Our residential lending policy

The Society undertakes a thorough affordability assessment to ensure that we lend responsibly. How much you can borrow is calculated through a combination of your income, regular financial commitments and household / lifestyle expenditure and the term required at an agreed stressed rate to ensure that affordability still exists beyond the initial product rate.

In assessing affordability all unsecured loans / HPI agreements that have more than 6 months to run, credit cards and maintenance will be deducted. In addition, deductions to an applicant's disposable income will also be made for declared household and lifestyle expenditure which is compared against statistical data for accuracy. 

We request that you provide accurate details of your income and expenditure which will ensure a more accurate calculation. We also recommend that prior to beginning a Decision in Principle that you have ran through our affordability calculator to ensure that the loan is affordable.

If you have any questions regarding the use of the calculator please check our frequently asked questions section.

We understand that affordability can be a key challenge for many people, so that’s why we have a range of products to help.

Our Affordability Boost range offers a better affordability assessment for fixed-rate mortgages of longer than five years. This means you may be able to borrow more, depending on your financial situation.

This will be available for those who select a product term of more than 5 years and is not available for all lending types and cannot be combined with another product i.e. Interest Only, Large Loans, Shared Ownership, Government First Homes. 

Minimum age for applicants is 18. Maximum age for borrowers at the end of the loan term is 80.

• All applicants must have at least two years to serve.
• Where the applicant will also live in accommodation provided by M.O.D. then they must be able to support both the new mortgage and any associated living costs for the M.O.D. property. This must be factored into the affordability assessment.
• Where the applicant will be living in M.O.D. accommodation on a full time basis then the property to be purchased must be occupied by spouse/partner.
• Where it is a sole applicant purchasing the property it must be occupied on a full time basis. It must be plausible that applicant can commute to place of work on a daily basis unless on tour overseas.
• A 3 year residency history is required. BFPO addresses are acceptable.
• We will now accept applications where the source of deposit is from the government-supported Forces Help to Buy scheme which has now replaced the Long Service Award. Acceptance of the Forces Help to Buy scheme is subject to:
  • The Personal Information Note supplied to the applicant by the Ministry of Defence which details the conditions in which the loan is based must be provided with the application before a Binding Offer can be issued. This will detail the monthly payment and insurance premium to be paid.
  • The monthly payment and insurance premium to be paid by the applicant must be included as a monthly commitment for affordability purposes. This would be added as an unsecured loan to the online affordability assessment.

• Can accept cases where Bankruptcy, Sequestration, IVA or DRO have been discharged over 3 years, any less than that would be declined

• We will expect that the borrower's main residence is currently within the UK and that they will reside in the property whilst in the UK. We do not accept 'ex-pat' type scenarios where the applicant wishes to purchase a property in the UK and return at a later date.
• We will only consider applications where the applicant's spouse/partner or immediate family will be a permanent resident in the property. The property must not be left unoccupied for more than 30 days a year.
• If the applicant is required to pay for accommodation whilst working abroad then details of this must be disclosed during the application process and deductions made within the affordability assessment.
• We would normally expect to see salary paid into a UK bank account either direct or via transfer. The salary paid must be in UK sterling. We do not accept salary paid in any other currency as we do not currently lend for foreign currency loans (see below).
• The employer must be generally 'Blue Chip' for both UK and International companies.
• The max LTV for British nationals working abroad is 80%.

For those applicants who already have 1 or more investment mortgages we will consider up to 80% LTV on the basis that we receive:

• Evidence that the mortgage conduct on all investment mortgages is satisfactory with no missed payments. Sight of conduct via credit bureau data is acceptable.
• Rental income required for affordability - the rental income is to be input as income and the mortgage payment as a commitment to assess overall affordability.
• Rental income not required for affordability - the rental income received must cover the current mortgage payment by at least 145%. If there is a shortfall, this needs to be added as a commitment.
• Where applicants have a significant investment portfolio (greater than 5) then we would also expect to have sight of their Buy to Let (BTL) portfolio summary.
• Please see 'Let to Buy' for those applicants who are looking to rent out their existing property and purchase a new home to reside in through the Newcastle.
• Our full Buy to Let lending policy is available here.

• Contract workers are considered higher risk to the Society due to affordability concerns once a set contract period has ended. For this reason we would be looking for a track record of employment within the same sector for at least two years with no more than a 6 week break in-between contracts. This can be evidenced via the last two P60s / SA302s and TYO or accounts.
• Applicants who have fixed term contracts within professional occupations such as Doctors, Teachers and Solicitors, will be regarded as in permanent employment. Applicants from contract workers in other fields will be considered on their individual merits.

Day Rate Contractors

• We require sight of current and previous contracts covering the last 12 months.
• Applicants must have 12 month's experience as a contractor at the time of application.
• Current contract must have a minimum of 1 month remaining at the time of application or evidence of a new or extended contract must be requested.
• Contracts quoting a daily or weekly rate should be based on an assumed 46 week period for annual income.
• 1 month bank statement required as standard.

