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People
First Time Landlords are acceptable provided there have owned their own residential property in the UK and has had at least 6 months mortgage experience with evidence available where required. Applicants do not need to be owner occupants.
The following are unacceptable for BTL Applications:
- First Time Buyers - at least one applicant on the case must have mortgage experience
- Ex-pats
- Trustee Applications
- Guarantors
The Society uses Experian for its credit searches. You can find more information on our Credit Scoring Guide.
A full Credit Search is required for each applicant.
The Society’s policy on Credit Performance and Credit History is as follows:
Credit Defaults
The following is acceptable (subject to overall ‘score’) and providing all other conditions are met:
- 1 default recorded in the last 12 months where the total value of the default is less than £500, the default must be satisfied at the time of application
- A maximum of 3 defaults recorded in the last 24 months where the total value of the defaults is less than £1000, all defaults must be satisfied at the time of application
- There must be no missed payments on any account within the last 6 months
Unsatisfied Defaults
We will only accept an unsatisfied default if this is less than £50 and evidence is provided to confirm this has been paid.
County/High Court Judgements
The following is acceptable (subject to overall ‘score’) and providing all other conditions are met:
- 1 CCJ less than £500 registered in last 3 years, now satisfied
Bankruptcy/IVA/Debt Relief Order
The application can be considered where:
- Any Bankruptcy/IVA/Debt Relief Order has been discharged at least 3 years ago
- Applicant is within limits on all revolving/flexible credit lines
- There are no arrears on any account within the last 6 months
Mortgage and Secured credit Arrears
- Applications with any mortgage or secured arrears in the last 6 months will be declined
- Applications with mortgage arrears of more than 2 months in last 2 years will be declined
Unsecured Loan missed payments/credit card/store cards
The application will be declined if:
- There are more than 2 missed payments on any account in last 6 months
- There are more than 2 missed payments on any loan within the last 2 years
- If any account is currently 1 month in arrears (where total balance of accounts is greater than £100)
Bank Account conduct
The application will be declined if:
- Overdraft limit has been exceeded within the latest month
- Credit Bureau report status 1 or worse is reported on any bank account within latest month
- Credit Bureau report status 2 or worse is reported on any bank account within latest 6 months
Credit limits
- If any credit line is reported as over the limit at the time of the search the application will be declined
Payday loans
- If any Payday loan has been used within the last 2 years the application will be declined
Debt Management programmes
- Applicants who are currently or have been previously subject to a Debt Management Plan must have no missed payments on any accounts in the last 6 months.
Your client must have a minimum gross earned income of £20,000. (Where application is in joint names the main earner must have a gross minimum acceptable earned income of £20,000)
For Rental Income 100% of UK Land and Property can be used from the latest SA302 (subject to 2 years SA302’s being provided).
Total indebtedness will also be included in the affordability assessment. Applications will be referred where the applicants total Buy To Let borrowings (existing plus the new BTL application) exceed 10 x their annual acceptable income. Where the overall level of indebtedness is identified as a concern the application will be declined.
We will assess your client as a Portfolio Landlord if they have 4 or more BTL mortgages on completion of our mortgage, this includes any BTL mortgages held with other lenders. The Portfolio Landlord requirements will also apply if your client currently has 3 BTL mortgages and they are raising funds on a Skipton mortgage to purchase another BTL.
The following policy applies to all Portfolio Landlord applications:
- Maximum LTV of 75% applies to both mortgage application and overall portfolio
- A minimum of 2 years current BTL experience is required for Portfolio Landlords (on joint applications at least one borrower should have 2 years minimum BTL experience)
- At least 1 applicant must have a minimum gross acceptable earned income of £45,000. For joint applications, if this is not possible, a combined minimum gross acceptable earned income of £60,000 is acceptable. 100% of rental income can be used (UK Land and Property figure as shown on the latest SA302, 2 years SA302s will be required)
- Maximum of 10 properties (either mortgaged or unencumbered) in total, with a maximum of 5 with Skipton Building Society, whether held jointly or solely
- No more than 3 mortgaged BTL properties with any lender in any one postcode
- Rental Income cover for the property being mortgaged must meet the Society’s rental calculation for Portfolio Landlords, which is 145% @ 7.94% if taking a fixed rate product for less than 5 years (or 6.04% if taking a fixed product of 5 years or more). However, if the application is for a Like for Like Remortgage then the rental calculation used will be 125% @ 7.94% if taking a fixed rate product for less than 5 years (or 6.04% if taking a fixed product of 5 years or more)
- The rental income for background properties must meet the Society’s calculation of 145% @ 6%. However, if the application is for a Like for Like Remortgage (with no requirement for top slicing) then the rental calculation of 125% @ 6% will be applied
- A Cash Flow & Other Assets Document must be completed for all Portfolio Landlord applications.
