Lending Criteria

Secured Credit - County Court Judgements (or Decrees) and Defaults – A maximum total value of £5,000 satisfied, over no more than 3 instances within 36 months prior to application and no instances have occurred within 12 months prior to application.

Unsecured Credit – maximum 2 in 12 months, maximum status 1, no more than 4 missed payments in 36 months, maximum status 1.

No insolvencies/liquidations in last 3 years.

Please speak to your BDM for more information.

A maximum of four applicants is acceptable.

• Works to be undertaken do not require planning permission, Permitted Development is acceptable.
•  Property must be defined as habitable once the works are completed.

Valuation

Schedule of works to be sent to valuer who must provide:

• A valuation and rental details based on current condition
• A valuation on completion of works
• Confirmation that no structural works are required and that the definition of light refurbishment is met
• An estimated rental valuation on completion of works – an AST agreement is not required to be in place at the time of valuation.

For purchases or development exits, there must be a tenant in place within three months of completion of the loan.

Acceptable

• Castle Trust Bank will not normally lend on a security of non-standard construction. ‘Standard construction’ means:
  • Masonry walls of solid or cavity construction having a minimum thickness of 200mm.
  • Modern timber (post 1975) or steel framed (post 1998) property with a masonry outer cladding originally built with the benefit of a suitable new home warranty.
  • Standard slate or tiled roof construction
  • Standard flat roof (e.g. metal, mastic asphalt, felt, single ply elastomeric)
  • Thatch (considered on an individual basis)
  • Modern methods of construction
• Previously unacceptable construction which is now acceptable:
  • Wimpey No Fines
  • Laing Easi Form post 1945
  • Crosswall post 1970

Unacceptable

• All non-traditional construction types:
  • Steel framed, with non masonry cladding
  • Solid masonry having a thickness less than 200mm
  • Felt flat roof in excess of 50% plan roof area
• Laing Easi Form pre 1945
• Concrete (No Fines, Cheshire Brine, Mundic, Precast Reinforced Concrete (PRC))
• Log
• Single Skin
• Flat Felt
• House boat
• Mobile home
• Timber Frame (period properties considered on an individual basis)
• Cross wall construction pre 1970

• Any shareholders holding less than 25% share of the company do not have to appear on the application.
• Ownership can be as either an individual or corporate borrower.
• Corporate borrowers must provide personal guarantees from all Directors on a joint and several basis.
• Power of Attorney applications are not acceptable.

• Buy to Let properties must have a maximum tenancy duration of 12 months with six monthly break clauses.
• Limited Company lets, acceptable where the tenant is a named individual.
• Longer terms by negotiation.

For Holiday Lets:

• Short term, which includes Airbnb.
• Longer terms by negotiation.

• Yes, provided the DWP recipient is listed as the tenant on the Assured Shorthold Tenancy agreement.

Ex-pats are acceptable providing they own a property in the UK.

For UK residents, first time landlords are acceptable and can also be first time buyers. For foreign nationals, first time landlords are acceptable, but not if they are also a first time buyer.

• Family gifted acceptable.

Expats and Foreign Nationals:

• No.

• a managing agent is in place
• the applicant has UK mortgage experience

General 

• HMOs are accepted in principle for purchase or remortgage 
• Borrowers must hold the relevant HMO Licence upon completion. Castle Trust Bank will require verification via the conveyancing solicitor
• The maximum number of tenants per property is six
• HMOs will only be considered where they are in a proven HMO area.

Property 

• No more than one kitchen, unless a large HMO (at least three storeys high and at least five tenants forming more than one household) where the limit is two kitchens 
• No more than four habitable storeys 
• No more than six lettable rooms 
• Standard construction
• Purpose built HMOs, hotels and hostels are not acceptable.

• There is no specified minimum income, but applicants must have demonstrable income and a suitable repayment strategy.

• Where an application is a joint application, and one of the applicants has a demonstrable income to cover the repayment, joint applicants who are students or unemployed will be considered.

Let to Buy applications will not be accepted where the application is a Consumer Buy to Let.

• Limited Company applications are accepted. The limited company must be registered and trading in England or Wales and be incorporated for the sole purpose of buying and holding residential investment property. 
• Newly incorporated limited companies are acceptable provided at least one director has a track record of buy to let ownership, involving three or more properties for a minimum of 12 months.
• All Applicants/Guarantors must provide Personal Guarantees on a joint and several basis.
• Credit reference checks will be carried out on the company and its directors.

TermTen loans are available for any legal purpose.

