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A-Z Guidelines Criteria
A Accountants Qualifications

ICAEW, ICAS, CAI, ACCA, AIA, AAPA, CIPFA, CIMA, CIOT, AAT, IFA, ATT

Adverse Credit

SBI will not accept an application if there is history of any of the following:

  • Mortgage Arrears
  • Payment Holiday
  • Bankruptcy
  • Independent Voluntary Arrangement (IVA)
  • Company Voluntary Arrangment (CVA)
  • Administration Order
  • Debt Relief Order
  • Repossession
  • Payment Arrangement
  • Debt Management Programme.

 

SBI will accept applications with CCJ's/Defaults under the following scenario:

Up to one satisfied CCJ/Default up to £250 which has been satisfied in excess of 12 months, and/or
Up to one outstanding/satisfied default up to £250.

In both of these examples SBI must be made aware of the exact reasons why the CCJ/default has been registered against them and six months bank statements provided as evidence that there are no issues with the applicants’ cash flow.

Age Requirements

Minimum Age - 21 years at application

Maximum Age - The term of the mortgage must not extend beyond any applicants 80th birthday

Aggregate Borrowing

Maximum Loan Exposure - £3,000,000

Arms-Length Transactions

SBI will not consider any transaction where the purchase is not taking place at arms-length.

The only exception to this rule is where an individual is lookingto transfer the ownership of the property from their individual/s name(s) into an SPV Ltd Company, this is subject to the following criteria:

  1. The property must have been in the individual(s) ownership for at least 12 months
  2. The transaction must be taking place as a purchase, with the acting solicitor providing confirmation of this along with confirmation of the stamp duty being paid
  3. There must be a suitable insolvency indemnity policy in place (to protect SBI's interest) at completion, in view that the transaction is not taking place at arms length
  4. The purchase price must be approximate to the value provided by SBI's surveyors on their report
  5. The existing owners must be named as shareholders/directors of the SPV company looking to complete the purchases
  6. If the deposit is coming by the way of a loan from the directors to the purchasing company, then a deed of subordination must be completed
B Back to Back Transactions SBI will only consider a remortgage application once a clear Land Registry search has been conducted by SBI evidencing the applicant’s ownership of that property for a period of twelve months. Likewise for a new purchase application the existing vendor must have owned the property for a minimum of twelve months (with the exception of new build properties which will not yet have been registered at Land Registry).
Builders Deposits & Sales Incentives Any sales incentive must be deducted from the purchase price when LTV is calculated
C Case Submission All applications must be submitted electronically in addition to a signed application form and ALL supporting documentation. Access to our online system is available by contacting your SBI Business Development Manager.
CCJs/Defaults

Up to one satisfied CCJ/Default up to £250 which has been satisfied in excess of 12 months, and/or
Up to one outstanding/satisfied default up to £150.

In both of these examples the Bank must be made aware of the exact reasons why the CCJ/default has been registered against them and six months bank statements provided as evidence that there are no issues with the applicants’ cash flow.

Company Applications (SPV/LLP) Applications will be accepted from UK incorporated Limited Companies or Limited Liability Partnerships, established by private individuals, whose sole activity is the purchase and/or re-mortgage of residential property for letting. All company directors, partners, shareholders or members must be named on any application in a company name.
Company Criteria (SPV/LLP)

Lending can only be considered to Ltd/LLP Companies.  We cannot lend to Trust’s, Offshore Companies etc.;
All Directors/Members/Shareholders must be named on the account, with a maximum of four permitted;
Business type must only be the purchase/remortgage and letting of properties in the UK evidenced both by the trading accounts and the SIC code recorded at Companies House;

Business must have been profitable for the last 2 years and have a clear credit history (exceptions may be considered for companies with less than a 2 year trading history subject to all Directors/Members/Shareholders being named on our company search and the principal applicant must be an existing BTL investor).

Consultants/Contractors

Contract workers are accepted under the following criteria:

12 Months or More

  • Current contract must have at least 6 months remaining, or evidence of a new or renewed contract for 12 months, AND
  • The previous contract(s) must be provided and demonstrate continous employment for 12 months

6 to 12 Months

  • Current contract must have at least 3 months remaining, or evidence of a new or renewed contract, AND
  • The previous contract(s) must be provided and demonstrate continous employment for 24 months.
  • Gross Income must be a minimum of £70,000 (when annualised)

Less than 6 Months

  • Not Acceptable

SBI will also not accept ANY applicant under the following contract types:

  • Seasonal Contract
  • Zero Hours Contract (also known as Piecework)
  • Agency Staff
  • Part Time Contracts
  • Fixed Term Contracts below 6 months
Consumer Buy to Let SBI does not accept any mortgage application that could be classifed as a Consumer BTL
Criminal Convictions

SBI will not accept any application where the applicant, or a financial associate, has a criminal conviction or prosecution pending, unless:

  • The conviction or pending prosecution is for a minor traffic offence;
  • The conviction is considered "spent" under the Rehabilitation of Offenders Act 1974.
D Deposit

Where a property is being purchased, the applicant/s are required to provide a deposit of at least 25% of the purchase amount. The amount and source of deposit must be declared on the application and evidence provided to ensure that we understand the full nature of the transaction. The deposit would be expected to be provided from one, or a combination, of the following sources, and be evidenced in the following manner:

Applicants Own Savings

  • Latest month bank or savings statement showing the required balance taking into consideration any other anticipated costs i.e. Stamp Duty, Solicitors fees. If the funds have not been in the account for 1 month the source of these monies must be confirmed.

