Buy to Let definitions
We do not lend on MCOB regulated Buy to Lets i.e. Where the property is being let to a family member. Consumer Buy to Let (CBTL) rules will apply to remortgage applicants who don’t own any other let properties and either:
Investment Property Loans (IPL) will apply to anyone either:
- Wish to let their current residence whilst purchasing a new residential property (known as a 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.
All advisers submitting a CBTL application will need to hold the relevant CBTL FCA permissions in addition to their normal mortgage permissions.
- Purchasing a property specifically to let
- Remortgaging an existing rental property
The way we assess Buy to Let applications and the choice of products on offer will be the same for both CBTL and IPL.
The rental income must cover at least 160% of the monthly interest part of your mortgage payment, which is currently calculated at 4.25% on an interest only basis.
Buy to Let products
- 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.
Maximum loan: £500,000 per property
- Two year Buy to Let products are available for straight like for like remortgages
- Five year Buy to Let products are available for purchases and other remortgage applications
Maximum LTV: 75% for houses, inclusive of fees or 65% for flats, inclusive of fees
Maximum term: 35 years
Number of properties
Your client can have up to 10 Buy to Let properties within their portfolio, with a combined total of £1,500,000 (maximum £500,000 per property). We will look for the property portfolio to be built up over time, where a track record of account performance can be evidenced as the portfolio size increases.
Total lending with The Nottingham, including residential mortgages, cannot exceed £1,500,000.
Please speak with your BDM to discuss multiple Buy to Let scenarios before submitting applications.
Portfolio landlord applications
Where the total number of properties (excluding limited company Buy to Lets) at the application level, including the property to be mortgaged is four or more, the applicant is considered to be a Portfolio landlord.
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 landlord:
Portfolio landlord applications must meet the following additional criteria:
- Has at least 3 year experience in managing investment properties
- No more than 25% of the overall portfolio are HMO properties
- Has considered the ongoing and future management of the portfolio including professional and management fees
| Maximum LTV for the portfolio
|| 75% LTV
| Maximum Buy to Let portfolio size
|| 10 Buy to Let 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:
|Maximum interest coverage ratio
|Assumed stressed interest rate
The applicant/s own deposit or gift from an immediate family member is acceptable (providing the person making the gift is not occupying the property).
We do not accept builders deposits, or personal loans to support the clients application.