to be of an acceptable type and condition for onward lenders to accept.
Where the applicant owns investment property in the background which will not be security for the proposed loan, we will usually undertake an assessment of these properties to ensure that these do not pose a threat to the applicant’s overall financial position.
Capital Repayments (on Live Loans)
We will permit capital repayments, which must be for an amount of £25,000 (or more) and should be paid via the Borrowers’ solicitor and not directly to us.
Where the applicants have unsatisfied county court judgements, we will consider providing funds (not for credit repair purposes). The loan will be subject to enhanced underwriting and a satisfactory written explanation.
Change of Proposed Security (During the Application Process)
The proposed security is a fundamental part of the application. Consequently, where the proposed security changes, we will start the assessment process again and treat it as a wholly new application.
We treat these in line with our approach for other defaults. We do not allow any new defaults to have been registered in the nine months prior to application.
We will consider applications from applicants whose primary employment is as a contractor.
Credit File/Credit Report
We require a credit report for every applicant (where the application is in the name of a limited company a credit report will be required for all directors).
Our preferred provider is ‘Checkmyfile’. The applicants should obtain a copy of their file from this provider and this should be submitted no later than the point of application.
We expect that the details within this report corroborate the information provided elsewhere within the application.
Any application where an applicant has two (or more) satisfied CCJs, or any unsettled CCJs, will be classified as credit impaired, and will be subject to an enhanced level of scrutiny.
We do not credit score applications.
Debt consolidation is a term which generally relates to regulated activity. We do not undertake regulated lending.
However, also see “Re-bridge”.
Debt Management Plans
We will not ordinarily lend where one or more of the applicants is in a debt management plan.
We do not ordinarily permit defaults to have been registered within the nine months immediately prior to application. Where defaults do exist, and the firm agrees to consider lending, the application will be subject to enhanced scrutiny.
Deposit from a Foreign National
We will consider applications where the deposit monies are coming from a foreign national.
For applicants who reside in the EEA (European Economic Area) We will require bank statements for a three-month period and will expect the statements to show the money being held throughout this period. For applicants who reside outside the EEA, we will require bank statements for a six-month period and will expect the statements to show the money being held throughout this period.
Where works require planning permission or permitted development rights and more than five properties are being constructed. Building Control sign off will be required and there must be a JCT contract. Works will require full monitoring by a Project Monitoring Surveyor appointed by us, step in rights and 3rd party warranties.
We will not lend to applicants who have diplomatic immunity from UK law.
We lend to both employed and self-employed applicants and is also able to consider lending to those who meet their income needs from other sources, such as for example, investment income.
Ex Local Authority Houses
We do not differentiate between ex local authority houses and houses built by private builders (subject to the valuer making no negative comments).
We will only lend where an exit strategy has been provided. We will undertake an assessment of the plausibility of the strategy, but the applicants should not take our willingness to proceed to mean that we have endorsed their strategy. The success or otherwise of the exit strategy is wholly the responsibility of the borrower.
Where the security is an investment property and the exit will be via re-finance onto a long-term loan, the borrowing must be capable of meeting typical lending criteria and product parameters from lenders who are active in that market.
The borrower will be required to interact with our Portfolio Managers on a regular basis throughout the term of the loan and provide any information which is needed to support the ongoing viability of their intended exit strategy.
Where the loan is not repaid within the agreed term, the exit fee is 5% of the gross facility.
Exposure by Borrower
The maximum number of loans which may be held by any one borrower is four. Where top-up facilities are required for an existing loan, this will be counted as part of the existing loan and therefore is not included within this facility. For established borrowers who have built up a reputation for delivering timely redemptions with no events of default occurring, we may considering lending beyond this maximum – please discuss this with us.
Exposure by Development
The maximum number of securities which we will lend against on any development site is three (regardless of whether this is for the same borrower or for a range of unconnected borrowers).
Facility Letters are valid for 28 days after the Date of Offer (or such further period, if any, as is agreed by the Lender),
First Time Buyer
First Time Buyers considered when they apply with an existing property owner or when they already own a Buy to Let property
First Time Landlord
We will consider lending to first time landlords.
On flats with an external wall system (cladding), the Valuer/Solicitor will require sight of a valid and satisfactory EWS1 certificate.