Sale of Existing Property (one of the following:)

  • Copy of bank statement showing sale proceeds; or
  • Copy of the completion statement from the solicitor with full details of the property; or
  • Letter from the acting solicitor confirming that the sale is currently going through and a Land Registry search to evidence ownership.

Equity release from an existing property

  • Copy of bank statement showing equity release proceeds; or
  • Copy of existing mortgage statement and new mortgage offer evidencing equity being drawn on; or
  • Letter from the acting solicitor confirming that the equity release mortgage is currently going through, confirmation of the funds being raised and a Land Registry search to evidence ownership.

Gifted Deposits
A declaration from the donor (see ‘Gifted Deposits’) and evidence of the donor monies in the format outlined in this section. Only gifts from immediate relatives are considered acceptable.

UK Limited Company
A letter from the company accountant confirming how the monies are being taken from the Ltd Company and that the shareholders/directors will not have an interest in the property, together with the most recent set of accounts and last 3 months business bank statements evidencing sufficient funds to be drawn upon. If monies are being taken as a loan then this is not acceptable (see SPV Directors Loan section below which confirms that a loan is acceptable when the borrower is an SPV).

SPV Directors Loan
Where we are lending to an SPV and the deposit is being loaned to the SPV from the director/s of the organisation, it will be acceptable to SBI on the provision that a Subordination Deed is signed by the director/s prior to release of funds. The subordination deed ensures that the repayment of SBIs debt takes priority over any loan that may have been provided to fund the initial purchase.

Direct Debit Monthly mortgage payments are to be made by Direct Debit from a bank account in the name of the applicant/s.
Documentation Requirements All supporting documents provided must be certified as ‘a true copy of the original’ (or similar wording).  Documents can be certified by an FCA Regulated Mortgage Intermediary, a UK Solicitor registered with the Law Society or SBI Branch Staff.  The documents must be:

Valid and in date (bank statements can be no older than 1 month, bills can be no older than 3 months)
Certified as a true copy of the original (and true likeness if photographic ID)
Stamped, signed & dated by the named certifying party together with the FCA registration number if an intermediary.

E Employment Period Employed - Must have been either employed by the same employer for a minimum of 6 months or have been in continuous employment for the last 2 years
Self-Employed - Must have been self-employed for a minimum of 2 years.
Contractors - Acceptable under certain circumstances.  For example we cannot accept contracts that are seasonal contracts, zero hour contracts or agency staff.  Please refer to State Bank of India for comprehensive details.
Retired - Must meet minimum income requirements from pensions.
Employment Status Can accept employed, self-employed (where 20% or more of a company is owned), contractors and retired applicants.
Ex-Local Authority Ex-local authority houses are acceptable.
Ex-local authority flats will only be considered if they are located in super-prime residential areas and subject to a strong supportive valuation
Ex-Pats

In order to accept an application from a Non-UK Resident (Ex-Pat) the following requirements must be met:

  • British Passport holder with British Citizenship as nationality
  • For employed applicants, Confirmed employment with a company registered in their location
  • If Self-Employed, confirmation that they are registered in their location
  • Valid UK bank account
  • Minimum income of £40,000 per annum (£100,000 Self-Employed)
  • Own at least one another current property (residential or investment) in the UK
  • No adverse credit
  • Must work at a low or medium risk country as per the SBI AML matrix
  • If possible a locally generated credit reference check should be provided

Income must be verified in any of  the following way, subject to employment type:

  • Employed: 3 month’s payslips and letter from employer confirming job terms
  • Self-Employed: Last 2 years accounts from a valid accountancy firm
  • Contract: As per SBIUK  policy, plus confirmation letter from employer (in English)

Exposure The maximum exposure with the Bank is 25 properties or £3,000,000.00, whichever comes first (consideration may be given to greater exposure levels subject to full assessment).
F First Legal Charge

All mortgage lending must be secured by a legal charge with first priority over a property located in England (including the Isle of Wight) or Wales. SBI does not currently offer secured lending facilities against properties located in Scotland, Northern Ireland, Isle of Man, Isles of Scilly or The Channel Islands.

The legal charge must be:

  • Fully enforceable.
  • Entered into by all legal owners of the property.
  • Have full effect against all other charges and interests in the property.

SBI will not lend if another party's charge or interest has priority over ours.

If a second charge is already present at application it must be discharged prior to completion of our loan. A letter from the lender in question must be provided confirming that the loan has been repaid. A land registry search must be conducted before completion confirming that the charge has been removed.

First Time Buyers

For assessment purposes SBI classifies any applicant who does not own their current main residence as a "first time buyer". In most cases an application from someone who is a first time buyer will not be acceptable. However SBI will accept an application from a "first time buyer" in the following circumstances:

  • If they are already an existing BTL investor, meaning that they must own at least one additional BTL other than the one being mortgaged to us (this rule applies to all applicants if the application is joint), OR
  • Joint applications from Husband & Wife (or where the relationship has the same characteristics as Husband & Wife) where only one of the joint applicants owns their current main residence
First Time Landlords The Bank will accept applications from first time landlords as long as they own a residential property.
Foreign Embassy Staff & Diplomats

All applications from non-UK applicants employed in a Foreign Embassy are unacceptable and should be declined. Members of staff employed at Foreign Embassies can claim diplomatic immunity from legal action in the UK, and the nature of their positions can leave them exposed to having to leave the Country at short notice.

UK Nationals employed by any Embassy in the UK cannot claim diplomatic immunity from legal action, and therefore are exempt from this restriction in policy.