Umbrella Company/IR35 or Self Employed

• If paid via an umbrella company, the total gross pay showing on umbrella payslips may be broken down by basic salary, commission, 'additional taxable income', holiday pay etc. As long as the contract confirms the contractor is paid via a daily rate or hourly rate, the income does not need to be split into these separate elements and can all be keyed as basic salary.
• If applicant is PAYE (including IR35), income will be taken from the lower value of the latest contract or average of the last 3 months payslips. In addition, 1 month's corresponding bank statement is required along with evidence of 2 year track record.
• If applicant is self employed, income will be taken from the latest contract. Evidence of a 2 year track record is required. 

Fixed Term Contract/Recruitment Agency/Zero Hour Contracts/Nurse Bank Staff

• We will accept 100% of income providing a 2 year track record in the chosen industry can be evidenced by way of P60s or Tax Calculations and matching overviews. Please note for zero hour/nurse bank and agency we require 3 months’ payslips, where paid weekly, 1 full month equates to 4 weekly payslips.

CIS Workers

• Workers who are paid via the Construction Industry Scheme (CIS) can be considered subject to receipt of 2 years proof of income via SA302s and supporting documentation.

Teachers (ECT)

• Early Career Teachers (ECT previously named NQT), can only be considered if the applicant is into their second year of the programme.

Junior Doctors

• Junior Doctors currently in Foundation Year 1 are not acceptable; only Foundation Year 2 and onwards will be acceptable.

As part of our overall assessment, the Society will credit score all mortgage applications to assess the credit worthiness of applicants. 

Applicants will be credit scored at Decision in Principle stage.  This is a soft search and will not leave a footprint on their credit file.

The credit score will either accept, decline or refer applications to our lead underwriters for a manual assessment.

We offer Custom Build mortgages exclusively via BuildStore Mortgage Services who can be contacted on 0345 223 4888. Alternatively, visit their website www.buildstore.co.uk for more details. We offer Custom Build mortgages on the following basis:

• Purchase of land and traditional custom build projects
• Renovation and conversion projects
• Property types including terraced and semi-detached houses subject to an overall site assessment and input from panel valuer. Flats will not be considered at this stage.
• Traditional construction types will be considered. Modern methods of construction will also be considered subject to panel valuer input and suitable warranty and accreditation requirements.

We will consider lending up to a maximum of £1,000,000, however, this will depend on the LTV at the end of the build and loan to costs during the build. Please refer to the below:

• £0 to £500,000 up to 90%
• £500,001 to £750,000 up to 85%
• £750,001 to £1,000,000 up to 80%
• Interest Only can be taken during the build but can only be extended beyond build completion where there is a repayment strategy that meets our criteria and LTV does not exceed 75% / 80% part and part
• Minimum property value of £100,000 based on full completion
• Funds are released on a stage payments basis

Please contact BuildStore to discuss your requirements in full.

• If any active debt management is identified the case would be declined. If any debt management is shown on the credit report as settled and it was less than 12 months ago case would also be declined.

The Society will use credit scoring to determine whether to proceed with an application. Applications will normally be declined in the following circumstances:

• Current secured arrears or recent history of non payment
• Current unsecured arrears or history of delinquency in last 3 years
• Any type of unsatisfied CCJ or Default irrespective of amount (£)
• Any secured or unsecured credit related CCJ or defaults which have been satisfied within the last 3 years irrespective of when registered
• Any insolvency i.e. Bankruptcy / IVA / DRO that has been satisfied within the last 3 years
• Any evidence of previous or current property being repossessed
• We will not lend on cases where there is active debt management or evidence of any active debt collection payments and any debt management /collection programme must be settled for at least 12 months, with satisfactory credit record demonstrated since that time

Our underwriters may be willing to accept a maximum of 2 satisfied defaults/CCJs below £250 from utility companies, communications or mail order with satisfactory explanation within the last 3 years. This is still subject to the whole case being good quality.

Where an applicant has been employed for less than 6 months we may require sight of the employment contract. 

This is instead of an employment reference which can often lead to delays in processing the application.

If we deem it necessary, we may approach the employer for a more detailed response

Details of employment history for the past 12 months is required if the applicant has been with their current employer for less than 6 months or they are currently in a probationary period.

Where it has been established that the property is to be purchased at a discounted price then we can consider lending 100% of the purchase price subject to valuation.

Additional borrowing above the discounted purchase price can only be considered subject to funds being for home improvements only.  No capital raising for repayment of debt is allowed.

The acting solicitor must ensure that defective title indemnity insurance is arranged where a discounted purchase price is taking place. This protects the Society from future claims under the Insolvency Act.

The current occupant of the property would be expected to move out of the property. We will not accept a sitting tenant and the property must be vacant on completion with no charges /restrictions from previous owner remaining.

Maximum loan is £500,000.

We will no longer accept mortgage applications where a salary paid in a currency other than UK sterling is to be used for affordability purposes.

In addition, we will no longer accept other sources of income that are not UK sterling based i.e. rent received from overseas properties, overseas investments.

