Buy-to-Let

Product fees can be added to the loan and are included in our affordability calculations.

In all cases the borrower will be liable to pay all legal costs in respect of the completion of the mortgage. On instruction, our solicitors will request that payment is made by the borrower in advance and held on account.

As of 8 March 2021, we have replaced LIBOR as the reference rate for the reversion interest rate for our active Buy-to-Let products. To learn more about this decision and its replacement - the Bank of England Base Rate (BBR), please visit our FAQs.

Evidence demonstrates that dual representation reduces the time to completion by an average of 15 days when compared with separate representation.

Our solicitor may be selected to act for both the borrower and us in most situations.

Dual representation is not available where applications have been made that include:

• Cases where security titles are being split or a change in the security title is required
• Incorporation cases involving a transfer by the borrower from individual to corporate ownership.

Dual representation is not available for properties located in Scotland

If the borrower wishes to use their own solicitor they may do so provided that the firm of solicitors acting for them is:

• Registered with the Law Society and has a minimum of 3 Solicitors Regulation Authority (SRA) approved managers (none of whom must be struck off)
• A solicitor with 2 SRA approved managers accredited with the Law Society’s Conveyancing Quality Scheme (CQS) is also acceptable.

We will select our own solicitor to act for us.

We seek to apply title insurance, at no cost to the borrower, for standard property and HMO remortgage cases up to £750k, excluding:

• Transfer of equity
• Where security titles are being split or a change in the security title is required
• Properties with more than one kitchen
• Cases where at the underwriter discretion title insurance cannot be applied

Expired Offer fee of £250 may be payable when we are required to extend a Mortgage Offer.

UK individuals, limited companies and limited liability partnerships only.

Company Standard Industrial Classification (SIC) code must relate to property management, investment or development.

New Special Purpose Vehicles (SPVs) are accepted.

Our loans can be used to purchase or remortgage.

If remortgaging, a valid explanation is required if the property has been owned for less than 6 months, unless this is a transition from another of our products. Remortgaging from existing Bridging Finance will be considered.

We permit additional capital raising but it must be fully declared and explained.

On all purchase cases the source of deposit must be disclosed and must have originated from within the UK. We will request evidence of the deposit.

If a limited company is purchasing the property from individual director(s) - and the full share capital of the limited company is in exactly the same name as the property - then the existing equity is acceptable as the deposit in the form of a director’s loan account.

Personal applications

Gifted deposits are acceptable excluding First Time Landlords (FTL). A FTL will require a minimum 10% contribution from personal funds.

Gifted deposits can only be accepted from an immediate relative, full details of whom must be disclosed.

• The identification of the person(s) gifting the deposit must be satisfactorily established
• Appropriate deed of gift indemnity insurance will be required
• Only on-shore funds may be used
• Inter-family sales: A 10% personal contribution is required

Limited Companies

Acceptable without a customer contribution when the following are in place and verified:

• Directors loan
• Intercompany loans
• Business savings
• Inter-family sales: A 10% personal contribution is required

Buy-to-Let offers remain valid for 90 days from the date of the formal offer. If an offer needs to be reissued after expiry this may alter the amount of the loan and be subject to additional underwriting.

An electronic verification check will be done through Equifax. If this check fails, you will need to supply a certified utility bill, bank statement or tax demand dated within the last 3 months. We can accept a drivers licence if it isn’t being used as ID verification.

The underwriter can apply discretion to the minimum time in the current job, taking into account employment history, probation status and proposed exit.

Applicants/ shareholders/ directors should be registered for UK tax and sources of income should be within the UK.

Where a 36-month mortgage history is not available on the credit searches we will require mortgage statements to verify satisfactory conduct. We can check these manually or through Open Banking, if permission is given by the applicant.

Applicants are required to demonstrate they have sufficient income to cover their full personal and Buy-to-Let expenditure, including any potential property void periods. This can be done manually or through Open Banking, if permission is given by the applicant. Your underwriter will advise you if this is necessary. Acceptable income evidence should be one (or a combination) of the following:

• latest 3 months’ payslip
• latest SA302 (HMRC) tax assessment and tax overview
• latest Signed Accounts

First time Landlords, defined as being landlords with less than 12 months experience, are required to demonstrate a minimum income of £30,000.

If we are unable to verify the applicant’s bank account we will require a bank statement or bank ‘Welcome Letter’ dated in the last three months confirming the account details.

We will ask the borrower to verify their identity via the Jumio platform. They will be required to take and upload a selfie and a photo of their identification. If this check fails, you will need to follow the instructions from our Identity Documents list.

All borrowers must disclose details of their marginal tax rate to enable the correct ICR to be applied.

Experienced Landlord - Standard Residential:

A borrower will be defined as an experienced Landlord if at least one party to the loan has held at least 1 or more BTL properties for at least 12 months.

First time landlords

Loans up to a maximum of 75% LTV subject to the following criteria:

• No missed mortgage payments
• Must own residential property for at least 6 months
• Minimum income £30000
• No adverse credit
• Property type that is acceptable -single residential properties and Small HMOs
• Not acceptable -student lets, Large HMOs or MUFB

Only UK Limited Companies and UK Limited Liability Partnerships (LLP) are permitted. SIC code must relate to property management, investment or development. New SPVs are accepted, however no trading businesses. Purchase of company share capital to acquire property is not accepted.