Policy
| Acceptable | Not Acceptable |
|---|---|
| Capital Raising | Debt consolidation |
| Remortgaging existing residential BTL (provided Let to Buy) | Replace development finance |
| Gifted Deposit with minimum 12 months mortgage experience. Spousal gift acceptable for BTL only. | Family Lets |
| Family purchase | Purchasing property from own Limited Company |
| Mort than 3 mortgage BTL properties with any lender in any one full postcode | |
| Holiday lets |
If your client has an existing mortgage with us and they want to borrow more, for example to carry out property improvements, then they can apply for an additional borrowing loan.
Additional Borrowing for business purposes or debt consolidation is not acceptable.
A minimum additional borrowing loan amount of £10,000 applies in most circumstances.
If the additional borrowing is for green home improvements (subject to product availability, 50%+ of the additional borrowing must be for green home improvements) then a minimum loan amount of £5,000 is acceptable.
Affordability is calculated on the total new loan amount, not just the additional borrowing.
Where funds are being requested for Green home improvements, quotes and estimates will be required to cover the full amount of the improvements.
Additional Borrowing is allowed up to a maximum LTV of 75%, the maximum LTV includes the current balance & the proposed additional loan.
Your client must have made six months' consecutive mortgage payments before applying for Additional Borrowing. Your client must not have had any mortgage or secured arrears in the last six months or have exceeded two missed months mortgage payments in the last two years.
To assess an Additional Borrowing application the following calculations will be used (irrespective of product selected):
Higher rate taxpayers/Portfolio Landlords
- 145% at 7.94%
Standard rate taxpayers
- 125% at 7.94%
You can submit an Additional Borrowing application for your client through eMortgages, it’s a single stage application process as a Decision In Principle (DIP) is not required.
Capital Raising is acceptable on Buy To Let remortgages up to 75% LTV for the following reasons:
- To repay an existing BTL mortgage secured on the property.
- Raising funds for home improvements to the security property.
- Raising funds to purchase another BTL property.
- Raising funds to purchase another residential property.
- To repay part of all of an existing residential mortgage.
£3,000,000 BTL mortgages with SBS including any within the SBS Group.
Maximum of 5 BTL properties with The Society whether help jointly or solely.
Maximum of 10 properties in a portfolio. This includes any new/existing SBS BTL mortgages and regardless of whether unencumbered or mortgaged.
If your client chooses to remortgage and rent out their current residential property to enable them to purchase a new residential property, relocate or move in with a partner/family member, then the following policy applies to the mortgage for the property to be let:
- 70% Maximum LTV
- 40 years maximum term, (25 years if any element of Interest Only)
- £20,000 gross minimum earned income (for joint applications, the main earner must have a gross minimum earned income of £20,000)
- tenancy Agreement must be a minimum of 6 months
- if the mortgage on the property to be let is already with Skipton Building Society, then ‘Consent to Let’ must be applied for and accepted before a Decision in Principle is submitted
When assessing the application we will use the following rental calculations:
- Higher rate taxpayers
145% @ 7.94% (or 6.04% if taking a fixed rate product of 5+ years) - Standard rate taxpayers
125% @ 7.94% (or 6.04% if taking a fixed rate product of 5+ years)
Let to Buy: Onward Residential Purchase
This will be the applicants’ main residence after their existing residential property has been converted to a BTL. If the onward purchase is to be mortgaged with Skipton Building Society then the following policy applies:
- 95% Maximum LTV
- where the applicant is raising funds from a mortgage elsewhere for the deposit, details of the mortgage must be provided prior to the offer of the new Skipton Building Society residential mortgage
- where the mortgage for the property to be let is to be held with another lender, evidence of the projected rental income is required. The Underwriter may request a rental assessment letter from an ARLA agent (Association of Residential Letting Agents) if they feel this is required. Rental income must meet the Society’s calculation of 125% @ 6%. This applies at both the individual property and at portfolio level. Any shortfall will be taken as an outgoing if the security LTV is greater than 75%.
Max Loan Amount is £1.5 million
Buy To let Applications:
- Maximum 70% LTV for Consumer BTL applications
- Maximum 75% LTV for all other BTL applications (subject to product maximum)
Let To Buy Applications:
- Maximum 70% LTV on the property to be let out
- Maximum 95% LTV on the new onward residential purchase property (subject to acceptable income and affordability checks)
Once you have submitted your application on the eMortgages system please check the ‘Outstanding Items’ list in eMortgages to determine what documents you need to forward to us.
We automatically attempt to electronically verify every applicant’s ID and income when the application is submitted, this means that our document requirements may vary for each applicant.
If your case is submitted correctly packaged it will mean that it can be fully underwritten within our service levels, providing a quick and efficient service for you and your client.
Photographs of supporting documents are acceptable, with the exception of Personal and Address ID documents. For further guidance please refer to our Acceptable Documents [PDF].
A completed Cash Flow document [PDF] will also be required for all Portfolio Landlord applications.
Additional documentation may be requested by the Underwriter if they feel this is necessary to process the application.
