The Application

Rental income

The rental income must cover at least 160% of the monthly interest part of your mortgage payment.

  • We currently calculate this as 4.25% on an interest-only basis
  • The rental income is based on your estimate, subject to confirmation from the valuer. The valuer will assess the rental income based on a family dwelling for an unfurnished property
Buy to Let products

Please note:
  • Two year Buy to Let products are available for straight like for like remortgages
  • Five year Buy to Let products are available for purchase and other remortgage applications

Maximum loan: £500,000 per property

Maximum LTV: 75%, inclusive of fees

Maximum term: 35 years

Maximum number of properties

  • Your client can have up to 10 Buy to Let properties with The Nottingham, for a combined total of £1,500,000 (max £500,000 per property). We will look for the property portfolio with the Nottingham to be built up over time, where a track record of account performance can be evidenced as the portfolio size increases. Please speak to your BDM to discuss multiple BTL scenarios before submitting applications. 
  • Total lending with The Nottingham (including residential mortgage) cannot exceed £1,500,000.

The deposit

  • The applicant/s own deposit or a gift from family is acceptable (providing the person making the gift is not occupying the property)
  • We do not accept builders' incentives/deposits.

Buy to Let definitions

  • MCOB regulated BTL (e.g. letting property to family members): we do not lend on these scenarios
  • Consumer Buy to Let (CBTL): CBTL will apply to remortgage applicants who don’t own any other let properties and either:
    • wish to let their current residence while purchasing a new residency (known as Let to Buy)
    • have inherited the property and wish to let it
    • have themselves, or a close relative, previously resided in the property, and now wish to let it.
  • Investment Property Loans (IPL): IPL will apply to anyone either:
    • purchasing a property specifically to let
    • remortgaging an existing rental property.

Note: All advisers submitting a CBTL application will need to hold the relevant CBTL FCA permissions in addition to their normal mortgage permissions.

The way we assess BTL cases, and the choice of products on offer, will be the same for both CBTL and IPL.

Portfolio landlord applications

  • Where the total number of properties (excluding Limited Company BTLs) at the application level, including the property to be mortgaged, is four or more, the application is considered to be a Portfolio Landlord application.
  • For Portfolio Landlords, a fully completed Assets and Liabilities form must be provided which includes details of their background portfolio and business plan. The business plan must show that the Portfolio Landlord:
    • has at least 3 years’ experience in managing investment property
    • HMO properties are no more than 25% of the portfolio
    • has considered the ongoing and future management of the portfolio including professional and management fees.  
  • Portfolio Landlord applications must meet the following additional criteria:
 Maximum LTV for the portfolio           75% LTV          
Maximum customers BTL portfolio size           10 BTL properties          
  • The overall portfolio must be evidenced as self-supporting by applying an ICR calculation to the aggregate (including unencumbered properties and the property to be mortgages) portfolio totals. The total rental income derived from the portfolio must cover the total portfolio mortgage commitment based on the following assumptions:
Minimum interest coverage ratio                160%               
Assumed stressed interest rate 4.25%

The Applicant(s)

Minimum age: 25

Maximum age: 75 (at end of the mortgage term)

Number of applicants: Maximum 4

Residency and property ownership:

  • The applicant(s) must currently own and occupy their own property in the UK.
  • The applicant/s must have resided in the UK for the past 2 years. HM Armed Forces personnel who have been temporarily stationed abroad are deemed to have been resident in the UK during their period of overseas deployment. In the case of Foreign Nationals, the applicants/s must have permanent rights to reside in the UK and be able to evidence this. We do not accept applicant/s on working Visas.
  • Applicants who own multiple BTL properties will be required to complete an Assets and Liabilities form.