Bridge to Let loans do not allow capital raising for any other purposes than use on our security.

The minimum floor space is 35m²  per unit. If property is an MUB we can consider units between 30 and 35m² , so long as the average of the block is 35m²  or more.

There is no minimum ownership period.

The minimum acceptable unexpired lease is 60 years at maturity.

No missed payment within last 12 months. We can accept a maximum of two missed payments in the last 36 months, excluding the first 12 months.

• Where an applicant has an interest in four or more distinct mortgaged buy to let properties, a stress test will be applied to assess the position of the entire portfolio.
• Where there is a shortfall, we will take a view depending on how many properties this affects, the strength of the portfolio and the broader financial circumstances of the applicant.

We accept applications from non-EU nationals on a case by case basis. Please speak to your BDM for more details.

• A maximum tenancy duration of 12 months with six monthly break clauses is required.
• Properties with occupancy restrictions are not acceptable.

• Ownership can be as either an individual or corporate borrower.
• Corporate borrowers must provide personal guarantees from all Directors on a joint and several basis.
• Power of Attorney applications are not acceptable.

There is no limit on the size of a Buy to Let portfolio.

For TermTen with a 5 year fix and for the 5:2 product, the following stress test will be applied: 

• Basic rate non-portfolio taxpayers, off-shore clients and Limited Companies: 125% at pay rate.
• Higher rate taxpayers, portfolio landlords, HMO and holiday lets: 145% at pay rate.

For TermTen with a 2 year fix, the following stress test will be applied: 

• Basic rate non-portfolio taxpayers, off-shore clients and Limited Companies: 125% at pay rate plus 2%.
• Higher rate taxpayers, portfolio landlords, HMO and holiday lets: 145% at pay rate plus 2%.

Acceptable 

• Standard roof construction from slate
• Standard roof construction from tile
• Standard flat roof
• Thatch considered on an individual basis
• Felt flat roof where it covers less than 50% of gross roof area.

Unacceptable

• Felt flat roof in excess of 50% of gross roof area.

• Houses (terraced, detached, semi-detached)
• Bungalows 
• Leasehold flats and maisonettes (purpose built or converted) with an unexpired lease terms in excess of 60 years at maturity of the loan
• Flying Freehold up to 15% of the size of the property
• Blocks of flats: Castle Trust applies maximum limits depending on the charge taken:
  • Freehold: If we take a charge of the freehold, we are able to consider applications on the entire block
  • Leasehold: If we take a charge of the leasehold, we are able to consider applications up to 20% of the block.
• Grade 2 properties 
• Studio flats, minimum 35sqm per unit. If property is an MUB we can consider units between 30 and 35sqm, so long as the average of the block is 35sqm or more.
• Flats above 6 floors ie 7th floor upwards (no ex-council blocks)
• Self builds (subject to a valuation and structural survey report).

We may consider other property types, on a case by case basis, please speak to your BDM.  

For TermTen with a 5 year fix and for the 5:2 product, the following stress test will be applied: 

• Basic rate non-portfolio taxpayers, off-shore clients and Limited Companies: 125% at pay rate.
• Higher rate taxpayers, portfolio landlords, HMO and holiday lets: 145% at pay rate.

For TermTen with a 2 year fix, the following stress test will be applied: 

• Basic rate non-portfolio taxpayers, off-shore clients and Limited Companies: 125% at pay rate plus 2%.
• Higher rate taxpayers, portfolio landlords, HMO and holiday lets: 145% at pay rate plus 2%.

• Buy to Let properties must have a maximum tenancy duration of 12 months with six monthly break clauses.
• Limited Company lets, acceptable where the tenant is a named individual.
• Longer terms are acceptable by negotiation, subject to relevant break clause. 

• Single Freehold flats and maisonettes are not acceptable (unless whole block is being taken as security).
• Leasehold flats and maisonettes are acceptable.  If leasehold, there must be 60 years unexpired at the maturity of the loan term.
• Flying freehold up to 15% are acceptable (subject to referral).

• Commercial properties
• Freehold flats/maisonettes (unless whole block is being taken as security)
• Flying Freeholds above 15% of the gross external floor area of the property
• Mobile homes
• Houseboats
• Properties with agricultural restrictions (farms / crofts)
• Properties with occupational restrictions
• Bed sits and B&Bs
• Multi occupancy properties that do not meet Castle Trust Bank HMO criteria
• Work units
• Ex-local authority properties still within their pre-emption period
• Grade 1 and Grade 2* properties.