Rental Income cover for the property being mortgaged must meet the Society’s appropriate rental calculation as explained below:
Higher rate taxpayers and Portfolio BTL Landlords
- less than 5-year fixed rate product taken - 145% at 7.94%
- 5-year fixed rate product or more taken - 145% at 6.04%
Standard rate taxpayers
- less than 5-year fixed rate product taken - 125% at 7.94%
- 5-year fixed product or more taken - 125% at 6.04%
Like for Like Remortgage (regardless of Tax Status)
(Excluding Consumer BTL and/or Let To Buy applications)
- less than 5-year fixed rate product taken - 125% at 7.94%
- 5-year fixed rate product or more taken - 125% at 6.04%
BTL Additional Borrowing (irrespective of product selected)
Higher rate taxpayers and BTL Portfolio Landlords
- 145% at 7.94%
Standard Rate taxpayers
- 125% at 7.94%
Where rent is being paid from a foreign source (i.e. not in £Sterling, IOM£ or Gibraltar£), it will not be used in the rental income calculation.
All repayment types are acceptable. Interest Only is acceptable for the whole loan, with the sale of BTL property being the repayment vehicle. If interest only then maximum term is 25 years.
Where the interest coverage ratio (ICR) on the SBS security falls below 145%, we may consider the application where all the following conditions are met;
- Rental income cover is at least 110% @ 7.94% (or 6.04% if a fixed product of 5 years or more is required)
- Applicant’s Income is £45k minimum (or £60k for joint applications)
- Background BTL portfolio rental income covers at least 135% @ 6%
On TSM's where the LTV is 65% or below the Society will assess the property using the original file valuation (index linked) supported by an AVM.
Property
The property must be;
- Of a traditional construction, as defined by the Society’s panel valuer for the property type
- In a satisfactory condition
- Of a suitable type
- Be recommended as suitable security by a valuer on the Society's valuer panel
- Split titles are not acceptable
- Within overall exposure limit in any development (will typically be limited to 20%)
£75,000 is the minimum accepted purchase price/property valuation (whichever is lower) for BTL applications
Acceptable
- New build houses for BTL
- New build remortgage (if proof from Land Registry is obtained confirming property already owned by applicant(s) for 6 months)
- New build flat/flat conversions for BTL
- Flats that have a minimum floor space of 30 square metres. There is no restriction on floors in the block or number of units in the block, but if the number of floors exceeds 5, then lift access is required
- Leasehold properties with a minimum 85 years unexpired term on completion of the mortgage
- Non-standard flats (e.g. with commercial (including retail) outlets in the development/block, Ex local authority flat, deck access, mezzanine floor (galleried) and studio flats) minimum property value required is £100k outside the M25/£300K within the M25
- Grade II listed buildings (B & C in Scotland)
- Properties with Japanese Knotweed (subject to valuer’s comments)
- Repossessions
Not Acceptable
- New build properties bought off plan
- Grade I/Grade II* Listed properties (Grade A in Scotland)
- Any security affected by any invasive plant species
- Flats if number of floors exceeds 5 and there's no lift access
- Any property with a floor space less than 30 square metres
- Leasehold properties with less than 85 years unexpired term on completion of the mortgage
- Commonhold properties
- Properties where spray foam insulation has been applied to the underside of the roof covering
Flats are acceptable for BTL purposes as per our policy outlined below:
Please note: Our policy on flats does not restrict based on storey height or number of units in a block but, where storey height exceeds 5 floors, access to a lift is required.
- Maximum LTV is 75%
- Minimum property value/purchase price (whichever is lower) is £75,000
- Non-standard flats (above commercial, deck access, mezzanine flats, studio, ex-local authority) are acceptable for Buy to Let. The minimum value is £100k outside the M25/£300K within the M25
- Overall exposure in any development typically limited to 20%
- Re-enforced in situ concrete with brick render is considered a standard construction for flats and is acceptable to the Society
- Minimum floor space of 30 square metres for all flats is required (we may consider exceptions to this subject to satisfactory valuation).
Flats within commercial/retail outlets
A standard valuation will be carried out and the decision to lend will be made on whether the valuer recommends we proceed. The recommendation will be subject to the valuer believing the property is suitable security for a mortgage and will be easily re-saleable. The valuer's decision is final: no challenges will be accepted, and no refunds of valuations fees will be issued if the decision is a decline.
Any property being sold for occupation for the first time which has been newly built or converted within the last 3 calendar years will be defined as a New Build property.
- New Build Homes are acceptable providing the build is completed within 12 months of the Societies 1st mortgage offer.
- Properties bought off plan are not acceptable for BTL applications.
- We accept BTL applications up to 75%* LTV for New Build properties.
*If Incentives apply the maximum LTV may be reduced, please refer to New Build Incentives for more details.
For properties built within the last 10 years, a suitable certificate/guarantee must be available. The following new home warranty schemes are acceptable:
- ABC+
- Aedis Warranties Limited (HomeProof)
- Ark Insurance Group Limited
- BLP (Building Life Plans)
- Build Assure/FMB Insurance
- Build Zone
- CADIS
- Castle 10 Checkmate
- Global Home Warranties Limited
- International Construction Warranties (ICW)
- LABC
- NHBC
- One Guarantee
- Premier Guarantee
- Protek
- The Q Policy for Residential Properties, Bespoke Properties and Completed Properties
- Thomas Miller Specialist Construction.