Further Advance Applications At present SBI Does not consider any further advance application requests.
G Gifted Deposit

SBI will only accept a genuine gifted deposit if the gift is being provided by an immediate family member (spouse, parents, grandparents, children, and siblings), subject to the following conditions:

  • The person providing the gift is an immediate family member.
  • The gift is being provided without any repayment terms and with no expectation of the amount being repaid at any time in the future, including from the proceeds of the sale of the property.
  • The gift is a genuine gift and is not proposed to be secured by a Deed of Trust or a Second Charge.
  • The donor must not have any current financial interest in the property to be purchased.
  • The donor will not acquire any interest in the property.
  • The donor does not currently occupy the property and/or will not occupy the property following completion.
Guarantor Mortgages SBI does not accept Guarantors on Buy to Let mortgage applications.
I Identity/KYC Requirements

Each applicant must provide two forms of documentation, one from list A and one from list B:

List A

  • Current full signed UK passport.
  • Full UK driving licence (new style photo card) - Address detail must be current.
  • Provisional UK photo card driving licence (new style) - Address detail must be current.
  • Full UK driving licence (old style paper) - Address detail must be current.
  • Foreign Driving Licence - Photocard only.
  • Current full signed foreign passport.
  • National Identity Card - Incorporating signature and photograph

List B

  • Bank/Building Society/Credit Card Statement - Must be less than 3 months old (internet statements are not acceptable).
  • Utility Bill - Must be less than 3 months old (mobile phone statements & internet utility bills are not acceptable).
  • Latest Council Tax Demand - Must be less than 1 year old.
  • Latest UK Mortgage Statement for applicants' main residence - Must show credit transactions and be less than 1 year old.
Incentives Any sales incentive must be deducted from the purchase price when calculating acceptable LTV
Income

Individual loans up to and including £500,000
Sole Applicant Minimum gross income of £25,000.
Joint Applicant At least one of the applicants must have a minimum gross annual income of £25,000.

Aggregate borrowing up to and including £1,000,000
Sole Applicant Minimum gross income of £25,000.
Joint Applicant At least one of the applicants must have a minimum gross annual income of £25,000.

Aggregate borrowing above £1,000,000
Sole Applicant Minimum gross annual income of £40,000.
Joint Applicant Minimum combined gross annual income of £40,000.
At least one of the applicants must have a minimum gross annual income of £30,000.
Individual loans above £1,000,000 Sole & Joint applicant At least one of the applicants must have a minimum gross annual income of £50,000.

Income Types Employed - Salary, Bonus, Commission, Overtime, Secondary Employment, Vehicle & Large City Weighting Allowances are all allowable sources
Self Employed – An average of the last two years’ dividends, remuneration and salary must be used to calculate income.  If the latest year’s income has reduced then only that year’s figure should be used, not the average.  By exception the Bank will consider using the applicants’ share of the retained net profit.
Retired - Private & State Pensions
Internet Statements Internet bank statements will be acceptable under the following circumstances:

Stamped by Issuing Bank
Internet statements for UK bank accounts will be accepted if they show the name of the customer, sort code & account number and if they have been stamped by the issuing bank as a 'certified true reflection of the transactions' (or similar wording) together with the banks staff name, staff number, signature and date.

Not Stamped by Issuing Bank
Internet statements for UK bank accounts will be accepted if they show the full name of the customer (not just initial for forename), sort code & account number and are provided as a full 3 months together with 3 months' payslips and P60 where we can verify the salary credits against the payslips and the national insurance number from the payslips against the P60 (this is not an available option if the applicant is self-employed).

Printed in SBI Branch
Internet statements for UK bank accounts will be accepted if they show the name of the customer, sort code & account number and have been printed in an SBI UK branch in front of a member of SBI UK bank staff and they have certified the document as a 'true copy of the original and a true reflection of the account as seen by them' (or similar wording).

If one of the above scenarios cannot be met then postal copies will need to be requested by the applicant.

Internet bank statements cannot be used under any circumstance as proof of an applicant's address.
L Large Loans Loans above £1,000,000 are defined as large loans and are subject to additional underwriting requirements.  Due to the concentration risk associated with properties and loans of this size, the additional underwriting requirements will ensure that only the appropriate quality application profiles are accepted and suitable property is considered as security. These loans will be considered under a specialist range and priced accordingly.

Maximum LTV - 60%
Minimum Income - £50,000pa
Let to Buy SBI does not accept Let to Buy applications
Loan to Value (LTV) Loan between £35,000.00 and £500,000.00 - 75% LTV.
Loan between £500,001.00 and £1,000,000.00 - 65% Maximum LTV.
Loan between £1,000,001.00 and £1,500,000.00 - 60% Maximum LTV.
Loan between £1,250,001.00 and £3,000,000.00 - 50% Maximum LTV.
M Maximum Number of Borrowers Up to 4 applicants
Mortgage Arrears If the credit search or mortgage statement provided reveals no more than one missed or late payment this can be considered in the context of the application but must be supported by an explanation from the customer together with evidence that the late/missed payment did not occur as a result of an inability to pay.
Mortgage Offer Mortgage offers are vaild for 6 months from the date of issue, or the expiry of the valuation report (6 months from inspection)
N Non arms length We will not consider any transaction where the purchase is not taking place at arms-length.
Non-UK Residents

There are however two scenarios where an application from an applicant who is resident outside of the UK will be accepted:

  1. An existing SBI customer. They must also have at least one UK residential investment (either a residential or buy to let) and must have a UK address (not a PO Box Address) provided by the applicant with a declaration that any correspondence sent to the UK address will be treated as received and accountable. LTV is restricted to 60% for non-UK residents.
  2. A UK ex-pat who is employed by a recognisable multi-national company and who can access an SBI foreign office to conduct a personal credit report and KYC check. All supporting documents must be certified by the SBI foreign office. The applicant must also have at least one UK residential investment (either a residential or buy to let). LTV is restricted to 60% for non-UK residents.
P Portability SBI does not at present offer a portability option.
Portfolio Landlord (Definition)

SBI considers any applicant who owns a BTL portfolio of four or more mortgaged properties a "Portfolio Landlord". Likewise an applicant who owns less than four mortgaged BTL properties, but as a result of any application/s to SBI UK will exceed four properties, will also be treated as a "Portfolio Landlord".