Where the loan is interest only or part interest only / part capital repayment we will not accept a repayment strategy that is based on assets that are held outside the UK.

EEA Nationals:

• EU/EEA/Swiss citizens (excluding Republic of Ireland) applying for a mortgage must currently reside in the UK and have settled status. However, if another party on the mortgage is a UK citizen, has a permanent right to reside, or has settled status, then pre-settled status would be acceptable up to 95% LTV.
• We can accept sole or joint applications where both parties have pre-settled status up to a max LTV of 80%.
• Applicants must have lived in the UK for at least 2 years. This can be verified through a credit search that shows their residency on the voter roll or through CAIS information. If neither of these checks can be completed, then we require documentary evidence of living in the UK and 6 months of bank statements.
• Applicants also need to show proof of their settled or pre-settled status by providing a share code, which can be obtained from the Government's website. This code allows us to see their immigration status online.

Non-EEA Nationals:

• Non-EEA applicants can borrow up to 80% of the property's value, but we may consider applications above this on referral to our underwriters via a Decision in Principle (DIP).
• Applicants must have lived in the UK for at least 2 years. This can be verified through a credit search that shows their residency on the voter roll or through CAIS information. If neither of these checks can be completed, then we require documentary evidence of living in the UK and 6 months of bank statements.
• Non-EEA nationals must have evidence that they have indefinite leave to remain or enter the UK. This is confirmed through either a residency entitlement stamp in the applicant’s passport and/or visa or by written confirmation from the Home Office/UK Border Agency.
• Non-EEA applicants who do not have indefinite right to reside in the UK will only be considered if they have at least 3 months remaining on a Skilled Worker or Health and Care Worker visa. 
• Enquiries from applicants who hold a family (spousal) visa are acceptable, however only applicable on the following terms:

1. Joint applications only, applicant 1 must have indefinite leave to remain, settled status or hold British citizenship, applicant 2 will be the family visa holder.
2. The family visa holder must be the partner/spouse to applicant 1.
3. Visa must have at least 3 months remaining at the time of application
4. Visa holder must have at least 2 years residency in the UK at time of application.
5. If applicant 2 is not the partner/spouse to applicant 1 we will allow them on mortgage application but we cannot use their income.

To check if you qualify for a further advance on your mortgage with Newcastle Building Society, call us on 0345 606 4488 to arrange to speak with one of our mortgage advice coordinators. 

We currently do not accept new mortgage applications that require a guarantor.

The following information is required in support of a mortgage application:

The Society will initially attempt to identify all customers electronically by using software which checks a series of databases for identification information. This search does not affect your credit rating, however in some cases we may find it necessary to request paper identification to prove name and/or address.

Applicants must supply proof of residence. Any utility bill, council tax bill, bank statements or mortgage statements are acceptable, provided confirmation of sight of the original documents is supplied and they are from within the last 3 months.

The Society will be required to confirm identity. Acceptable documents include a passport or driving licence photo-card.

Applicants must normally have been resident in the United Kingdom for a minimum period of 3 years. This can be waived for a member of HM Forces, or employees of internationally based companies, providing their family will be resident in the property.

The following sources of income are acceptable:

Primary taxable income (100%)

• Basic income
• Private pensions and annuities
• Car allowance
• Pay rise pending (must be within 3 months and employer to confirm)
• Mortgage subsidy (must be permanent)
• Housing allowance
• Additional investment income from rental portfolio (evidenced by accounts / tax assessment / accountants reference)
• London / Large City allowance
• Shift Allowance (Guaranteed)
• Foster care income (an average of the last 2 years or latest year if lower will be taken). This will need to be evidenced by a letter from the agency/local authority placing the child. The letter should confirm the income for each of the last 2 years and confirm that the income from the latest year is expected to continue.

Primary non taxable income (100%)

• State Pension / Pension Credit
• Guaranteed for Life DWP
• Maintenance Order (CSA / Court Order enforceable). If not agreed via Court Order/CSA agreement a 12 month track record evidenced by bank statements is required.
• Limited Company Director Dividends (net of income tax paid)
• Child Benefit – if Y is selected, the latest months bank statement will be required

Secondary taxable income (50%)

• Regular Overtime / Bonus / Commission can be considered using an average of the last 3 months' payslips, providing this is reflected in the Year-to-Date figure.
• Periodic Bonus / Commission can be considered using an average of the last 2 years P60s.
• 2nd Job with at least 12 months service
• Territorial Armed Forces pay

Secondary non taxable income (50%)

• Working family tax credit / Family tax credit / PIP (where applicable)

We will not consider:

• Universal credit
• Unemployment benefit / income support
• Housing Benefit
• Social security payments that are not guaranteed for life (DLA etc)
• Seasonal work
• One off payments
• Gratuities not sighted on payslips
• Bursaries and scholarships
• Investment or Trust Income that is not guaranteed
• Income derived from self invested personal pensions
• Carer's allowance

Where a reduction in income is anticipated in the near future then the impact of this must be considered for affordability purposes. This would normally include applicants who are close to retirement, those that are on or due to go on maternity leave or those that are looking to reduce working hours.