If the property does not have the benefit of a new home warranty scheme, we require a Professional Consultant Certificate. Where a Professional Consultant's Certificate is accepted in place of a new home warranty scheme, these are only acceptable on small scale developments i.e. those consisting of 15 residential units or less (either houses or residential flats).
Builders may offer sales incentives to potential buyers to encourage them to purchase their property. An incentive is anything the builder gives or provides to the buyer in cash or goods. Typical examples are deposits (i.e. builders deposits) paid before completion and cash paid after completion - often to pay stamp duty or legal fees. As all incentives must be paid for by the builder, they can be regarded as a less transparent alternative to reducing the sale price.
Assessment of Incentives
Financial incentives of up to 5% of the purchase price or valuation (whichever is the lower) are allowed on New Build properties only and are permitted on any New Build. Any application where the financial incentive value exceeds 5% will be declined, regardless of the LTV.
Where there is a financial incentive on a BTL application the maximum LTV available will be reduced by 5% to 70% LTV.
The Customer must be able to provide a minimum of a 5% deposit (a builder deposit can be accepted in addition to this but not in place of the customer’s own deposit).
Evidence
- All incentives must be declared at DIP stage. The UK Finance Disclosure of Incentives form (formally CML incentive form) is required by the valuer, which provides details and value of any incentives.
- Valuers take incentives into account when preparing the valuation report. Please note that all lending is always subject to a satisfactory valuation for mortgage purposes.
- We will work off the lower of the valuation or the purchase price.
- Evidence of the deposit may be requested at application stage.
The Society does not accept applications where:
- The builders/vendors are paying above market value for a part exchange property.
- The application has any form of Vendor (Private Seller) deposit funding.
The Society is willing to lend in the following instances:
- Converted Properties (where not mandatory licensed HMO)
- New build properties. This is provided that the build is in progress & subject to mortgage offer. If remortgaging, proof from the Land Registry will be required confirming that the property has been owned by the applicant(s) for at least 6 months.
The following are unacceptable:
- Properties where the applicant is also an owner occupier in the same building as the tenants (mix of ownership - rental & freehold)
- Properties with more than 4 bedrooms where let on a multiple occupancy basis
- Sale & rent back schemes
- New Build Properties bought off plan
- House in Multiple Occupancy (HMO) requiring Mandatory License
- Properties where the applicant(s) intend to reside now or in the future
- Holiday lets
- Sub letting
- Properties where any rent received is from a foreign source.
Assured Shorthold Tenancy Agreements (ASTs) are acceptable or, if in Scotland, a Private Residential Tenancy is acceptable.
A maximum of 4 tenants is allowed. Where there is any element of multiple occupancy, the maximum number of bedrooms acceptable is 4. We do not accept mandatory licensed HMOs.
Where the tenants are students, professionals or there is any element of multi-occupancy the Landlord must be experienced (a minimum of 12 months experience is required).
Corporate Lets are acceptable for a maximum of 3 years. The Landlord must be experienced (minimum of 12 months experience), and no sub-letting is permitted.
Where a premium lease exists, this is not acceptable. The corporate body must be responsible for the rent and can only use the property for their own letting use and not sub let. We will not accept applicants purchasing property and then creating a tenancy agreement with a letting company, who subsequently sub let to tenants.
All flats and maisonettes must be leasehold (feuhold in Scotland) with a minimum unexpired term of 85 on completion of the mortgage.
Freehold flats where the borrower will also own a share in a management company that owns the freehold are acceptable.
Freehold flats are not acceptable. The only exception to this is the purchase of freehold flats in Scarborough. Tyneside flats where there are reciprocating lease / freehold arrangements are also acceptable.
Commonhold properties are not acceptable to lend on, by the Society.
View our current Valuation Fee Scale for full details.
- We aim to instruct a valuation within 24 hours of the application being submitted. The type of valuation instructed will be the most suitable for the application, taking into consideration property type, LTV, etc and will be solely for the purposes of assessing the security property for mortgage purposes. This may be an AVM, Desktop or standard mortgage valuation.
- Connells act as the Society’s panel managers and deal with maintenance of the panel together with the allocation of all instructions. A Panel Valuer that covers the security postcode area is always used
- Some products may qualify for a free valuation. This is up to a maximum purchase price/estimated valuation of £1,500,000. Please refer to the specific product details for further information, there may be some additional travel fees if the property is located off the mainland or in a remote location.