Applicants (including Director/Shareholders/Members if Ltd/LLP Company application) who meet the definition of a portfolio landlord must (in addition to ordinary case requirements) provide the following documentation:

  1. Full schedule of BTL properties in SBIs approved format (all properties where the current pay rate is below 5% will be stressed at 5% or 2% above the current interest rate (whichever is lower), all properties where the current pay rate is above 5% will be stressed at the pay rate. These stress rate rules are with the exception of any properties being remortgaged to SBI which must meet the rules outlined in the "Rental Cover Assessment" section of this policy). For individually owned properties the coverage required is 145%, for company owned properties the coverage required is 125%.
  2. Declaration from the applicant/s detailing their existing experience in the buy to let market. This should include details of how long they have owned BTL properties, whether the properties are professionally managed, the types of properties they own/have owned and why, the target tenant type, and the reason why any particular location has been targeted.
  3. A full assets and liabilities statement from the borrower (excluding properties detailed to us in the schedule of BTL properties).
  4. A business plan which gives reference to short and long term strategic objectives, any planned expenditure to the properties or further property expansion, details of how any long term rental voids would be covered, and their understanding of the current BTL market.
Portfolio Landlord (Requirements)

Applicants (including Director/Shareholders/Members if Ltd/LLP Company application) who meet the definition of a portfolio landlord must (in addition to ordinary case requirements) provide the following documentation:

  1. Full schedule of BTL properties in the Banks approved format – Download Here.
  2. Declaration from the applicant/s detailing their existing experience in the buy to let market. – Download Here.
  3. A full assets and liabilities statement from the borrower (excluding properties detailed to us in the schedule of BTL properties).Download Here.
  4. A business plan which gives reference to short and long term strategic objectives, any planned expenditure to the properties or further property expansion, details of how any long term rental voids would be covered, and their understanding of the current BTL market. Download Here.
Portfolio Landlords Portfolio Applicants (including Director/Shareholders/Members if Ltd/LLP Company application)  must provide the following documentation:

1. Full schedule of BTL properties in the Banks approved format (all properties where the current pay rate is below 5% will be stressed at 5% or 2% above the current interest rate (whichever is lower), all properties where the current pay rate is above 5% will be stressed at the pay rate.  These stress rate rules are with the exception of any properties being remortgaged to SBI which must meet the rules outlined in the ‘Rental Cover Assessment’ section of this policy).  For individually owned properties the coverage required is 145% (or 125% if the applicant(s) is a lower rate taxpayer), for company owned properties the coverage required is 125%.

2. Declaration from the applicant/s detailing their existing experience in the buy to let market.  This should include details of how long they have owned BTL properties, whether the properties are professionally managed, the types of properties they own/have owned and why, the target tenant type, and the reason why any particular location has been targeted.

3. A full assets and liabilities statement from the borrower (excluding properties detailed to us in the schedule of BTL properties).

4. A business summary of the Borrower which gives reference to short and long term strategic objectives, any planned expenditure to the properties or further property expansion, details of how any long term rental voids would be covered, and their understanding of the current BTL market.

Standard bank templates have been created and must be used to satisfy the four items above (BTL Property Schedule, Assets & Liabilities Statement & Portfolio Landlord Supplementary Information Form)
Power of Attorney

SBI does not accept any of the following:

  • A new loan application either signed or submitted by an Attorney on behalf of an applicant.
  • Any request by an Attorney to change any details of an application that is currently in the pipeline.
  • Any request to change details from an Attorney that has been appointed by an applicant after the date of the application.
Private Sales

Buyer to provide reasons why the purchase is occurring as a private sale (or inter-family purchase as it is sometime known), this will require them to sign a declaration confirming the following:

  • The transaction is not being done to avoid BKO, IVA, Repossession or NPA on the part of the seller
  • Once the transaction is complete there will be no other individuals/companies who claim rights over the proposed security
  • That all information provided regarding the transaction is to the best of their knowledge accurate and not misleading
  • That all parties to the sale will be receiving independent legal advice
  • That the property will be purchased as a Vacant Possession or tenanted to third party and that the seller will not occupy the property after completion

As the property is likely to be purchased at a different price that it would on the open market, the following checks & requirements will need to be met:

  • A standard valuation will be instructed that will provide SBI with an ‘Open Market Valuation (OMV)’
  • SBI will restrict LTV to 75 % of the Purchase Price or OMV, whichever is the lowest
  • The applicant will then need to supply evidence that they have the additional deposit funds to complete the purchase
  • Alternately if the applicant is being sold the property at the OMV, then SBI would lend 75 % of the OMV with the remaining balance covered by a ‘Gifted Deposit’ from the seller who would need to confirm in writing:
  • Equity is gifted with no requirement to repay/no charge
  • Seller waives all future rights to the property

Procuration Fee

Non-SPV/LLP/Ltd Co BTL, Appointed Representatives (AR) cases – 0.50% (up to a maximum of £6,000.)