We would expect that any future changes to income are confirmed on the application we receive so that this can be taken into consideration by our underwriters.

Where applicants are on or due to go onto family leave then we will require details of the date they are expected to return to work, the basis on which they will return (i.e. Part time / Full time) and the new salary on return to work. This will need to be verified by the applicant’s employer if they intend to return under different terms.

Employed

For basic income:

• 1 full months' payslips (dated within the last two months) per applicant. Where paid weekly, 1 full month equates to 4 weekly payslips. 
• Note - 1 month personal bank statement per applicant will be required if paid in cash/by cheque. Must show salary being paid into bank.

For regular over-time/bonus/commission payments:

• 3 full consecutive months payslips, the most recent dated from the last 2 months. Where paid weekly, 12 weekly payslips will be required.

For periodic bonuses and commission:

• Last 2 years P60s or payslip showing payments.

For applicants employed by family:

• Last 3 months payslips along with personal salary fed bank statements

 Self employed (Sole Trader / Partnership) 

One of the following:

• Last 2 years' accounts;
• Last 2 years' SA302s and corresponding Tax Overview forms; or
• Completed Accountants Certificate.

Limited Liability Partnership (LLP)

• Letter from HR / Finance Director confirming the remuneration for each of the last 2 years; or
• Last 2 years' SA302s and corresponding Tax Year Overviews or P60s if not a Partner for 2 years; and
• Latest month's personal bank statement showing income being received.

Limited Company (25% or more Shareholding)

One of the following:

• Last 2 years' accounts or
• Completed Accountants Certificate

Accountants Certificates will only be accepted subject to the following criteria;

• Must be the Society’s approved form and be completed by an appropriately qualified individual.
• The Certificate must show the Accountant’s details and their qualification(s).

• Acceptable Accountant bodies;
  • Institute of Chartered Accountants (ICA)
  • Association of Chartered Certified Accountants (ACCA)
  • Association of Accounting Technicians (AAT)
  • Association of Authorised Public Accountants (APA)
  • Association of International Accountants (AIA)
  • Chartered Institute of Management Accountants (CIMA)
  • Chartered Institute of Public Finance Accountants (CIPFA)
  • Institute of Financial Accountants (IFA)
  • Association of Taxation Technicians (ATT)
  • Certified Public Accountants Association (CPAA)
  • Chartered Institute of Taxation (CIT)

For all forms of additional income which is being taken into account, documentary evidence will be required.

Repayment types that will not be considered are:

• Pure interest only with no repayment vehicle
• Lump sum payments during term other than pension (note we allow this for Large Loans given customer profile earning large bonuses)
• Sale of other assets
• Inheritance

Joint mortgage, sole proprietor applications are acceptable. The scheme essentially allows one occupying borrower to be supported by additional income from a family member who will be party to the mortgage but not be named on the title deeds.

Loans will be considered on the following basis in addition to standard requirements:

• Available for residential properties only. Not available for BTL applications
• Maximum of two borrowers
• Minimum loan amount £25,000 up to a maximum of £1,000,000 (subject to product terms and conditions)
• Maximum LTV 95%
• Affordability will be calculated using combined income from the occupying and non-occupying borrower
• Loans will be available on a repayment basis only
• Additional borrowing for home improvements can be considered, debt consolidation is not permitted
• Minimum age for the borrower is 18 years
• Maximum age is 80 years at the end of the mortgage term based on the oldest applicant
• A family member is defined as a close family relative, normally a parent or step parent.
• Both applicants must be employed/ self-employed / in receipt of pension income.

The non-occupying borrower should obtain independent legal advice given the nature of the product and joint and several liability for the debt while having no ownership rights over the security property.

Loan to Value (LTV)

 Our maximum LTV is set out in the table below:

Income multiple caps

Our maximum income multiple is set out in the table below:

Overtime / bonus / commission income

We can take up to 100% of frequent payments (Overtime / Bonus / Commission) where:

• Paid Monthly as evidenced on last three months consecutive payslips AND;

• Year to date earnings on payslips must show these payments have been consistent.

We can take 100% of less frequent bonus payments where:

• A two year track record is available via the last two P60s;

•Gross income, including bonus, must be in excess of £100,000.

Non Standard Income

We can consider SIPP (Self Invested Personal Pension) and RSU (Restricted Share Unit) as an additional income. This will be on a case by case basis and subject to agreement from the Underwriter.

If you have one of these income streams, please contact one of our mortgage team who will be happy to discuss this with you and confirm if it is something we can consider.

Repayment options

We can accept Interest Only loans where:

1. Maximum LTV on Interest Only is 75% with maximum of 85% overall (subject to maximum loan size / LTV above);

2. We will accept Downsizing via Sale of Property where Interest Only exposure is capped at 60% LTV and must have a minimum of £250,000 equity on completion in London/South East regions and a minimum of £150,000 equity on completion in all other regions. A combination of repayment vehicles (including sale of mortgaged property) can be accepted up to a maximum LTV of 75%. Any additional borrowing must be on a capital repayment basis (subject to maximum loan size/LTV above. A combination of repayment vehicles (including sale of mortgaged property) can be accepted up to a maximum LTV of 75%. Any additional borrowing must be on a capital repayment basis (subject to maximum loan size/LTV above.

