Residential lending criteria | Barclays Intermediaries

We have two sets of lending criteria at Barclays – residential and buy to let. To make it easier to find what you’re looking for, we’ve listed our criteria details in alphabetical order.

Criteria & Packaging Guide

Our lending criteria at a glance and a comprehensive packaging guide

Residential affordability

Work out how much we could lend your clients for buying a new home.

Residential FAQ

Find more information about registering with us, client applications and submitted cases.

Residential lending products

Family Springboard Mortgages Family Springboard Mortgages

• Applications to be submitted with a deposit from 0% to 9.99% (including any application fees)
• LTI at 4.0 times, however, if applications earn over £50,000 individually or collectively this will go up to 4.49 times
• Maximum loan amount of £500,000
• Maximum term of 35 years
• Applies to purchases only, but not restricted to first-time buyers
• Repayment type must be standard capital and interest, ie not interest-only
• Applicants can only be party to 1 Family Springboard Mortgage; however, there is no restriction to the number of Family Springboard mortgages that helpers can support
• Helpers must put 10% of the purchase price into a Helpful Start account. The deposit monies are to be held for a period of 5 years from mortgage completion subject to satisfactory mortgage payment history throughout that period
• A legal charge must be obtained over the Helpful Start account deposit monies before any mortgage monies are released and the deposit account must be frozen for the period required to support the mortgage. While the charge is in place the Helpful Start account is not covered by the Financial Services Compensation scheme
• The Helpful Start account holders must obtain Independent Legal Advice, to be evidenced by Mortgage Services prior to the release of any mortgage monies. The borrower and the Helper may have the same solicitor for the Independent Legal Advice (though this is dependent on the discretion of the solicitor’s firm)
• Family Springboard Mortgages are not available on new build properties. Such applications should be submitted under the NewBuy Scheme
• It is unacceptable for Family Springboard applications to be submitted where the property is to be let from the outset; this includes armed forces
• Family Springboard mortgages are not available under the Family Affordability Plan (Joint Borrower/Sole Proprietor policy)
• Family Springboard is not available for shared equity or shared ownership propositions
• No additional borrowing is allowed during the first 5 years or while the security deposit funds are being relied on to support
• Standard policy rules apply with regards to affordability, income multiples and adverse credit
• All applicants must be UK/EU/EEA national OR have permanent rights to reside in the UK – this is to be evidenced, usually by the production of passport documentation

An applicant cannot apply for a Family Springboard mortgage if they own a BTL property or have a second residential property, even if it is on a Permission to Let basis.

Forces Help to Buy Forces Help to Buy

Service personnel may be offered a Forces Help To Buy Loan (FHTB), which replaces the Long Service Advance of Pay (LSAP). This is usually a 10-year interest-free loan of up to £25,000. This may be used as a deposit to purchase a property but should be treated as a loan commitment in the normal way with the monthly payments being deducted from the applicant’s income. The sourcing of the deposit in this way must be declared in the mortgage submission, and advisors or underwriters may ask the applicant to provide the ‘Personal Information Note’, which will contain details of their loan. Note: Forces Help to Buy may be used as a deposit to help fund the purchase of a property under the Help to Buy: equity loan, but it cannot be used to help fund a deposit for buying a property through the Help to Buy: mortgage guarantee scheme.

Green Home Mortgages – Residential Green Home Mortgages – Residential

• For fully built properties, a valid Energy Performance Certificate (EPC)
• A valid Predicted Energy Assessment (PEA) certificate if the property is still being built

House builders can verbally confirm the property’s energy efficiency rating straight away, and applicants can use this to progress their application. They’ll still need to send us an eligible EPC or PEA, and should aim to do this as soon as possible. We won’t be able to complete their mortgage without one of these documents.

To find out more, take a look at our lending criteria and our dedicated new build hub

Help to Buy equity loan Help to Buy equity loan

Applications for the government’s Help to Buy scheme have now closed. If your client currently has a Help to Buy mortgage offer in place they must complete their purchase by 31st March 2023. Your clients won’t be able to access the equity loan from Homes England, and won’t be able to complete using a Help to Buy: Equity Loan mortgage. More information on the Help to Buy Equity Loan scheme can be found here: www.gov.uk/help-to-buy-equity-loan

Interest-only mortgages - Residential Interest-only mortgages - Residential

• £300,000 for properties in Greater London
• £250,000 for properties in South-East & East Anglia
• £200,000 for properties in all other regions

The table further below lists the postcodes for each region and equity requirement.