Non-SPV/LLP/Ltd Co BTL, Directly Authorised (DA) cases – 0.45% (up to a maximum of £6,000.)

SPV/LLP/Ltd Co BTL, DA and AR cases – 0.75% (Up to maximum of £10,000.)

Property - Construction

Please refer to the "Property and Valuation Policy Manual" for full details of the acceptable and unacceptable types of construction. Download Here

Property - Flats Freehold Flats/Maisonettes – Where the tenure of any flat or maisonette is freehold this will not represent suitable security to SBI.

High Rise Blocks – Flats which are located in blocks that are six stories or more are defined by SBI as "High Rise" and are generally not considered to be acceptable security for SBI. Exceptions can be considered where the property is in a prime residential location and there is a lift service available OR if the flat is deemed to be in a super prime "prestigious" development without a lift service.

Ex-Local Authority Flats/Maisonettes – These types of properties are generally not considered to be acceptable security for the Bank.  Bank may consider flats in a block where at least 50% of the block is under private ownership; confirmed by the valuer that 50% of the block is under private ownership . Exceptions may be considered in super-prime residential areas and subject to a strong valuation (for example Brunswick Centre, WC1) or prime areas of Central London with a supportive valuation

Studio Flats – Again these types of properties are generally not considered to be acceptable security for the Bank.  Exceptions may be considered for studio flats in prime residential areas provided that the internal floor area is not less than 22 square metres in London, Birmingham and Manchester and not less than 30 square metres in other locations, provided there is a separate bathroom and the kitchen facilities and sleeping area are in separate rooms.

Independent Access – Flats which do not have their own independent & unimpeded access, or that are not fully self-contained are unacceptable to SBI.

Commercial Premises – Flats above certain commercial premises will not be acceptable to SBI. Additionally flats which are not directly above but near to commercial premises which could have a detrimental impact will also not be considered.
Property - Location SBI will only consider property that is located in mainland England (including the Isle of Wight) and Wales. SBI will not consider any property located in Scotland, Northern Ireland, the Isle of Man or the Channel Islands (Jersey, Guernsey, Alderney, Sark, and Herm).
Property - Multiple Units SBI will consider freehold houses which have been sub-divided into no more than 3 units and the conversion works have been completed with the appropriate planning permission and building regulation approvals. Each unit must have its own separate access and facilities.
Property - New Build

To protect SBI's interest, lending on new build and newly converted properties (a property built/converted within the last 12 months or being sold/registered for the first time) will be subject to the following loan to value (LTV) restrictions:

  • New build and newly converted flats/apartments, LTV will be restricted to 60%.
  • All other new build and newly converted properties, LTV will be restricted to 65%.
Property - Tenure SBI will consider lending against properties that are either Freehold or Leasehold. Commonhold is not an acceptable tenure type to SBI.
Property - Unacceptable
  • Properties with Agricultural Restrictions/Ties;
  • Bedsits (unless under HMO product & policy);
  • BISF (British Iron and Steel Federation) properties;
  • Colt Bungalows;
  • Properties immediately adjacent to A3 commercial or any commercial which deters purchaser/tenants;
  • Commonhold tenure;
  • Max 15% Flying Freehold;
  • Properties with a granny annexe;
  • HACC (High Alumina Cement Concrete) properties;
  • Holiday Lets;
  • Hoop Iron Built properties;
  • Houseboats;
  • LPS (Large Panel System) construction;
  • Mixed use properties;
  • Multiple kitchens ;
  • "Rent to Buy" or "Right to Buy" properties;
  • Shared Ownership;
  • Steel Framed and Clad properties;
  • Timber Clad (e.g. Swedish Timber Properties)
Property - Value

Properties in London (with a London postal code) must have a minimum value of £150,000.
Properties outside of London must have a minimum value of £75,000.

Where SBI is lending against a freehold house which has converted into flats, each flat must meet the minimum property value specified above.

London postcodes are considered to be all of those beginning with E, EC, N, NW, SE, SW, W, WC

Property Concentration Each applicant will be restricted to a maximum of 6 properties and in case of flats, 10 flats in one complete postcode.
Property Investment Club A property purchase which has been sourced through a Property Investment Club/Company is not acceptable security to SBI.
R Remortgages - Unacceptable

The following are unnacceptable reasons for remortgage to SBI:

  • Sale and rent back/sale and lease back arrangements.
  • The purchase of a timeshare property (there are regulatory requirements that would make the loan unenforceable if not complied with).
  • Business purposes, including debt consolidation, cash injection into a business, working capital, purchase of commercial premises or to purchase an interest in a Company.
  • Property development.
  • Investment in or purchase of property from a Property Investment Club.
  • The purchase of any equity investment, including stocks & shares, annuity or Home Income Plan.
  • Currency speculation.
  • Accident, Sickness & Unemployment (ASU) premiums.
  • To pay a tax bill or HMRC demand.
  • Short term lending or bridging finance.
  • Any purpose that is against the interests of SBI Group, or any purpose that would create a conflict of interests e.g. funding a customer's legal action against SBI.
Rental Cover Assessment A minimum rental income cover of 145% of the mortgage interest must be confirmed for all Buy to Let loans to private individuals, unless they are a lower rate taxpayer in which case a rental income cover of 125% will apply. A minimum of 125% of the mortgage interest must be confirmed for all Buy to Let loans to SPV Ltd/LLP Companies. Please see current product guide for details of stressed interest rates that will be applied
Rental Coverage (Specialist Products) 5 Year Fixed Rate - 125% of monthly interest payments at product pay rate
5 Year Fixed Rate (Lower Rate Taxpayer) - 125% of monthly interest paymentsat product pay rate
Other Products - 125% of monthly interest payments at Product Rate + 2% or 5.50% (whichever is higher)
Other Products (Lower Rate Taxpayer) - 125% of monthly interest payments at Product Rate + 2% or 5.50% (whichever is higher)