3. All other acceptable forms of repayment would need to match current lending policy, this includes:

• Endowment Plan(s) using the midpoint projection
• Pension Plan(s) where term cannot exceed retirement age
• PEPS
• Investments (ISA's / Bond's / Unit Trusts)
• Share portfolio where current value of portfolio is sufficient to repay loan
• Regular bonus payments (bonus must be established as part of income verification)
• Sale of investment property
• Regular overpayments (either monthly or via periodic lump sum repayments)

Newcastle Building Society has a partnership with the UK's leading conveyancing panel management specialist LMS.

LMS provide conveyancing services to the Newcastle supporting the application process for customers.

Where our products are offered on a fees assisted basis (where a fees assisted legal transfer is included in the features of the product) LMS will provide the conveyancing service. In addition LMS are also able to provide a low cost fee paying service. For details of the costs involved please refer to the Tariff of Mortgage Charges brochures.

Should your wish to use your own solicitor/conveyancing firm in the purchase or remortgage of your home, it is important to note that included in the Society's Panel Acceptance criteria is the requirement for multiple partners.

Sole practitioners are not accepted to our panel and any request will be rejected. Where sole practitioners are instructed they may act for you however we will instruct LMS to act on behalf of the Society. In order to provide this service there will be an additional charge.

If the proposed conveyancing provider is declined, a customer can select any other solicitor, including LMS appointed firms from the panel without incurring additional Society fees.

• Lending into Retirement is where the Borrower is not retired at the point of loan origination, but there is a likelihood that retirement will occur whilst part of the loan is still outstanding.
• The maximum mortgage term will be based on the oldest applicant turning 80.
• Where the mortgage term extends into retirement (lower of either 70 or declared retirement age), the following will apply:
  • Retirement is more than 10yrs away:
    Current income used for affordability purposes however, suitable evidence that the applicant is currently paying into a private/employer pension plan must be provided. This can include payslips evidencing pension contributions or a pension statement (latest annual statement must be provided).
  • Retirement is less than 10yrs away:
    Affordability will be based on the lower of the current income or future pension income. Evidence of future pension income will need to be provided in the form of the latest annual pension statements showing projected figures.
• Alternatively, a Plan B approach can be considered where there is suitable justification to do so. This might include an understanding of the plan such as the below and we may seek to understand whether the timing of this could be brought forward should circumstances require.
  • Pensions/investments. Please note we can only consider the 25% tax free lump sum from self-invested personal pension.
  • Sale of another property. For example a buy to let or second home.
  • Downsizing of the mortgaged property. Please note we are only able to accept this as a suitable Plan B for an interest only mortgage and we may seek to understand whether the timing of this could be brought forward should circumstances require.
• Self-employed applicants may indicate that they intend to work beyond their 70th birthday. We will consider those circumstances on their individual merits.

Let to Buy is where the borrower is not redeeming the mortgage held on their existing property and is looking to let this out whilst purchasing a new property as their main residence

Loans will be considered on the following basis:

• We obtain consent to let from the existing lender or a copy of the new BTL offer
• We obtain evidence from 1 registered ARLA / NLA letting agent of expected rental income
• If the confirmed rental income covers the mortgage payment in full, the rent and commitment do not need to be input. If there is a shortfall, this needs to be added as a commitment.
• Where the rent received does not pass the stress test then the shortfall will be taken as a monthly commitment for affordability purposes.

We will consider loans above 80% LTV on referral to an underwriter via Decision in Principle.

We will also consider applicants who are looking to remortgage a property already mortgaged to Newcastle Building Society onto one of our Buy to Let schemes and purchase a new residential property to be mortgaged through ourselves.

Minimum/maximum loan amounts are product specific.

Minimum mortgage advance is £10,000 (or £1,000 for further advances), maximum advance is £1.5m. 

The Society makes mortgage finance available for:

• The purchase of residential properties for owner occupation, including the purchase of residential properties for a family member to reside in. Normal criteria caps lending at 95% loan to value inclusive of fees.

Remortgages:

95% maximum LTV. Can borrow more than owe current lender, subject to the following rules:

• Home improvements - estimates not required up to 80% LTV. Over 80% LTV - the requirement for estimates is at the discretion of the underwriter.
• Remortgage fees can be added to the loan if the final LTV does not exceed 95%, product terms permitting.
• Capital raising including debt consolidation is permitted up to 80% LTV. Additional borrowing is not permitted for business use, currency speculation or to repay gambling debts.
• Broker advice fees cannot be added to the loan.
• Marital buy outs max 95% LTV

Minimum repayment term is 2 years with a maximum loan term of 40 years.

A new build property can be classed as:

• A property being occupied for the first time in its current state
• A refurbished property (existing residential unit(s)) being occupied for the first time it in current state
• A converted property (re-development of non-residential unit(s)) to residential unit(s) being occupied for the first time in its current state.