Useful sources of information for BTL applicants

The National Landlords Association (NLA)
The Residential Landlords Association (RLA)
The Association of Residential Lettings Agents (ARLA)

Income

  • The annual income for the main earner must be at least £25,000, or if below this figure, we will accept a combined income for joint applicants of £40,000.
  • A maximum of two borrowers’ incomes can be assessed.
  • We will assess basic pensionable salary plus 50% of any overtime/bonus/commission. These must be paid monthly/quarterly and evidenced on the pay slips.
  • Pension Income is acceptable as part of the £25,000 income requirement.
  • We will not assess other unearned or foreign sources of income
Employed

At the time of the application, the minimum length of time in current job is 6 months, as at the date of application. We may consider 3 months in the current job, providing same occupation, no employment gaps and no probationary period.

Probationary periods are accepted for professional applicants provided they have completed a minimum of 3 months in their new employment at the date of application and had at least 6 months continuous employment in the same occupation immediately prior.

Employees on a fixed-term contract with a minimum of 6 months until expiry are acceptable, provided they are professionals and have worked in the same profession for a minimum of 24 months. (i.e. acceptable industries in this category include the NHS, IT and professional sports people, while unacceptable includes unskilled, manual or clerical workers).

Temporary/agency/zero hour contract workers are not acceptable.

Maternity leave

We will consider applicants on maternity leave and will assess the return to work salary. Please provide us with:
  • The last payslip prior to maternity leave starting, showing the full-time salary
  • The applicant/s will need to confirm the following information in writing:
    • The intended return to work date
    • Whether they will be returning to work full or part time and the pro rata salary as applicable
    • Full details of maternity leave pay i.e.: how many weeks left at full pay, half pay and SMP
    • What savings provisions they have in place to support the mortgage whilst on reduced pay
    • What childcare costs (if any) will be payable when they return to work
Self-employed

Applicants are treated as self-employed where they are a sole trader or are in a business partnership or where they own 25% or more shares in a limited company.

We don’t normally require sight of accounts, unless specifically requested by an underwriter. We prefer to send a reference to the applicant’s suitably qualified accountant. Acceptable qualifications are; AAPA, FAPA, ACMA, FCMA, ACA, FCA, ACCA, CA, CPFA and FCCA.

The applicant’s latest year’s share in profits will be assessed, or salary and dividends for limited company directors. The latest year’s accounts must not be more than 12 months old. We would normally like the applicant to have 3 years’ trading figures, although our minimum requirement is 2 full years’ trading figures, plus a projection based on at least 6 months’ trading for the third year. We will assess the latest full year's figures, subject to income fluctuating by no more than 20% year on year. The accountant will need to provide a satisfactory reference/explanation and at least a 6 month projection.

Where no suitably qualified accountant is available, we will use a minimum of 3 years of SA302s, when provided together with the corresponding HMRC Tax Overview to show that the tax due has been paid in full. Each SA302 and Tax Year overview must relate to a full 12-month trading period.

The Buy to Let property

Acceptable properties
  • The property must be valued at more than £70,000
  • The property must be in England or Wales
  • Maximum 4 bedrooms
  • The property must be let on an Assured Shorthold Tenancy (AST) renewable at no more than 12-monthly intervals and no less than 6-monthly intervals
  • All tenants must be named on the one AST
  • Maximum 4 tenants
  • The property will be valued as a single family dwelling for rental purposes
  • The buy to let property to be mortgaged must have an EPC rating of E or higher dated in the last 10 years
  • Property must be of traditional construction with brick or stone walls with pitched slate or tile roof
  • Properties can be clad in; traditional bricks or stone, brick slips, metal (zinc, copper, aluminum or steel), modern render system (cement, line, acrylic or silicone)
  • Modern timber frame or oak frame
  • Modern steel frame
  • Structurally Insulated Panel Systems (SIPS)
  • Insulated Concrete Formwork (ICF)
  • Wimpey ‘no fines’ and Easy Form can be considered subject to a satisfactory valuation
  • Flat roofs are acceptable subject to a minimum of a 25 year insurance backed guarantee
  • New build houses are acceptable up to 90% LTV (we do not accept builders’ deposits)
  • New Build Warranties - we accept NHBC, Premier Guarantee, BLP, Buildzone, LABC, The Q Policy, Protek and ICW. Other warranty policies are not acceptable
  • Solar panels – houses fitted with solar panels are acceptable, provided that adequate insurance is in place to cover any damage caused to the property by the solar panels
  • For remortgage applications on houses with solar panels fitted under a lease agreement, please note that our ‘free legal service’ is not available
Unacceptable properties