- A valuation instructed for Additional Borrowing purposes is free to the Customer, irrespective of the type of report obtained by the Society
- The minimum acceptable property value is £75,000
- Valuations are valid for 12 months from the date appearing on the valuation report or transcript report
- The Society does not accept re-type valuations except on Scottish cases, where a transcript is requested. If more than 3 months old, we will require a refresh before the transcript will be requested
- The Society will instruct a valuation for mortgage purposes only
- The Customer can request a RICS Home Survey Level 2 or a RICS Home Survey Level 3 but they would need to arrange this directly with Connells. Connells will provide a discount for cases proceeding with the Society, the customer should contact Connells direct on telephone number 01525 218655 to benefit from this service. Your client needs to confirm their application is with Skipton Building Society and quote their mortgage application number, Skipton customers can expect to receive a minimum discount of 28%. Requesting a RICS home survey Level 2 or Level 3 will not delay the mortgage offer.
People
First Time Landlords are acceptable provided there have owned their own residential property in the UK and has had at least 6 months mortgage experience with evidence available where required. Applicants do not need to be owner occupants.
The following are unacceptable for BTL Applications:
- First Time Buyers - at least one applicant on the case must have mortgage experience
- Ex-pats
- Trustee Applications
- Guarantors
Policy
| Acceptable | Not Acceptable |
|---|---|
| Capital Raising | Debt consolidation |
| Remortgaging existing residential BTL (provided Let to Buy) | Replace development finance |
| Gifted Deposit with minimum 12 months mortgage experience. Spousal gift acceptable for BTL only. | Family Lets |
| Family purchase | Purchasing property from own Limited Company |
| Mort than 3 mortgage BTL properties with any lender in any one full postcode | |
| Holiday lets |
If your client has an existing mortgage with us and they want to borrow more, for example to carry out property improvements, then they can apply for an additional borrowing loan.
Additional Borrowing for business purposes or debt consolidation is not acceptable.
A minimum additional borrowing loan amount of £10,000 applies in most circumstances.
If the additional borrowing is for green home improvements (subject to product availability, 50%+ of the additional borrowing must be for green home improvements) then a minimum loan amount of £5,000 is acceptable.
Affordability is calculated on the total new loan amount, not just the additional borrowing.
Where funds are being requested for Green home improvements, quotes and estimates will be required to cover the full amount of the improvements.
Additional Borrowing is allowed up to a maximum LTV of 75%, the maximum LTV includes the current balance & the proposed additional loan.
Your client must have made six months' consecutive mortgage payments before applying for Additional Borrowing. Your client must not have had any mortgage or secured arrears in the last six months or have exceeded two missed months mortgage payments in the last two years.
To assess an Additional Borrowing application the following calculations will be used (irrespective of product selected):
Higher rate taxpayers/Portfolio Landlords
- 145% at 7.94%
Standard rate taxpayers
- 125% at 7.94%
You can submit an Additional Borrowing application for your client through eMortgages, it’s a single stage application process as a Decision In Principle (DIP) is not required.
Property
The property must be;
- Of a traditional construction, as defined by the Society’s panel valuer for the property type
- In a satisfactory condition
- Of a suitable type
- Be recommended as suitable security by a valuer on the Society's valuer panel
- Split titles are not acceptable
- Within overall exposure limit in any development (will typically be limited to 20%)
£75,000 is the minimum accepted purchase price/property valuation (whichever is lower) for BTL applications
Acceptable
- New build houses for BTL
- New build remortgage (if proof from Land Registry is obtained confirming property already owned by applicant(s) for 6 months)
- New build flat/flat conversions for BTL
- Flats that have a minimum floor space of 30 square metres. There is no restriction on floors in the block or number of units in the block, but if the number of floors exceeds 5, then lift access is required
- Leasehold properties with a minimum 85 years unexpired term on completion of the mortgage
- Non-standard flats (e.g. with commercial (including retail) outlets in the development/block, Ex local authority flat, deck access, mezzanine floor (galleried) and studio flats) minimum property value required is £100k outside the M25/£300K within the M25
- Grade II listed buildings (B & C in Scotland)
- Properties with Japanese Knotweed (subject to valuer’s comments)
- Repossessions
Not Acceptable
- New build properties bought off plan
- Grade I/Grade II* Listed properties (Grade A in Scotland)
- Any security affected by any invasive plant species
- Flats if number of floors exceeds 5 and there's no lift access
- Any property with a floor space less than 30 square metres
- Leasehold properties with less than 85 years unexpired term on completion of the mortgage
- Commonhold properties
- Properties where spray foam insulation has been applied to the underside of the roof covering
Any property being sold for occupation for the first time which has been newly built or converted within the last 3 calendar years will be defined as a New Build property.
- New Build Homes are acceptable providing the build is completed within 12 months of the Societies 1st mortgage offer.
- Properties bought off plan are not acceptable for BTL applications.
- We accept BTL applications up to 75%* LTV for New Build properties.
*If Incentives apply the maximum LTV may be reduced, please refer to New Build Incentives for more details.
For properties built within the last 10 years, a suitable certificate/guarantee must be available. The following new home warranty schemes are acceptable:
- ABC+
- Aedis Warranties Limited (HomeProof)
- Ark Insurance Group Limited
- BLP (Building Life Plans)
- Build Assure/FMB Insurance
- Build Zone
- CADIS
- Castle 10 Checkmate
- Global Home Warranties Limited
- International Construction Warranties (ICW)
- LABC
- NHBC
- One Guarantee
- Premier Guarantee
- Protek
- The Q Policy for Residential Properties, Bespoke Properties and Completed Properties
- Thomas Miller Specialist Construction.