The maximum term for an interest only mortgage is 25 years and cannot extend into retirement.

The maximum income multiple applicable to interest only mortgages is 5.00x (please see the 'Income multiples' section of our lending criteria for full policy details).

There is a minimum income criteria required to be eligible for interest-only borrowing (including part and part borrowing):

• Sole application – the applicant must have a gross income of at least £75,000
• Joint application – one applicant must have a gross income of at least £75,000
• Joint application – where no individual income is over £75,000, joint gross income must be at least £100,000

Income must meet lending standards requirements with regards allowable gross income types i.e. all allowable income types not including any annualised performance bonus paid at the discretion of any employer.

Given the importance of the minimum income criteria, and to protect your customers, please ensure that the minimum requirements are met – particularly where a customer is at the margins of income threshold.

Debt consolidation is not allowed for existing or new interest-only borrowing. The only exceptions to this being where an existing customer has a drawn mortgage reserve balance and wants to consolidate this, or where a customer wishes to add an ERC to the balance of the mortgage when remortgaging to us from a competitor.

The Barclays Group requires all customers who take an interest-only mortgage to have in place a repayment plan for their loan on completion of the advance. Unless using sale of property to be mortgaged, we require the repayment vehicle to have been in place for 12 months. The Barclays Group will consider one, or a combination of the following as acceptable repayment plans for interest only mortgages:

• An existing endowment policy
• An existing stocks and shares ISA
• An existing (minimum 12 months) share, unit, or investment trust (professionally managed)
• Sale of mortgaged property

Where your client wishes to use any other method of repayment to repay the interest-only amount other than the acceptable repayment plans detailed above, this is not acceptable. While it will be the customer’s responsibility to maintain the repayment strategy throughout the term of the mortgage, as a responsible lender, it is important for us to ensure all interest-only mortgages are supported by an acceptable repayment strategy which will be sufficient to cover the interest-only mortgage on maturity.

Part and Part Borrowing – customers can borrow up to 85% LTV by choosing a Part & Part repayment option. The interest only element of the loan must be up to a maximum of 75% LTV (or 50% where the repayment strategy is the sale of the mortgaged property).

In addition, where the repayment strategy is the sale of the mortgaged property, at the outset there must be a minimum equity (this includes any capital and interest borrowing) after accounting for any interest only lending amount of:

• £300,000 for properties in Greater London
• £250,000 for properties in South-East & East Anglia
• £200,000 for properties in all other regions

The table below lists the postcodes for each region and equity requirement.

For example, for a £600,000 property in Greater London (based on the valuation or purchase price – whichever is lower), to meet the equity requirement the customer could borrow maximum of £300,000 on an interest only basis (50%), and £210,000 on capital and interest repayment (35%). So, the total LTV is 85%.

Transactions at Undervalue – eligibility must be based on the actual purchase price and not the property valuation

Existing interest only customers

Existing interest only customers wishing to borrow additional funds or port must meet the current lending standards relating to interest only. This includes meeting the minimum income threshold. Existing customers who do not meet current lending standards for interest only would need to switch their repayment type to capital and interest

Interest-only repayment vehicles

We require a plausibility check to be done on all interest-only mortgages as per the assessment guidelines in the table below. This will determine if your client can borrow the required amount on an interest-only basis. Documentary evidence must be submitted with the mortgage application and will be checked as part of the underwriting process.

