Summary of Limited Company Buy to Let Lending Criteria:
• We accept applications from Special Purpose Vehicles (SPVs) which have been set up for the purpose of BTL / residential property investment only. Other services or manufacturing are not acceptable. SPVs with commercial property/assets/loans are not acceptable.
• A company can be registered with one or more of the following SIC codes only
o 68100 - Buying and selling of own real estate.
o 68209 - Other letting & operating of own or leased real estate.
o 68320 - Management of real estate on a fee or contract basis.
• Acceptable historic SIC codes (pre-2003) that may be in place for older companies are:
o 7012 - Buying & selling of own real estate.
o 7020 - Letting of own property.
o 7032 – Management of real estate.
• The company must be registered in England, Wales or Scotland.
• Ownership of the company must be in personal names. Subsidiaries, parent companies, LLPs, Trusts and offshore structures are not acceptable.
• Newly established SPVs are acceptable from day 1 of being set up.
• All directors of the company, all shareholders with a shareholding of 20% or more and any shareholders funding the property deposit (irrespective of shareholding) must be party to the mortgage (the “applicants”).
• Up to 4 applicants are acceptable.
• All applicants must provide a joint and several personal guarantee for the full loan amount and will be required to take independent legal advice.
• Applicants, in aggregate, must have at least 75% of the company shares and voting rights.
• Any shareholders who are not applicants must have a family relationship to the applicants.
• At least one applicant should be an existing residential homeowner occupier, living in accommodation tied to their employment, or living with a partner.
• There is no minimum income requirement for applicants. However, at least one applicant must be able to demonstrate a primary income (Employed, Self Employed or Retirement Income).
• Income must be in Pounds sterling.
• Applications are accepted for rental properties in England, Wales and Scotland.
• The maximum loan to value for Limited Company Buy to Let is 80% (purchase or remortgage).
The following exceptions apply:
• New Build Houses – 75%
• New Build Flats – 70%
• First Time Landlords – 75%
• Maximum individual loan £500,000.
• The minimum property valuation is £50,000 (irrespective of location).
• Maximum portfolio size of 10 mortgaged rental properties (including this application), irrespective of lender. This includes mortgages, either separately or in aggregate, in the applicant’s names, the borrowing limited company or any other limited company where an applicant owns more than 20% of the shares.
• Maximum of 4 rental properties can be mortgaged with the Society, whether BTL, Holiday Let, HMO or a combination (maximum £2m value). This includes mortgages, either separately or in aggregate, in the applicant’s names, the borrowing limited company or any other limited company where an applicant owns more than 20% of the shares.
• The applicants can only have one company financed to the Society.
• The Society will take a first legal charge over the property on an all-monies basis.
• The property must be let on an Assured Shorthold Tenancy (AST) or equivalent basis. The tenancy agreement must be in the name of the company and tenant.
• The property must not be occupied by any of the directors, shareholders or a family member of the directors and shareholders.
• The property must have a maximum of 5 bedrooms.
• Up to 75% LTV the property must achieve a minimum EPC rating of ‘E’. Above 75% LTV the property must achieve an EPC rating of A to C.
• Studio flats not accepted.
• Holiday Let, HMO and Multi-unit blocks are not accepted.
• Capital & Interest and Interest Only repayment types are acceptable.
• Gifted deposits are not acceptable.
Please see the relevant Limited Company Buy to Let product pages or Assessment of Rental Income section for applicable interest stress rates.