Ex local Authority Flats within the M25: We lend on these ex local authority flats on the same terms and conditions as for privately build flats.
Ex local Authority Flats outside the M25: We will usually restrict the Loan to Value for these properties to 65%, although it has the capacity to exceed this on a case-by-case basis and where it considers that a compelling case to lend exists.
Foreign Nationals (Individuals)
We will lend to foreign nationals (individuals). Enhanced underwriting will apply.
The proposed borrower must have an ongoing relationship with their solicitor (which includes at least one previous transaction). We will not usually lend to foreign nationals who have only recently instructed their solicitor for the first time.
Guarantors and borrowers will ordinarily be represented by different law firms. With our agreement, it may occasionally be acceptable to allow different partners within the same firm to act.
Where the deposit is provided by way of gift, a gifted deposit letter must be provided (a template will be available from our solicitors during the application process). This must confirm:
- the donor’s full name and address.
- their relationship to the applicant.
- the reason for the gift and the amount to be gifted.
- that the donor is solvent.
- that the donor understands that they will have no interest in the property.
- that they are aware that the property is being purchased for investment purposes (i.e. it will not be the domestic residence of the applicant).
We have the capacity to structure its loans on a case by case basis. In addition, we can provide bespoke pricing.
This will be determined by the underwriting team, who will consider a range of factors.
Where works require planning permission or permitted development rights and more than one property is being constructed. Building Control sign off will be required and there must be a JCT contract. Works will require full monitoring by a Project Monitoring Surveyor appointed by us.
Help to Buy
We do not lend under the Help to Buy scheme.
HMO (House in Multiple Occupation)
- The applicant(s) will usually be expected to own one or more HMOs, owned for at least 12 months.
- Minimum valuations: £250,000 London (within M25) £150,000 other locations.
- Maximum number of beds; 6 for refurbishment properties and 6 for a standard bridge.
- Licensed (or in the case of refurbishment HMO, application submitted).
We will consider HMO applications which do not meet these parameters, where a persuasive case can be made for lending.
HMO’s that are already successfully trading may be valued on an investment basis. Properties which are empty will be valued by reference to GDV but the firm may elect to use a bricks and mortar figure.
Income (Minimum Income)
We do not set a minimum income for applications.
Income Coverage Ratio (Buy to Let)
We do not set a minimum Income Coverage Ratio (ICR) for BTL lending, but its underwriters will consider the ICR with regards to the proposed exist strategy. Where exit is by way of a sale into the investor market, or by re-mortgage to a term lender on an investment basis, it will be important to ascertain whether there is a realistic prospect of the security being attractive to term lenders at the maximum normal LTVs for that type of lending.
Individual Voluntary Arrangements (IVAs)
We do not lend to applicants who are currently in an IVA.
For those who have ended the IVA, we have no minimum qualifying period where the exit is by way of sale. Where exit will be by way of refinance, we will not lend until 3 years have elapsed since the IVA was completed.
See “Repayment Methods”.
We accept business introduced via intermediaries. New intermediaries should contact our sales team in the first instance who will outline the process for registering, together with the criteria which applies.
We require that brokers have the relevant FCA Credit Broker Permissions.
The Lenders’ interest is to be noted on the insurance policy.
We will consider applications from applicants whose income is partially or wholly derived from investments. Proof of the underlying investment and a track record of drawings will be required in support of the application.
Know Your Customer (KYC) – Acceptable Documents
The following items will be required to meet the firm’s KYC requirements:
A completed and signed application form.
2 x recent utility bills (for each applicant) dated within the last 3 months.
A copy of either a Passport or a UK Driving Licence.
We do not usually end on land where we will not also be funding the development works.
We do not generally undertake landlord referencing but reserves the right to do so.
We will always require sight of the leasehold pack.
We will ordinarily expect that leasehold properties have at least 70 years remaining on the lease. By exception, we may agree to lend against security with an unexpired lease term of less than 70 years. Where this is agreed, we will require:
- Confirmation that the valuer has valued the security based on the impaired term, and
- The value of the security if the term is extended to at least 70 years, and
- If the Customer owns both the Freehold and Leasehold a charge is to be executed over both when possible, and
- If a purchase, confirmation that the vendor has commenced extension proceedings to such extent that it will be possible for our client to be able to immediately continue the lease extension process following purchase.