If the property does not have the benefit of a new home warranty scheme, we require a Professional Consultant Certificate. Where a Professional Consultant's Certificate is accepted in place of a new home warranty scheme, these are only acceptable on small scale developments i.e. those consisting of 15 residential units or less (either houses or residential flats).
Builders may offer sales incentives to potential buyers to encourage them to purchase their property. An incentive is anything the builder gives or provides to the buyer in cash or goods. Typical examples are deposits (i.e. builders deposits) paid before completion and cash paid after completion - often to pay stamp duty or legal fees. As all incentives must be paid for by the builder, they can be regarded as a less transparent alternative to reducing the sale price.
Assessment of Incentives
Financial incentives of up to 5% of the purchase price or valuation (whichever is the lower) are allowed on New Build properties only and are permitted on any New Build. Any application where the financial incentive value exceeds 5% will be declined, regardless of the LTV.
Where there is a financial incentive on a BTL application the maximum LTV available will be reduced by 5% to 70% LTV.
The Customer must be able to provide a minimum of a 5% deposit (a builder deposit can be accepted in addition to this but not in place of the customer’s own deposit).
Evidence
- All incentives must be declared at DIP stage. The UK Finance Disclosure of Incentives form (formally CML incentive form) is required by the valuer, which provides details and value of any incentives.
- Valuers take incentives into account when preparing the valuation report. Please note that all lending is always subject to a satisfactory valuation for mortgage purposes.
- We will work off the lower of the valuation or the purchase price.
- Evidence of the deposit may be requested at application stage.
The Society does not accept applications where:
- The builders/vendors are paying above market value for a part exchange property.
- The application has any form of Vendor (Private Seller) deposit funding.
People
The Society uses Experian for its credit searches. You can find more information on our Credit Scoring Guide.
A full Credit Search is required for each applicant.
The Society’s policy on Credit Performance and Credit History is as follows:
Credit Defaults
The following is acceptable (subject to overall ‘score’) and providing all other conditions are met:
- 1 default recorded in the last 12 months where the total value of the default is less than £500, the default must be satisfied at the time of application
- A maximum of 3 defaults recorded in the last 24 months where the total value of the defaults is less than £1000, all defaults must be satisfied at the time of application
- There must be no missed payments on any account within the last 6 months
Unsatisfied Defaults
We will only accept an unsatisfied default if this is less than £50 and evidence is provided to confirm this has been paid.
County/High Court Judgements
The following is acceptable (subject to overall ‘score’) and providing all other conditions are met:
- 1 CCJ less than £500 registered in last 3 years, now satisfied
Bankruptcy/IVA/Debt Relief Order
The application can be considered where:
- Any Bankruptcy/IVA/Debt Relief Order has been discharged at least 3 years ago
- Applicant is within limits on all revolving/flexible credit lines
- There are no arrears on any account within the last 6 months
Mortgage and Secured credit Arrears
- Applications with any mortgage or secured arrears in the last 6 months will be declined
- Applications with mortgage arrears of more than 2 months in last 2 years will be declined
Unsecured Loan missed payments/credit card/store cards
The application will be declined if:
- There are more than 2 missed payments on any account in last 6 months
- There are more than 2 missed payments on any loan within the last 2 years
- If any account is currently 1 month in arrears (where total balance of accounts is greater than £100)
Bank Account conduct
The application will be declined if:
- Overdraft limit has been exceeded within the latest month
- Credit Bureau report status 1 or worse is reported on any bank account within latest month
- Credit Bureau report status 2 or worse is reported on any bank account within latest 6 months
Credit limits
- If any credit line is reported as over the limit at the time of the search the application will be declined
Payday loans
- If any Payday loan has been used within the last 2 years the application will be declined
Debt Management programmes
- Applicants who are currently or have been previously subject to a Debt Management Plan must have no missed payments on any accounts in the last 6 months.
Policy
Capital Raising is acceptable on Buy To Let remortgages up to 75% LTV for the following reasons:
- To repay an existing BTL mortgage secured on the property.
- Raising funds for home improvements to the security property.
- Raising funds to purchase another BTL property.
- Raising funds to purchase another residential property.
- To repay part of all of an existing residential mortgage.
No criteria available for the selected letter
Policy
£3,000,000 BTL mortgages with SBS including any within the SBS Group.
Maximum of 5 BTL properties with The Society whether help jointly or solely.
Maximum of 10 properties in a portfolio. This includes any new/existing SBS BTL mortgages and regardless of whether unencumbered or mortgaged.
Property
Flats are acceptable for BTL purposes as per our policy outlined below:
Please note: Our policy on flats does not restrict based on storey height or number of units in a block but, where storey height exceeds 5 floors, access to a lift is required.