Remortgage 5 Year Fixed Rate - 125% of monthly interest payments at product pay rate
Remortgage 5 Year Fixed Rate (Lower Rate Taxpayer) - 125% of monthly interest payments at product pay rate
Remortgage 5 (Like for Like) Year Fixed Rate - 125% of monthly interest payments at Product Pay Rate
Remortgage (Like for Like) 5 Year Fixed Rate (Lower Rate Taxpayer) - 125% of monthly interest payments at 5.00%

Remortgage Other Products - 145% of monthly interest payments at Product Rate + 2% or 5.50% (whichever is higher)
Remortgage Other Products (Lower Rate Taxpayer) - 125% of monthly interest payments at Product Rate + 2% or 5.50% (whichever is higher)
Remortgage (Like for Like) Other Products - 145% of monthly interest payments at 5.00%
Remortgage (Like for Like) Other Products (Lower Rate Taxpayer) - 125% of monthly interest payments at 5.00%
Rental Coverage (Standard Products) 5 Year Fixed Rate - 145% of monthly interest payments at product pay rate
5 Year Fixed Rate (Lower Rate Taxpayer) - 125% of monthly interest payments at product pay rate
Other Products - 145% of monthly interest payments at Product Rate + 2% or 5.50% (whichever is higher)
Other Products (Lower Rate Taxpayer) - 125% of monthly interest payments at Product Rate + 2% or 5.50% (whichever is higher)

Remortgage 5 Year Fixed Rate - 145% of monthly interest payments at product pay rate
Remortgage 5 Year Fixed Rate (Lower Rate Taxpayer) - 125% of monthly interest payments at product pay rate
Remortgage 5 (Like for Like) Year Fixed Rate - 145% of monthly interest payments at Product Pay Rate
Remortgage (Like for Like) 5 Year Fixed Rate (Lower Rate Taxpayer) - 125% of monthly interest payments at 5.00%

Remortgage Other Products - 145% of monthly interest payments at Product Rate + 2% or 5.50% (whichever is higher)
Remortgage Other Products (Lower Rate Taxpayer) - 125% of monthly interest payments at Product Rate + 2% or 5.50% (whichever is higher)
Remortgage (Like for Like) Other Products - 145% of monthly interest payments at 5.00%
Remortgage (Like for Like) Other Products (Lower Rate Taxpayer) - 125% of monthly interest payments at 5.00%
Rental Income 75% of the net UK Property income (after all deductions/expenses) can be used as part of the Banks income assessment. This income must be evidenced by way of the last 2 years HMRC SA302's. However, by exception, if the applicant has trading accounts produced by a suitably qualified accountant and from this the Bank understands the setup and gearing of this portfolio, we will accept 100% of this income
Repayment Methods SBI accepts the following methods: Repayment, Interest Only, Part & Part
Repayment Strategy (Interest Only)

Interest only and part & part repayment methods are acceptable for all SBI Buy to Let loans. Applicants must have a plausible repayment strategy for repaying the loan and will remain responsible for repaying the debt at the end of the mortgage term, regardless of the performance of their repayment plan.

Acceptable repayments methods for SBI Buy to Let loans are listed below:

  • Individual savings account
  • Endowment policy
  • Investment plan
  • Savings
  • Sale of subject property
  • Sale of another property
Replacement Property If the applicant wishes to change the property during the application process, then a new application must be submitted and assessed in line with our latest lending policy.
Residency All applicants must have been resident in the UK for the last 2 years (exceptions may be considered for a UK ex-pat who is employed by a recognisable multi-national company and who can access an SBI foreign office to conduct a personal credit report and KYC check. All supporting documents must be certified by the SBI foreign office. The applicant must also have at least one UK residential investment (either a residential or buy to let). LTV is restricted to 60% for non-UK residents).
Retentions SBI does not offer any type of retention facility
Retired Applicants

For all Buy to Let Applications the income of the principal applicant only will be assessed. The principal applicant can be any one from the named applicants, who must meet the specified income requirements as per this policy document.

SBI's minimum income requirements must be derived only from acceptable sources, which are detailed below:

  • Private Pension.
  • State Pension.

We will not consider additional income from Investments, Shares, or Interest

S Sale and Rent/Sale and Lease SBI will not accept any application in the UK which involves a sale and rent back or sale and lease back arrangement.
Self Employed - Applicants

The applicant is considered self-employed if they fall in to any of the following categories:

  • They are a Sole Trader
  • They are a Partner in a Partnership
  • They have a shareholding of 20% or more in a Ltd Company
  • They are a member of a Limited Liability Partnership (LLP)
  • The applicant is directly related to a Principal of the business that employs them (in these circumstances the Company Accountant must confirm the applicant's income, in addition to the applicant providing their latest two years' P60).
Self Employed - Ltd Co Shareholder

Evidence of income must be in the form of:

  • Last 2 years trading accounts produced and signed by a suitably qualified accountant (refer to accountants qualifications section of policy), AND
  • Last 2 years receipted postal HMRC SA302's or the last 2 years online tax year overviews together with 2 years online tax calculations. This is expected to show a tax reference and have the covering letter from HMRC confirming the same reference.