We may seek to reflect the impaired marketability via the pricing and/or terms and conditions of the proposed deal.
The applicants will be responsible for meeting the costs of any legal work undertaken relating to their loan.
We lend throughout mainland England and Wales. We also lend on the Isle of Wight.
Let to Buy
Where an applicant has previously engaged in let to buy activities, care will be taken to ensure that the subject property is not going to be utilised as the principle domestic residence of the applicant(s).
This is the simplest of our refurbishment categories. It will generally apply to scenarios where the development component is <£50,000, and typically will not require any planning or structural works. Works will be overseen by our Asset Manager and photo evidence may be required to monitor works.
The following criteria applies:
- A debenture is required (where there is no pre-existing debenture).
- Pre-existing debentures will require a letter of non-crystallisation.
We will consider lending for any legal business purpose. We may also consider lending in other (non-regulated) circumstances via our exceptions policy.
Loans over £500,000
We expect that the borrower will own their own home.
Maximum Loan Size
£5m for all loans other than:
£3m for Development loans and auction purchases
Larger amounts may be agreed by exception and subject to satisfactory enhanced scrutiny.
Where works may require planning permission or permitted development rights and no more than one property is being constructed or structural works are being carried out. Building Control sign off will be required and there may be a JCT contract. Works will require light touch monitoring by a Project Monitoring Surveyor appointed by us.
Minimum and Maximum Age of Borrowers
The minimum age for any transaction type is 18. The maximum age is 70 (other than where exit is via sale).
Minimum Loan Size
Our minimum loan size is £75,000.
We provides finance for new build development projects
Number of Applicants
The maximum number of borrowers on any one individual loan is four
- We will instruct a law firm, qualified in the jurisdiction of the Customer, to provide a Legal Opinion Letter.
- Law firm to hold/provide evidence of their Professional Indemnity Insurance.
Overseas Personal Applicants
We will consider applications from overseas applicants.
For applicants who reside in the EEA (European Economic Area) we will require bank statements for a three-month period. For applicants who reside outside the EEA, we will require bank statements for a six-month period.
Our loans are not portable. We are happy to consider a new loan for existing borrowers, subject to a new appraisal of their circumstances. Different terms and conditions may apply.
Where the applicant has a background portfolio, we reserve the right to carry out an assessment of the portfolio to ensure that this is not placing an unreasonable financial strain on the applicants.
Portfolio Management/Post Completion Matters
Immediately prior to draw-down, one of our Portfolio Managers will hold a pre-completion conversation with the applicant(s). Draw-down will not occur until this call has taken place.
The loan will be managed and monitored by our Portfolio Managers following drawdown. The borrower is expected to positively interact with our team.
This is bridging which is neither development nor refurbishment, and where the security is located within the M25 motorway. It is expected that the security will be in a well-established ‘prime’ postcode.
We will consider lending in a private sale scenario. This must be disclosed to us at the outset, and the valuer and the solicitor must be made aware of this.
See ‘Types of Business’.
The maximum number of securities that we will lend against on any one development is three.
We provide loans to property developers.
Properties which need to be Referred
- Flats in blocks exceeding 20 storeys.
- Grade 2 listed.
- Leasehold flats where less than 70 years remaining on the lease.
- Non-habitable security.
- Trading assets.
Property Value – Min and Max
We do not set a minimum or a maximum purchase price. Please note that we set a minimum purchase price for HMO lending. The minimum within the M25 motorway is £250,000 and outside the M25 it is £125,000.
Refurbishment of Properties
We provide funding for refurbishment of properties and will require the following:
- Schedule of works including costing will be required to contain a development timeline and cash flow.
- We need to have sight and satisfaction of the Contractor/contract being used including Contractor CV.
- Structural or ‘heavy’ refurbishment to be subject to our appointed Project Monitoring Surveyor.
- Where the Borrower is self-funding 100% of the build costs to finish the project, we will require evidence that the Borrower has the funds available to meet these costs and from their own resources.
- We need to have sight and satisfaction of the Building Warranty e.g. NHBC warranty.
- We need to have sight and satisfaction of any relevant planning requirements including approved plans and relevant investigation / site reports.