Maximum permitted LTV will be dependent on;

• The presence of Builders Incentives
• Whether the property is a new build house or new build flat as follows:
  
  – The minimum acceptable lease term on new build properties is 85 years. This includes shared ownership.
  – The maximum starting ground rent on all new build properties with a leasehold tenure is limited to 0.1% of the property value.
• Ground rent must be reasonable at all times during the lease term. For example, ground rent escalation should be linked to RPI (Retail Price Index) or a similar index, and unreasonable multipliers of ground rent will not be permitted, for example doubling every 5, 10 or 15 years.

New build houses

• The maximum loan to value for new build houses is 95%.
• The loan amount plus any deposit/cashback incentive and product fee will be capped at 95% which means the borrower will still need to contribute a deposit from their own resources.

New Build Flats

• The maximum loan to value for new build flats is 80%.
• The UK Finance Disclosure form must be completed by the developer and presented to the valuer on site. If this is not seen a nil value is returned on the valuation form.

Incentives

• A UK Finance Disclosure form must be completed by the developer and presented to the valuer on site. If this is not seen, a nil value is returned on the valuation form.
• Where incentives exist, we allow up to 5% incentives including deposit contributions, cashbacks, legal costs, stamp duty without deductions from the purchase price. Costs that don't have a material impact on the value of the property such as white goods, carpets, curtains are not treated as incentives.

All New Build properties must have a home warranty scheme applied. The acceptable schemes to the Society are:

• NHBC
• Build-Zone
• LABC
• Zurich Municipal
• HAPM
• Premier Guarantee
• BLP
• Protek
• AHCI Advantage
• ICW (International Construction Warranty)
• Checkmate Castle 10
• Checkmate Knight 10
• Aedis Homeproof New Build 10 Residential Warranty
• Aedis Homeproof New Build 10 Residential Warranty for Self Build
• Professional Consultants Certificate

Please note that we do not accept assignable contracts in any form.

New Build Variation - First Homes

First Homes are a new form of affordable housing, sold to first-time buyers at a discount of at least 30% against the market value that remains attached to the property in perpetuity. Local Authorities may choose to apply discounts up to 50%.

After the discount has been applied, the first sale must be at a price no higher than £250,000 (or £420,000 in Greater London). First Homes will be for first-time buyers only, and councils will be able to prioritise them for local people and for key workers.

• Max LTV 95% of discounted purchase price
• Homes are purchased under a s106 agreement, which restricts the purchase to local first time buyers
• Homes will be sold at a typical discount of 30% below market price for this purchase. The same discount will apply to any subsequent sales
• Authority to Proceed document will be required issued by the Local Authority
• Further advances can be considered subject to usual LTV restrictions against the market value minus the applicable discount
• Can support the subsequent purchase or remortgage of a First Homes property if LTV restrictions are applied to the appropriate discounted market valuation

All other aspects follow the standard new build lending policy detailed above. For more information on First Homes, click here. 

Maximum number of applicants is 2.

Applications will be referred to our underwriters for review in the following circumstances:

• 1 or more pay day loan taken out in the last 6 months
• 2 or more in the last 12 months

Where there is track record of applicants taking pay day loans frequently over the 12 month period then the underwriters reserve the right to decline the application.

If you have an existing mortgage and want to borrow more or port the mortgage to a new property, you will need to speak to us directly.

We will consider loans from applicants currently in a probationary period. This is normally subject to a 12 month track record in the same line of work.

For applicants employed within the Police Force will normally have a minimum 2 year probationary period. We will accept loans where the applicant has been employed in role for at least 12 months.

• For contracted applicants we will require a copy of the applicant’s current contract and it must have at least 1 year still to run.
• Where applicants are self-employed then we require 2 years' trading accounts and the last 2 years' HMRC Tax Assessments and corresponding Tax Overview Forms.
• For applicants who are coming towards the end of their professional career and especially for sportspersons, documentary evidence will be required to establish how they intend to support the mortgage post-career.
• There is no restriction on age or term other than normal policy guidelines.

• All residential properties must have a minimum purchase price or valuation (whichever is lower) of £50,000
• All buy to let properties must have a minimum purchase price or valuation of £75,000 and a minimum loan amount of £25,000
• Properties in Scotland still require a transcript of existing report from the applicant on the proviso that the valuer is on our panel and the transcript is completed on NBS papers. Alternatively, we will instruct our panel valuers.
• The tenure of acceptable properties will be freehold or leasehold in England and Wales, or their Scottish equivalent.
• All properties must be assessed by a suitably qualified valuer with sufficient professional indemnity cover. All valuation instructions (with exception of Scotland) will be made by the Society via our nominated panel. Third party instructions are not acceptable.

We accept applications on a repayment, interest only or part interest only basis.