- Maximum LTV is 75%
- Minimum property value/purchase price (whichever is lower) is £75,000
- Non-standard flats (above commercial, deck access, mezzanine flats, studio, ex-local authority) are acceptable for Buy to Let. The minimum value is £100k outside the M25/£300K within the M25
- Overall exposure in any development typically limited to 20%
- Re-enforced in situ concrete with brick render is considered a standard construction for flats and is acceptable to the Society
- Minimum floor space of 30 square metres for all flats is required (we may consider exceptions to this subject to satisfactory valuation).
Flats within commercial/retail outlets
A standard valuation will be carried out and the decision to lend will be made on whether the valuer recommends we proceed. The recommendation will be subject to the valuer believing the property is suitable security for a mortgage and will be easily re-saleable. The valuer's decision is final: no challenges will be accepted, and no refunds of valuations fees will be issued if the decision is a decline.
No criteria available for the selected letter
No criteria available for the selected letter
People
Your client must have a minimum gross earned income of £20,000. (Where application is in joint names the main earner must have a gross minimum acceptable earned income of £20,000)
For Rental Income 100% of UK Land and Property can be used from the latest SA302 (subject to 2 years SA302’s being provided).
Total indebtedness will also be included in the affordability assessment. Applications will be referred where the applicants total Buy To Let borrowings (existing plus the new BTL application) exceed 10 x their annual acceptable income. Where the overall level of indebtedness is identified as a concern the application will be declined.
No criteria available for the selected letter
No criteria available for the selected letter
Policy
If your client chooses to remortgage and rent out their current residential property to enable them to purchase a new residential property, relocate or move in with a partner/family member, then the following policy applies to the mortgage for the property to be let:
- 70% Maximum LTV
- 40 years maximum term, (25 years if any element of Interest Only)
- £20,000 gross minimum earned income (for joint applications, the main earner must have a gross minimum earned income of £20,000)
- tenancy Agreement must be a minimum of 6 months
- if the mortgage on the property to be let is already with Skipton Building Society, then ‘Consent to Let’ must be applied for and accepted before a Decision in Principle is submitted
When assessing the application we will use the following rental calculations:
- Higher rate taxpayers
145% @ 7.94% (or 6.04% if taking a fixed rate product of 5+ years) - Standard rate taxpayers
125% @ 7.94% (or 6.04% if taking a fixed rate product of 5+ years)
Let to Buy: Onward Residential Purchase
This will be the applicants’ main residence after their existing residential property has been converted to a BTL. If the onward purchase is to be mortgaged with Skipton Building Society then the following policy applies:
- 95% Maximum LTV
- where the applicant is raising funds from a mortgage elsewhere for the deposit, details of the mortgage must be provided prior to the offer of the new Skipton Building Society residential mortgage
- where the mortgage for the property to be let is to be held with another lender, evidence of the projected rental income is required. The Underwriter may request a rental assessment letter from an ARLA agent (Association of Residential Letting Agents) if they feel this is required. Rental income must meet the Society’s calculation of 125% @ 6%. This applies at both the individual property and at portfolio level. Any shortfall will be taken as an outgoing if the security LTV is greater than 75%.
Buy To let Applications:
- Maximum 70% LTV for Consumer BTL applications
- Maximum 75% LTV for all other BTL applications (subject to product maximum)
Let To Buy Applications:
- Maximum 70% LTV on the property to be let out
- Maximum 95% LTV on the new onward residential purchase property (subject to acceptable income and affordability checks)
Policy
Max Loan Amount is £1.5 million
Once you have submitted your application on the eMortgages system please check the ‘Outstanding Items’ list in eMortgages to determine what documents you need to forward to us.
We automatically attempt to electronically verify every applicant’s ID and income when the application is submitted, this means that our document requirements may vary for each applicant.
If your case is submitted correctly packaged it will mean that it can be fully underwritten within our service levels, providing a quick and efficient service for you and your client.
Photographs of supporting documents are acceptable, with the exception of Personal and Address ID documents. For further guidance please refer to our Acceptable Documents [PDF].
A completed Cash Flow document [PDF] will also be required for all Portfolio Landlord applications.
Additional documentation may be requested by the Underwriter if they feel this is necessary to process the application.
No criteria available for the selected letter
No criteria available for the selected letter
People
We will assess your client as a Portfolio Landlord if they have 4 or more BTL mortgages on completion of our mortgage, this includes any BTL mortgages held with other lenders. The Portfolio Landlord requirements will also apply if your client currently has 3 BTL mortgages and they are raising funds on a Skipton mortgage to purchase another BTL.