- We will not ordinarily fund beyond the build of 8 detached units and/or 12 flats per development (but may agree more than this on a case-by-case basis).
Where we undertake a re-bridge, it expects that the risk will be improved relative to the original loan from the previous provider of finance. Ordinarily this will mean that the loan balance will not increase, but where risk can be reduced by other changes to parameters, it may be permissible to increase the overall indebtedness.
Although the position will be expected to be improved to allow a re-bridge to take-place, we will generally match or increase the pricing relative to the original pricing, which is reflective of the fact that typically re-bridges contain an additional component of risk.
Release of Security
We do not usually permit partial releases of security.
All of our lending is interest only. Amortisation lending is not undertaken.
Loans will be:
- Interest deducted on completion from the agreed advance amount, or
- Serviced monthly (with payments being made on an Interest Only basis)
This will be confirmed within the Facility Letter.
NB Interest will not be rolled up and added to the agreed advance and then deducted. E.g. if a 70% LTV loan is agreed then the interest will be deducted from this amount.
We will consider applications where the applicant has been repossessed. Refer to underwriter.
We will consider properties with restricted covenants but may seek to address any impact on marketability via pricing and LTV restrictions. Please contact us to discuss the details.
We provide second charge loans. The following criteria applies:
- We will not take a second charge behind an existing bridging loan with another lender.
- The primary lender must be a member of UK Finance (the trade body which replaced the CML).
- The existing 1st Charge mortgage must have 5 or more years remaining on its term
- Where the performance of the 1st Charge mortgage cannot be evidenced from the credit search, the most recent mortgage statement will be required, and this must show no evidence of either arrears or an arrangement having been made to pay a reduced monthly amount.
Section 106 Agreements
There are a variety of reasons why a Section 106 agreement might be in force. It will not always be identifiable at underwriting stage but where it is, the impact will be considered, and the valuer will be informed.
The conveyancer should ascertain any S106 implications and advise the firm. Where information is provided, this should be reviewed.
Secured Loan Arrears/Mortgage Arrears
Applicants should not be in arrears on secured borrowing at the point of application. By exception, we may consider applications from applicants who are in arears. Cases with a compelling rationale and a satisfactory explanation should be referred to our underwriters.
Security Documents – Execution
All security documents must be executed in the presence of the solicitor acting in the transaction.
We provide funding to self-employed people. Proof of income will be required either by way of accountant-prepared accounts together with tax calculations, or via a download of the applicant’s tax calculations using their online personal tax account. Where information comes via an accountant, we will expect the accountant to hold relevant professional qualifications.
Semi-commercial properties are defined as properties that are mixed use i.e. a combination of residential and commercial.
Separate Legal Representation
We require separate legal representation in all lending transactions. We operate a small panel of solicitors who will act for the firm, and the applicants must instruct solicitors of their own choice.
Ordinarily the solicitors acting for the applicant will be expected to be situated in close geographic proximity to the applicant (within a radius of 25 miles) or be able to demonstrate a historic transactional relationship with them (i.e. it won’t be acceptable for the proposed transaction to be the first time that the solicitors have acted for the clients).
We require that the firm acting for the applicant will have a minimum of two SRA registered solicitors within the firm.
Where security is being provided by a third party, the third party must be represented by a different firm to the firm representing the applicants.
Source of Deposit
Our solicitor will be required to see evidence and source of the deposit monies.
We require sight of any tenancy agreement (or lease) which applies to the security.
Term – Minimum and Maximum
The minimum term (for any category of lending) is 3 months (unless agreed otherwise on a case-by-case basis).
The maximum for straight-forward bridging or re-bridging loans, or 2nd charge loans is 12 months. The maximum for refurbishment loans (light medium or heavy) or Development loans is 18 months.
Third Party Charges
We will consider third party charges provided that the party providing the charge is separately advised and represented, and typically will also be a party to the loan.
We will consider applicants whose main income is trust income. Proof will be
Types of Business
We lend on the following: bridging; re-bridging; 2nd charges; auction finance; light, medium and heavy refurbishment.
- Mortgage Brokers/Intermediaries or those individuals connected to corporate entities.
- Back- to- back transactions (We may consider these where a strong rationale exists, and subject to enhanced due diligence).