• Loan must be on a repayment basis
• Maximum loan amount up to £500,000.
• We will consider lending 100% of the discounted purchase price as indicated in the offer agreement between tenant(s) and Local Authority / Housing Association.
• We will also consider lending additional funds up to a maximum of 80% LTV of open market value subject to funds being used solely for home improvements.
• It will be a requirement that estimates for the works to be carried out are received prior to us instructing the valuation. We will consider lending up to £5,000 maximum upfront to fund immediate home improvements as long as any additional funds are retained until all works completed and a re-inspection confirms.
• It will be a condition of the mortgage that any additional funds in excess of the discounted purchase price will still rank higher than the Local Authority's charge on the property.
• Under no circumstances will we lend additional funds for capital raising including payment of fees to any solicitor or third party.
• Only the applicants named on the Right to Buy offer agreement can be named on the mortgage.
• The Society's charge should always be registered as first priority ahead of any Local Authority.
• The valuer must confirm that there is a ready and sustainable demand for the property to be mortgaged.
• Flats will be considered as long as they adhere to current policy i.e. no high rise flats, maximum 5 storeys. Note that maximum LTV would be 75% of the open market as per our standard criteria for ex local authority flats.
• Further advances will be considered subject to all funds being used for home improvements within the discount period.

Second homes / holiday homes must be strictly for the sole use of the borrower and dependent family members and must not be let. 

The maximum loan to value for such properties is 75% and the applicant's financial status must be sufficient to cover both loans where we will deduct the applicant's main mortgage as a monthly commitment. Maximum loan is £500,000.

We offer Self Build mortgages exclusively via BuildStore Mortgage Services who can be contacted on 0345 223 4888. Alternatively, visit their website www.buildstore.co.uk for more details. We offer Self Build mortgages on the following basis:

• Where applicants wish to buy land and build a new property
• Where applicants are renovating an existing property
• Where applicants are converting an existing structure for residential purposes

We will consider lending up to a maximum of £1,000,000, however, this will depend on the LTV at the end of the build and loan to costs during the build. Please refer to the below:

• £0 to £500,000 up to 90%
• £500,001 to £750,000 up to 85%
• £750,001 to £1,000,000 up to 80%
• Funds are released on a stage payments basis
• Interest Only can be taken during the build but can only be extended beyond build completion where there is a repayment strategy that meets our criteria and LTV does not exceed 75% / 80% part and part
• On completion of the build, following receipt of completion certificate we will allow borrowers to transfer to a standard residential product and waive any Early Repayment Charges applicable
• It is expected that the build is normally completed within 2 years

Please contact BuildStore to discuss your requirements in full.

• Self-employed applicants must have been trading for a minimum of 2 years to accurately assess track record within chosen line of work. 2 full years' finalised figures must be provided as proof of income (exception is borrowers taking our 1 year Self-employed product). The most recent figures must be no more than 18 months old.
• Self-employed applicants' income will be assessed as follows:

Where profits have declined in the last 12 months, then we only use the most recent year to assess for affordability. We may also require a projection from the applicant's accountant to ensure that this trend is not continuing.

Where net profit has declined in consecutive years or drawings continue to exceed net profit, then the application will be declined.

• Applicants must have continuous employment with the firm for a minimum of 2 years. This can be in the form of employment or a shareholder.
• Income will be assessed using an average of the last 2 years (or latest year if lower). If the applicant has not been a shareholder for 2 years, we can request P60s to evidence the employed income.

The level of income verification for LLP applicants is as follows: 

• Letter from HR/Finance Director confirming the remuneration for each of the last 2 years
• Confirmation that there are no business loans included in the figures
• Last 2 years SA302’s and corresponding Tax Year Overviews or P60s if not a Partner for 2 years
• Latest month’s personal bank statement showing income being received.                  

• Maximum loan is based on affordability. Maximum loan amount is 95% of the borrower's share without incentives.
• Maximum LTV will be 90% of the borrower’s share if an incentive is being offered.
• The minimum share of the property to be purchased is 25% and the maximum is 75%.
• The borrower must contribute at least 5% deposit from own funds or via family gift.
• Property must be leasehold, and loan must be on a repayment basis.
• Borrowers must not have any interest in another property anywhere else in the world.
• Borrowers cannot sublet their Shared Ownership home.
• Standard concentration limits apply.
• Should the property be down valued when valuation obtained for mortgage purposes, loan amount will be reduced accordingly.
• For affordability purposes, the rental payment and any ground rent and service charges need to be confirmed and included as a commitment.
• If the property is a new build, standard new build policy applies including aspects relating to suitable warranties.
• Incentives defined in standard new build policy are acceptable up to a maximum of 5% of the purchase price. If the incentive is greater than 5%, we will not accept any of the incentive.
• The lease to be entered into by the Borrower must be the current Homes England model shared ownership lease which can be found on the Government’s website.

The lease must contain the fundamental clauses relating to:

• Alienation
• Mortgagee Protection Clause
• Rent Review
• Staircasing; and
• Termination

The fundamental clauses must be in the same form as those contained in the current Homes’ England model shared ownership lease.