The following policy applies to all Portfolio Landlord applications:
- Maximum LTV of 75% applies to both mortgage application and overall portfolio
- A minimum of 2 years current BTL experience is required for Portfolio Landlords (on joint applications at least one borrower should have 2 years minimum BTL experience)
- At least 1 applicant must have a minimum gross acceptable earned income of £45,000. For joint applications, if this is not possible, a combined minimum gross acceptable earned income of £60,000 is acceptable. 100% of rental income can be used (UK Land and Property figure as shown on the latest SA302, 2 years SA302s will be required)
- Maximum of 10 properties (either mortgaged or unencumbered) in total, with a maximum of 5 with Skipton Building Society, whether held jointly or solely
- No more than 3 mortgaged BTL properties with any lender in any one postcode
- Rental Income cover for the property being mortgaged must meet the Society’s rental calculation for Portfolio Landlords, which is 145% @ 7.94% if taking a fixed rate product for less than 5 years (or 6.04% if taking a fixed product of 5 years or more). However, if the application is for a Like for Like Remortgage then the rental calculation used will be 125% @ 7.94% if taking a fixed rate product for less than 5 years (or 6.04% if taking a fixed product of 5 years or more)
- The rental income for background properties must meet the Society’s calculation of 145% @ 6%. However, if the application is for a Like for Like Remortgage (with no requirement for top slicing) then the rental calculation of 125% @ 6% will be applied
- A Cash Flow & Other Assets Document must be completed for all Portfolio Landlord applications.
Property
The Society is willing to lend in the following instances:
- Converted Properties (where not mandatory licensed HMO)
- New build properties. This is provided that the build is in progress & subject to mortgage offer. If remortgaging, proof from the Land Registry will be required confirming that the property has been owned by the applicant(s) for at least 6 months.
The following are unacceptable:
- Properties where the applicant is also an owner occupier in the same building as the tenants (mix of ownership - rental & freehold)
- Properties with more than 4 bedrooms where let on a multiple occupancy basis
- Sale & rent back schemes
- New Build Properties bought off plan
- House in Multiple Occupancy (HMO) requiring Mandatory License
- Properties where the applicant(s) intend to reside now or in the future
- Holiday lets
- Sub letting
- Properties where any rent received is from a foreign source.
No criteria available for the selected letter
Policy
Rental Income cover for the property being mortgaged must meet the Society’s appropriate rental calculation as explained below:
Higher rate taxpayers and Portfolio BTL Landlords
- less than 5-year fixed rate product taken - 145% at 7.94%
- 5-year fixed rate product or more taken - 145% at 6.04%
Standard rate taxpayers
- less than 5-year fixed rate product taken - 125% at 7.94%
- 5-year fixed product or more taken - 125% at 6.04%
Like for Like Remortgage (regardless of Tax Status)
(Excluding Consumer BTL and/or Let To Buy applications)
- less than 5-year fixed rate product taken - 125% at 7.94%
- 5-year fixed rate product or more taken - 125% at 6.04%
BTL Additional Borrowing (irrespective of product selected)
Higher rate taxpayers and BTL Portfolio Landlords
- 145% at 7.94%
Standard Rate taxpayers
- 125% at 7.94%
Where rent is being paid from a foreign source (i.e. not in £Sterling, IOM£ or Gibraltar£), it will not be used in the rental income calculation.
All repayment types are acceptable. Interest Only is acceptable for the whole loan, with the sale of BTL property being the repayment vehicle. If interest only then maximum term is 25 years.
No criteria available for the selected letter
Policy
Where the interest coverage ratio (ICR) on the SBS security falls below 145%, we may consider the application where all the following conditions are met;
- Rental income cover is at least 110% @ 7.94% (or 6.04% if a fixed product of 5 years or more is required)
- Applicant’s Income is £45k minimum (or £60k for joint applications)
- Background BTL portfolio rental income covers at least 135% @ 6%
On TSM's where the LTV is 65% or below the Society will assess the property using the original file valuation (index linked) supported by an AVM.
Property
Assured Shorthold Tenancy Agreements (ASTs) are acceptable or, if in Scotland, a Private Residential Tenancy is acceptable.
A maximum of 4 tenants is allowed. Where there is any element of multiple occupancy, the maximum number of bedrooms acceptable is 4. We do not accept mandatory licensed HMOs.
Where the tenants are students, professionals or there is any element of multi-occupancy the Landlord must be experienced (a minimum of 12 months experience is required).
Corporate Lets are acceptable for a maximum of 3 years. The Landlord must be experienced (minimum of 12 months experience), and no sub-letting is permitted.
Where a premium lease exists, this is not acceptable. The corporate body must be responsible for the rent and can only use the property for their own letting use and not sub let. We will not accept applicants purchasing property and then creating a tenancy agreement with a letting company, who subsequently sub let to tenants.
All flats and maisonettes must be leasehold (feuhold in Scotland) with a minimum unexpired term of 85 on completion of the mortgage.
Freehold flats where the borrower will also own a share in a management company that owns the freehold are acceptable.
Freehold flats are not acceptable. The only exception to this is the purchase of freehold flats in Scarborough. Tyneside flats where there are reciprocating lease / freehold arrangements are also acceptable.
Commonhold properties are not acceptable to lend on, by the Society.
No criteria available for the selected letter
No criteria available for the selected letter
No criteria available for the selected letter
No criteria available for the selected letter
No criteria available for the selected letter
No criteria available for the selected letter