- Individuals who have been convicted or charged with any offence, other than for driving offences (we may consider applications where the offence is very historic and where there is a satisfactory explanation).
- Individuals who have been disqualified by a court from acting as a company director.
- Individuals who have been made bankrupt or been the subject of an IVA (potentially acceptable if the exit is a sale).
- Individuals who have been subject to any regulatory investigation or sanction.
- Non-arm’s length transactions.
- Options unless registered at Land Registry.
- Powers of Attorney.
- Sale and leasebacks.
- Charities (We may occasionally consider registered charities at a low loan to value, and where it can be satisfied that no reputational risk exists).
- Social/religious organisations.
- A customer or guarantor whose previous financial track record or personal background is (in our opinion) questionable.
Unacceptable Property Type/Security
We will not accept the following types of security (unless additional security is provided, and that additional security is the primary security for the loan):
- Active religious buildings.
- Any property of modern method construction and Easiform construction (unless our valuer can state that there is a ready re-sale market with normal demand existing, and that there is a plentiful supply of mortgage lenders who will lend against it).
- Trading care/nursing homes.
- Mobile home/caravan or house boat.
- Contaminated land.
- Equestrian centres.
- Sports stadia.
- Golf clubs & leisure parks.
- Petrol stations.
- Trading pubs, hotels and B&Bs.
- Grade I listed properties.
- Kennels & catteries without onsite residential accommodation.
- Land – where We will not be funding the development works
- Live/Operational work units (i.e. used as living quarters and work accommodation).
- Properties in areas affected by landslip or heave.
- Properties occupied by family members or related parties of individual Customers or regulated tenancies (this may be acceptable if our loan is a 2nd Charge).
- Properties when planning permission is required and will have less than 1 year before expiration.
- Properties with agricultural classification.
- Properties with Japanese Knotweed unless Certificate of Treatment is provided.
- Property affected by overriding interest.
- Property identified as having onerous restrictions or covenants.
- Property outside England and Wales.
- Property with restrictions regarding occupancy.
- Residential and commercial property with protected tenants.
- Unlicensed housing of multiple occupancy (unless there is a licensing application pending, or the security does not need to be licensed according to the requirements of the local authority in which the property is situated).
- Unregistered land.
- Properties where the Energy Performance Certificate rating is category F or G, unless the purpose of the loan is to improve the property so that a better rating can be obtained.
- Commonhold security property.
In addition to the above, we will ordinarily not lend on the following (but may on occasion consider it):
- Concrete construction (e.g. high alumina cement construction), timber or steel frame construction (except new builds).
- Industrial premises (including warehouse units).
- Land without planning.
- Properties situated near pylons, railway tracks or landfill sites.
- Properties within influencing distance of any significant factor that would have a negative impact.
- Properties less than 10 years old without guarantees, certificates, or appropriate insurance.
- Single purpose commercial property with limited marketability.
- Freehold flats cannot be considered (unless conversion to an acceptable leasehold will be undertaken simultaneously with completion of our loan).
- We usually require a physical valuation of the property and will instruct a valuer from our panel. The applicant will be responsible for meeting the costs and fees in respect it this.
- Valuations will always be instructed by us. It will not be acceptable to rely upon a valuation which has been instructed by a third party.
- We do not ordinarily provide free-valuations. The applicants will be responsible for meeting the costs of any valuation undertaken relating to their loan.
- The Loan to Value will be assessed against the reported 180-day vacant possession value.
- Where the borrowing is £2m or greater (or is to fund a completed development) we reserve the right to require two valuations. Where two valuations of differing values are received, we will ordinarily take an average of the two.
- A valuation is valid for 3 months, after which it must be refreshed (at the borrower’s expense) before (additional) monies can be lent against it. Where a refreshment is needed, this will be via a communication with the valuer, who will be asked to confirm in writing that the report may be relied upon for a further period (which must be specified).
- We require that comparables will always be provided with each valuation. The valuer will be required to provide these in accordance with any Red Book requirements.
- For flats on sizeable developments, we would ordinarily expect that at least one comparable relates to the same development as the proposed security.
- We anticipate that comparables will ordinarily relate to recent transactions (i.e. not properties still being marketed) and that they will be located within a reasonable distance of the property. Only valuations of properties which are highly unusual should rely on comparables from further away.