We do not lend on:

  • Property intended for occupancy by a person(s) related to the applicant
  • BTL flats, maisonettes and apartments
  • Properties converted into bedsits with shared kitchen and bathroom facilities
  • Properties that require a mandatory Houses of Multiple Occupancy (HMO) licence, or that are in a neighbourhood that are predominantly HMO licenced properties (we advise applicants/advisers to check with the relevant local authority whether the property is likely to require an HMO licence prior to submitting an application)
  • Property let to students, local authority tenants, or persons with diplomatic immunity
  • Property intended for sub-letting (e.g. the applicant lets the property to the local authority who in turn offers the property for social housing)
  • Commercial properties
  • Properties that are not in a lettable condition
  • Remortgaged properties that have been owned for less than six months at the time of application
  • Purchases – properties that the vendor has owned for less than 6 months (i.e. sub sales and back-to-back transactions)
  • Properties where the applicant is buying in their personal name from their own limited company 
  • Sale and rent back scenarios and distressed sales, including remortgages where the original vendor is currently residing in the property
  • Properties being purchased from or connected with a Property Club
  • Pre-fabricated properties
  • Steel framed properties (only Modern steel frame acceptable)
  • Timber framed properties with timber cladding
  • Straw bale, Hempcrete, Volumetric construction
  • Mobile home/houseboat
  • Unacceptable roof types: Sedum (living green)
  • Any construction covered by Housing Defect legislation, such as high alumina cement; prefabricated reinforced concrete; large panel system
  • Second homes/holiday homes

The Let-to-Buy property

If your client is remortgaging their current residential home onto a LTB basis with us, we will need to see a copy of their new residential mortgage offer on the property they are buying, if the residential property is being purchased with cash we will require to see the memorandum of sale and will require full details of the purchase.

Repayment methods

Your client can apply for a mortgage on a wholly repayment, wholly interest-only or part repayment/part interest-only basis

We do not need policies to be assigned to us for interest-only mortgages, but it is your client's responsibility to ensure they have a lump sum large enough at the end of the term to repay the capital they have borrowed

Higher lending charge

There is no higher lending charge on any buy to let products.

Further advances

Currently no further advances are available for Buy to Let mortgages.

Supporting documents

For each application we require:

  • A completed Assets and Liabilities form
  • Latest 3 months' bank statements showing all transactions
  • Latest 3 months' pay slips (if employed)
  • 3 years accounts or SA302's and Tax Year Overviews (if self employed), we may need to write to the applicants accountant (subject to acceptable qualifications) for a reference.
  • ID for each applicant
    • UK or EU Passport
    • UK Photocard Driving Licence (full or provisional)
    • UK Paper Driving Licence (full only)
    • Council Tax Bill
    • EU Member State ID Card
    • Non-EU Passport
    • Non-EU ID Card
    • UK Residence Permit
  • Proof of address – it is assumed that proof of address will be verified by the electoral roll search we undertake. If verification does not occur, you will be asked to submit one of the following documents:
    • UK Photocard Driving Licence (full or provisional)
    • UK Paper Driving Licence (full only)
    • HMRC Tax Code Notification
    • Recent Utility Bill
    • Council Tax Bill
    • Tax Credit or Pension Credit Letter
    • Local Authority Tenancy Agreement
    • State Pension Letter
    • State Benefit Letter
    • Bank Statement (postal or printed and stamped in branch)
    • Credit Card Bill (postal only)
    • Mortgage Statement

We cannot use the same document to check the applicants ID and their address. (If you cannot provide any of the above documents, please contact the Intermediary Help Line on 0344 481 2010, press option 2 to discuss further options.)