The total of the applicants’ dividends, remuneration and salary will be used to meet SBIs minimum income requirement.

An average of the last two years’ dividends, remuneration and salary must be used to calculate income. If the latest year's income has reduced then only that year's figure should be used, not the average.

Self Employed - Partnership

Evidence of income must be in the form of:

  • Last 2 years trading accounts (if available) produced and signed by a suitably qualified accountant (refer to accountants qualifications section of policy), AND
  • Last 2 years receipted postal HMRC SA302’s or the last 2 years online tax year overviews together with 2 years online tax calculations.

The applicants' share of taxable net profit will be the figure used to meet SBIs minimum income requirement.

Self Employed - Sole Trader

Evidence of income must be in the form of:

  • Last 2 years trading accounts (if available) produced and signed by a suitably qualified accountant (refer to accountants qualifications section of policy), AND
  • Last 2 years receipted postal HMRC SA302’s or the last 2 years online tax year overviews together with 2 years online tax calculations.

The taxable net profit will be the figure used to meet SBIs minimum income requirement.

SPV/Ltd Co - Business Activities

SBI only lends to companies that have experience in the market and conform to this profile the following conditions apply:

  • The company must be incorporated in the UK, by private individuals.
  • The company’s sole activity is the purchase and/or remortgage of residential property for letting.

This must be confirmed by the SIC code registered at Companies House. The following SIC (2007) codes are acceptable:

  • 68100 – Buying and selling of own real estate.
  • 68209 – Other letting and operating of own or leased real estate.
  • 68320 – Management of real estate on a fee or contract basis.

In addition, the following historic codes under SIC (2003) are also acceptable:

  • 7012 – Buying and selling own real estate.
  • 7020 – Letting of own property.
  • 7032 – Manage real estate.
SPV/Ltd Co - Individual to SPV Transfer

SBI will consider these transactions, but they must meet with the following criteria:

  • The property must have been in the individuals ownership for a period of at least 12 months;
  • The transaction must be taking place as a purchase, with the acting solicitor providing confirmation of this along with confirmation of the amount of stamp duty being paid;
  • There must be a suitable insolvency indemnity policy in place (to protect SBIs interest) at completion, in view that the transaction is not taking place at arms-length;
  • The purchase price must be approximate to the value that has been independently provided by SBIs surveyor on their report;
  • The existing owners must all be named as shareholders/directors of the SPV Company looking to complete the purchase.
  • If the deposit is coming by way of a loan from the directors to the purchasing company, then a deed of subordination must be completed (refer to Deposit section of this policy).

Where the property transfer to the SPV has already taken place before submission of the case to SBI but within the last 12 month period, this will also be acceptable providing the above six principles have been met. The solicitor which dealt with the transfer will be required to provide the confirmations.

SPV/Ltd Co - Location of Company

All company applications must be from companies that are registered and based in the UK. Applications will not be accepted from any company based in any offshore location or jurisdiction, including:

  • Jersey
  • Guernsey
  • Isle of Man
  • British Virgin Islands
  • Any other offshore or tax haven location
SPV/Ltd Co - Newly Formed Companies

Newly incorporated SPV Ltd/LLP companies will be accepted by SBI subject to the following conditions:

  • The company search must reveal full directors and shareholders details (off the shelf companies not permitted);
  • SIC code must meet the requirements of policy. If a SIC code is not available at assessment then it must be in place prior to completion.
SPV/Ltd Co - No of Directors/Members

The maximum number of directors, shareholders or members that can be accepted on a Buy to Let application in a company name is four, subject to the following conditions:

  • All company directors, shareholders and members must be named and party to the application, and must have signed our application form;
  • Any company with more than four differing directors, shareholders or members will not be accepted;
  • All directors, shareholders or members must be private individuals;
  • All directors, shareholders or members must sign the application form.

It is acceptable for a company to have shareholders that are not directors and vice-versa, but all directors, shareholders and members must be party to the application.

SPV/Ltd Co - Security & Registration of Charges

SBI will insist on the following:

Personal Guarantees
To protect SBI's interests full Personal Guarantees will be required from all Directors, shareholders and members.

In addition all Directors, shareholders and members will be required to obtain Independent Legal Advice prior to completion of the loan. The solicitor will be instructed to provide a letter confirming that each Director, shareholder and member has received independent legal advice and a special condition will be added to the mortgage offer to ensure that this is enforced.

Fixed Legal Charge
SBI's fixed legal charge must be a first legal charge ranking in priority over all other charges.

Floating Charge (Debenture)
A floating charge takes security over assets and material that may fluctuate over time, such as stock, but can also relate to property. When a Company uses floating charges it does not affect their ability to use the stock or assets under the charge as normal.

Sub-Sales If SBI are aware that a sub-sale is taking place, then SBI is not able to consider the transaction under any circumstances.
T Tenancy The Bank will only consider propositions where the intended tenant(s) are single family units on one tenancy agreement.
The Bank will not consider: Student lets or any similar multiple tenancy proposal, DSS tenants, Local Authority/Housing Association Leases and letting to family members.