Minimum Equity Requirement

Region Postcodes

BR1-BR7, CR0-CR2, CR4-CR5, CR7-CR90, DA1, DA5-DA8, DA14-DA18, E, EC, EN1-EN5, HA0-HA5, HA7-HA9, IG1-IG6, IG8, IG11, KT1-KT6, N, NW, RM1-RM3, RM5-RM14, SE, SM1-SM6, SW, TW1-TW14, UB1-UB8, UB10-UB18, W, WC

South-East and East Anglia

AL, BH25, BN, BR8, CB, CM, CO, CR3, CR6, CT, DA2-DA4, DA9, DA10-DA13, EN6-EN11, GU, HA6, HP, IG7, IG9-IG10, IP, KT7-KT24, LU, ME, MK, NN13, NR, OX, PE1-PE5, PE7, PE13-PE19, PE26-PE38, PO, RG1-RG14, RG18-RG45, RH, RM4, RM15-RM20, SG, SL, SM7, SN6-SN7, SO, SP6, SP10, SS, TN, TW15-TW20, UB9, WD

AB, B, BA, BB, BD, BH1-BH24, BH31, BL, BS, BT, CA, CF, CH, CV, CW, DD, DE, DG, DH, DL, DN, DT, DY, EH, EX, FK, FY, G, GL, HD, HG, HR, HS, HU, HX, IV, KA, KW, KY, L, LA, LD, LE, LL, LN, LS, M, ML, NE, NG, NN1-NN12, NN14-NN29, NP, OL, PA, PE6, PE8-PE12, PE20-PE25, PH, PL, PR, RG17, S, SA, SK, SN1-SN5, SN8-SN99, SP1-SP5, SP7-SP9, SP11, SR, ST, SY, TA, TD, TF, TQ, TR, TS, WA, WF, WN, WR, WS, WV, YO, ZE

Repayment vehicle

Documentary requirement

Plausibility assessment

Existing Stocks and Shares ISA; existing share, unit or investment trust (professionally managed)

Interest-only amount must not exceed the calculated maturity value – must have been held for 12 months

Latest statement – the statement must have been issued no longer than 1 year previously

(Current balance evidenced) + (current monthly investment x term of mortgage in months)* must be sufficient to cover the interest-only mortgage amount on maturity – potential growth must not be included

Sale of mortgaged property

For residential mortgages a maximum LTV of 50% applies to the interest only part of the loan (so you know – you can borrow up to 85% LTV on a part and part basis). Where thesale of property is used as a repayment strategy, any lending beyond 50% LTV must be taken on a capital and interest repayment basis).
There is also an additional requirement to have a minimum equity, after the capital and interest part of the loan in repaid, of:

• £300,000 for properties in Greater London
• £250,000 for properties in South-East & East Anglia
• £200,000 for properties in all other regions

Mortgage Guarantee Scheme Mortgage Guarantee Scheme

• Home buyers purchasing their home as their only residential property
• Single or joint mortgage applications
• Home buyers who want capital repayment mortgages

It can’t be used to

• Purchase a new-build property
• Purchase a second home or a buy-to-let property
• Take out a commercial mortgage
• Take out an interest-only mortgage

Right to buy Right to buy

• We can lend up to 95% of the discounted price as long as this does not exceed 80% of the valuers' open market valuation – eg, if your client’s property is valued at £100,000 and the Local Authority are offering a discount of £35,000, the maximum loan we could consider would be £61,700 (95% of £65,000). However, it’s important to note that for product eligibility, the maximum LTV is based on the full market value, so in the same scenario the LTV for product purposes would be 62%
• Enhanced income multiples can be applied where an appropriate credit score is achieved
• Only the individual(s) entitled to the RTB may apply
• Remortgages will be considered subject to certain criteria. Contact our IBC for guidance

Please note that:

• Our charge must rank in priority to any charge registered by the Local Authority
• Flexible mortgages are available but the Reserve will always be set to nil
• Application fees can be added to the mortgage advance providing the total borrowing does not then exceed 95% of the discounted price
• We’ll need a Deed of Postponement (DoP) for voluntary Right to Buy applications
  

All applications are to be submitted on a full status basis. In addition to the supporting documentation required as per our Requirements Tables, your client will need to provide a copy of the letter from their landlord/local authority confirming the details of their RTB offer.

Self-build mortgages Self-build mortgages

No new mortgages will be accepted at the present time on self build mortgages or stage payment projects, this includes demolish and rebuild scenarios.