• The lease must contain a mortgagee protection clause which shall provide that if a mortgagee in possession wishes to sell the property it has the choice of either: (a) assigning the lease to the buyer as it is; or (b) staircasing to 100% and then assigning.The Society does not accept properties that do not allow staircasing to 100% ownership.
• Properties that allow 100% staircasing will only be acceptable if they are not restricted to certain qualifying individuals on re-sale.
• The arrangement must be through a non-profit  Registered Social Landlord (including Local Authorities) as Landlord, regulated by the Regulator of Social Housing (RSH) and authorised to provide housing under the Shared Ownership and Affordable Homes Programme (SOAHP) 2016 to 2021 and Shared Ownership homes  provided  through the Affordable Homes Programme (AHP) 2021 to 2026.

Remortgage Criteria:

• No additional borrowing unless this is to staircase.
• Staircasing must be for a minimum of 5% of the property's value.
• Borrowers cannot purchase more than 75% share of the property unless they are purchasing the final share.
• A physical valuation will be required on all applications.
• If this is a like for like remortgage, a letter from the Housing Association will be required to confirm up to date rent and ground rent/service charge; and
• If staircasing, the Memorandum of Sale will be required from the Housing Association confirming the new share, rent and ground rent/service charge.

Further Advance Criteria:

• A Further Advance can only be agreed where funds are to be used to staircase.
• Staircasing must be for a minimum of 5% of the property's value.
• Borrowers cannot purchase more than 75% share of the property unless they are purchasing the final share.
• A new re-inspection report will be required in all instances to ascertain the current value of the property. This will be at the cost of the borrower.
• A Solicitor will be required to act; and
• Memorandum of Sale will be required from the Housing Association confirming the new share, rent and ground rent/service charge.

• The deposit must come from the applicant's own resources. Gifted deposits from parents and other close family relatives will be allowed subject to there being no repayment vehicle in force and the underwriter being happy with the arrangement.
  
  In all instances we will require a signed copy of our Gifted Deposit Form which can be downloaded from our useful documents section. This form should be sent with supporting information when you apply for the mortgage.
• Where the source of the deposit is confirmed as 'savings' the Society reserves the right to see documentary evidence of the deposit prior to completion. Crypto currencies such as BitCoin are not considered an acceptable source of deposit.

With effect from 1 September 2023 our current Standard Variable Rate is 6.94%.

• Proposed security is attached to a property already owned by the applicant or a family member.
• Annexes that will not be used by the applicant or a family member or those that will be used for commercial gain.
• "Flying-freehold" - if more than 25% of property involved.
• Houses with rooms let or likely to be let to several tenants where premises have not been converted or constructed for this purpose.
• Properties where the unexpired lease has less than 85 years remaining on completion.
• Unmodernised flats and flats which are above commercial premises. Exceptions can be made for exclusive developments and certain areas of larger British cities where the valuer has confirmed that there is a ready and sustainable demand.
• Studio flats are normally unacceptable but may be considered in prestigious developments where a ready and sustainable demand exists. This is subject to valuers comments.
• Large old unmodernised houses where accommodation is in excess of the applicant's requirements, particularly where there are attics and/or basements.
• Back to back houses.
• Council houses built in a non-traditional way, i.e. prefabricated reinforced concrete.
• Ex Local Authority flats where LTV will exceed 75% (except in Scotland)
• Freehold flats with the exception of 'Tyneside Flat' style or where the application will own a share of the freehold with a management company in place to oversee the maintenance of the building.
• Houses with restrictions to ownership (e.g. retirement flats, restrictions on occupation to local inhabitants). This list is not exhaustive and any application where there is a restriction should be referred to an underwriter.
• Properties with any agricultural restrictions.
• Houses under shared ownership / equity where a sales restriction / charge will remain on the property despite the borrower owning a 100% share.
• Mobile homes or caravans.
• Houseboats.
• Uninsurable properties e.g. due to flood risk.
• Uninhabitable properties (e.g. no kitchen/bathroom/roof/mains services not connected).
• Properties with invasive plants (i.e. Japanese Knotweed) within the immediate curtilage of the property.
• Flats with a Shared Balcony (Deck Access).
• Timber framed properties are acceptable if constructed with an outer skin of brick/stone or rendered blockwork: other types of outer skin such as timber cladding are not acceptable. Please refer to lender for further guidance.
• Converted churches
• Grade 1 listed buildings
• Properties which fall under the Discount Market Scheme

Alternative or additional fees may be charged for special schemes, please refer to specific product pages for details.

Please note, for remote properties, further charges may apply for reasonable travel expenses incurred by the valuer in order to carry out an inspection.

Valuations are instructed as part of the application process. These will only be put on hold in exceptional circumstances and will be considered on a case-by-case basis.

Valuation Appeals

Our panel of regional valuers is highly experienced and we're very confident that the valuation they provide will be an accurate reflection of its true market value.

This means we're unable to accept any appeals against the valuation of the property.

If you have an unusual property or you have any concerns then please contact the Society.

Our panel of regional valuers is highly experienced and we're very confident that the valuation they provide will be an accurate reflection of its true market value.

This means we're unable to accept any appeals against the valuation of the property.

If you have an unusual property or you have any concerns then please contact the Society.