There are three tenancy types which are acceptable to the Bank:
Assured Shorthold Tenancy (AST)
This is subject to a maximum length of 12 months remaining to ensure that the Bank is provided with adequate protection and enforcement rights in the event of possession.  If the tenancy term was initially greater than 1 year and it has more than 12 months remaining this will also be acceptable if the agreement includes a break clause allowing 2 months’ notice to terminate the agreement.
High Rent Tenancies
The Bank will accept a ‘Common Law Tenancy’ where annual rental income exceeds £100,000 per annum. The tenancy agreement will be acceptable subject to a maximum length of 12 months and a 6 month break clause.

Company Let Agreements
A tenancy agreement cannot be an assured shorthold where the tenant is a Limited Company. The Bank will consider Company Lets on a Common Law Tenancy Agreement only where the tenant is a recognisable blue chip company and subject to a maximum length of 12 months and a 6 month break clause.
Tenancy Agreement

SBI will only consider BTL properties which are occupied or intended to be occupied by no more than 4 tenants on a single tenancy agreement.

Any remortgage property presented to SBI must be either presently let or have had no more than a 3 month void period at the time of application.

Tenancy Agreement - Company Let A tenancy agreement cannot be an assured shorthold where the tenant is a Limited Company. SBI will consider Company Lets on a Common Law Tenancy Agreement only where the tenant is a recognisable blue chip company and subject to a maximum length of 12 months and a 6 month break clause.
Tenancy Agreement - High Rent Tenancies SBI will accept a "Common Law Tenancy" where annual rental income exceeds £100,000 per annum. The tenancy agreement will be acceptable subject to a maximum length of 12 months and a 6 month break clause.
Tenancy Agreement - Unacceptable Type

The following list is some typical examples of unacceptable tenancy types to SBI:

  • Tenancies of agricultural land or holdings
  • College accommodation
  • Holiday lets
  • Let to or occupied by an embassy or diplomat
  • Assured Tenancies
  • Regulated Tenancies (Sitting Tenancies)
  • Tenants in receipt of benefits
  • Regulated Buy to Lets
  • Sale and Rent Backs
  • Letting to Own Company
  • Premium Leases
Tenancy Agreements

There are three tenancy types which are acceptable to the Bank:

Assured Shorthold Tenancy (AST)
Most Buy to Let properties will be let under an AST Agreement.
It is a condition of loan that the property is let under an AST Agreement subject to a maximum length of 12 months remaining to ensure that the Bank is provided with adequate protection and enforcement rights in the event of possession.  If the tenancy term was initially greater than 1 year and it has more than 12 months remaining this will also be acceptable if the agreement includes a break clause allowing 2 months’ notice to terminate the agreement.

When the initial AST comes to an end and the tenant remains at the property, the tenancy will become a Statutory Periodic Tenancy.  This situation will only occur when neither the tenant nor the landlord wish to change the terms of the agreement.  The tenancy will roll on until either party decides to terminate the agreement or wish to vary the terms of the agreement.  The notice period will remain at two months for the landlord and one month for the tenant as per the minimum required under an AST.  A statutory periodic tenancy is acceptable to the Bank.

High Rent Tenancies
The Bank will accept a ‘Common Law Tenancy’ where annual rental income exceeds £100,000 per annum. The tenancy agreement will be acceptable subject to a maximum length of 12 months and a 6 month break clause.

Company Let Agreements
A tenancy agreement cannot be an assured shorthold where the tenant is a Limited Company. The Bank will consider Company Lets on a Common Law Tenancy Agreement only where the tenant is a recognisable company and subject to a maximum length of 12 months and a 6 month break clause.

The following list is some typical examples of unacceptable tenancy types to the Bank:-

  • Tenancies of agricultural land or holdings
  • College accommodation
  • Holiday lets
  • Let to or occupied by an embassy or diplomat
  • Assured Tenancies
  • Regulated Tenancies (Sitting Tenancies)
  • Tenants in receipt of benefits
  • Regulated Buy to Lets
  • Sale and Rent Backs
  • Letting to Own Company
  • Premium Leases.

Please refer to the “Property and Valuation Policy Manual” for full details.

Tenure Freehold or Leasehold only.
Term of Repayment

The minimum loan term available is 5 years and the maximum loan term is 25 years.

The maximum loan term of 25 years will be reduced in instances that the age of borrower exceeds age 80 at the end of the mortgage term.

Trustees Properties owned or managed under trust or under a Deed of Trust used to arrange property ownership as Tenants in Common are not acceptable security for SBI
U Undervalue Transactions SBI will only accept a transaction at undervalue if the property is being purchased at a reduced amount to facilitate a quick sale or because of a court order (such as divorce proceedings).
Unearned Income

The following list outlines the acceptable forms of unearned income which can be included in SBI's income assessment:

  • Rental Income (75% of the net UK Property income (after all deductions/expenses) can be used as part of SBIs income assessment. This income must be evidenced by way of the last 2 years HMRC SA302's. However, by exception, if the applicant has trading accounts produced by a suitably qualified accountant and from this SBI understands the setup and gearing of this portfolio, we will accept 100% of this income).
  • Attendance Allowance
  • Carer's Allowance
  • Constant Attendance Allowance
  • Disability Living Allowance (DLA) for Adults
  • Disability Living Allowance (DLA) for Children
  • Employment and Support Allowance (ESA)
  • Income Support
  • Industrial Injuries Disablement Benefit
  • Personal Independence Payment (PIP)
  • Reduced Earnings Allowance
  • State Pension
W Working for Family If the applicant is directly related to a principal of a business that employs them, we require the company accountant to confirm the applicant's income and their latest two years' P60.

Your Buy-To-Let Property may be repossessed and/or a receiver of rent appointed if you do not keep up payments on your mortgage