Shared equity Shared equity

• A conventional mortgage;
• a deposit from their own resources and;
• a “loan” provided by the Scheme Provider, referred to as an equity loan, which should be recorded as a commitment

The applicant must be funding at least 25% of the purchase price of the property by way of mortgage and their own resources. Applications of up to 85% are acceptable. Applications must be on a standard repayment basis i.e. NOT interest only.

The applicant must provide a minimum 5% deposit from their own resources – this may include a family gift.

The equity loan term must be the same or longer than the mortgage term agreed. For Help to Buy Equity Loans, the equity loan term can be stated as shorter than the mortgage term, as it will be extended in line with the first charge.

Barclays UK MUST be able to take a first legal charge prior to any charge registered by the Scheme Provider.

Additional Borrowing

Can be considered providing Scheme Provider permission is obtained and all areas of this section of Lending Guidelines are met:

• Product availability is based on the full market value. Please see the loan to value section; lowest LTV takes precedent.
• The equity loan will usually be a percentage of the current market value;
• Permission to Let is not to be considered unless there is specific agreement from the Shared Equity Scheme Provider.
• Any fee/interest payment (current or deferred) associated with the equity loan must be included as a commitment in the affordability assessment.

*Scottish Government Schemes:

Barclays supports the following Scottish Governments schemes

First Home Fund

This scheme aims to help first-time buyers in Scotland buy their own home. It provides an interest-free equity loan of up to £25,000 or 49% of the purchase price

• Available for new-build and second-hand properties
• At least one applicant must be a first-time buyer
• Minimum 5% deposit from own resources
• Total LTV must not exceed 85%
• The minimum mortgage amount is 25% of the purchase price
• The entire mortgage must be on a capital and interest repayment basis

Additional Borrowing

Can be considered providing Scheme Provider permission is obtained, where required, and all areas of this section of Lending Guidelines are met:

• Product availability is based on the full market value
• Please see the loan to value section; lowest LTV takes precedent
• Permission to Let is not to be considered unless there is specific agreement from the Shared Equity Scheme Provider

Open Market Shared Equity Scheme (LIFT)

• Available to first-time buyers to assist with the purchase of existing properties on the market
• Standard shared equity requirements as described above are to apply
• In certain cases, the Scottish government will retain a small share, referred to as a “Golden Share”, of a property (10%-20%) to prevent full staircasing in areas where first-time buyers find it difficult to purchase properties – e.g. the Highlands where there are few new properties built. This would then allow the government to have first refusal on purchasing the property back at full market price

New Supply Shared Equity Scheme

• Available to first-time buyers to assist with the purchase of new build properties
• As with the above open market scheme, standard shared equity requirements apply in addition to acceptance of “Golden Share” where this applies

Help-to-buy Scotland

• Please refer to the help-to-buy section

Shared ownership Shared ownership

• Applications must be on a standard repayment basis (ie not interest only)
• Providers and landlords must be registered and regulated by the Homes and Communities Agency in order for their schemes to be acceptable
• The Barclays Group must be able to take a first Legal charge against the customer’s leasehold interest in the property and consent given in the usual way for any second charge
• It is unacceptable for restrictions to be placed on resale of the property, except where these comprise the Scheme Provider having an option to buy back the customer’s share in the property at the full market value for a maximum period of 3 months, such that if the Scheme Provider does not wish to exercise the option to buy back, the lender can staircase to 100% (if necessary) and otherwise sell the property on the open market without any further restriction applying (provided always that the operation of any such resale provision does not prejudice in any way the operation of the mortgagee protection provisions in the lease
• Borrowing must be by way of a Barclays Residential Mortgage product
• The lease should be in the standard form produced by the Homes and Communities Agency incorporating a Mortgage Protection Clause

Additional Borrowing can be considered where consent has been obtained from the scheme provider to purchase an additional share in the property provided we are not lending above 85% of the current market value of the share which the customer will own after staircasing.

Re-mortgages from another lender are acceptable provided agreement from the scheme provider is obtained and all areas of this section of lending guidelines are met i.e. the new mortgage should be for the same amount, unless staircasing or additional borrowing is required to buy-out a co-owner.

Notes:
Products under the NewBuy and Help to Buy schemes are not available for any Shared Ownership proposition.
If the scheme does not meet all the above criteria then Barclays will not lend.