Full personal guarantees are required from all directors and shareholders who own at least 25% of the equity in the company.

Where there is a shareholder with less than 25% shareholding - or a director who can be defined as having a significant controlling role in the business - we will require personal guarantees and these officers to be added to the application.

Directors must demonstrate they have sufficient income to cover their full personal and Buy-to-Let expenditure. This can include income from employment, selfemployment, pensions, investments, and rental or other property income.

Director/shareholder minimum age: 21

Director/shareholder maximum age: 95 (at end of term)

Maximum number of 4 directors/shareholders/members.

LLP members must be designated.

Where multiple applications are made by the same corporate borrower each loan must be in the exact same company name. We reserve the right to require a debenture and floating charge at the underwriter’s discretion based upon our total aggregated exposure.

Where individual director(s) have interests and make applications the exposure to LendInvest must be carefully considered and will be an underwriters decision as to whether a debenture/floating charge is required.

Any applicants via a UK limited company or UK LLP will be assessed on the basis of the strength of the director(s) as if they were applying for lending facilities on a personal basis. A condition of any offer to these entities will be personal guarantors or third-party security providers seeking independent legal advice. In certain cases, we may accept a waiver letter in respect of the independent legal advice from a borrower who is also providing a personal guarantee

Any transfer of ownership or equity will be treated as a purchase (NOT remortgage) of the new freehold/leasehold title. This includes cases involving title splits.

In all cases we will append an Offer Condition to seek confirmation that all borrowing parties have obtained their own taxation advice from a qualified accountant.

Individual to corporate

The existing equity is acceptable as the deposit in the form of a Director’s Loan Account. A transfer at undervalue (including nil value) may be considered, subject to underwriting, only where the current ownership of the property is in exactly the same name as the legal ownership of the company purchasing the asset. For incorporation application(s), where the property is held in personal name(s) and mirrors (exactly) with the same ownership of the SPV, we accept the issuing of shares.

Separate legal representation will be required. Applicants will be liable to pay their own costs. Does not qualify for any 'free' legals incentive that may be offered from time to time.

Corporate to corporate (including a LLP/SPV)

The existing equity is acceptable as the deposit in the form of a Director’s Loan Account. Any transfer of ownership from company to company (including LLP or SPV) must be a purchase at full market value. Issuing new company shares to purchase a property is NOT accepted. Separate legal representation will be required. Applicants will be liable to pay their own costs.

Does not qualify for any 'free' legals incentive that may be offered from time to time.

Trusts

LendInvest will not lend to trusts or overseas-registered companies.

Title splits

1. Separate legal representation
2. Underwriter agreement necessary
3. Normally treated as a purchase
4. Property must be suitable legally and physically
5. Charges on part security are not acceptable
6. Transfers are at full market value

We define portfolio landlords as borrowers who have 4 or more mortgaged buy-to-let properties.

There is no limit on the number of properties held or mortgaged by a portfolio landlord with other lenders. Properties owned abroad, and their details, will not be included within the portfolio calculations.

When the application is made we must see:

• Full details of the existing portfolio, including; address, purchase date, mortgage lender, balance outstanding, monthly mortgage payment, rental income, current value, and the current assured shorthold tenancies (ASTs) in place including term and start date.
• An outline of the borrower’s experience in the buyto-let or HMO market. We will reconcile and review payment history for the portfolio against credit data where available

If you are submitting a portfolio landlord case, just upload their property portfolio spreadsheet to our online portal and we will do the rest.

If you are making multiple applications for the same client, applications may be duplicated within the Broker Portal. Detailed guidance is available here.

If you have another case for the same client within 6 months, we will simplify the underwriting process, with no need for a new portfolio assessment.

Above 125%

The case can proceed without the need for any additional affordability checks.

Between 125% and 100%

If the total portfolio LTV < 65%, the case can proceed without the need for any additional affordability checks.

If the total portfolio LTV > 65%, additional checks for affordability will be carried out.

Further assessment should include at least one of the following and should be detailed clearly within the lending rationale.

• Review Open Banking or an Assets and Liabilities Statement or Company House accounts or at least the last three months bank statements
• A client interview

• Houses
• Flats
• Maisonettes
• Apartments
• New-build flats, New-Build Large HMOs and New-Build MUFB (max LTV 70%) ²
• New-build houses and New-Build Small HMOs (max LTV 75%) ²
• HMOs up to 15 units ¹
• Multi-Unit Freehold Block (MUFB) up to 6 units (max LTV 70%)
• Basement flats (including new builds) (only acceptable in London and Edinburgh) ²
• Flats in blocks up to 5 storeys (must have a lift if 4 storeys or higher)
• Flats up to 10 storeys are accepted in Greater London subject to valuer’s commentary (must have a lift if over 4 storeys)
• Ex-local authority flats considered if in a privately owned block ²
• HMO flats (up to 6 beds)
• HMOs let to students (up to 6 rooms) ³
• Studio flats (within Greater London, min 30sqm)
• Flats with balcony or deck access ²
• Properties adjacent to or opposite a public house/social club/places of worship ²
• MUFB combined with HMO ²

1. ¹ See sector experience section
2. ² Subject to underwriting and valuers comments, the LTV may be restricted to 70% if the case proceeds
3. ³ Student Let HMOs in Scotland (only acceptable near main universities which would include: University of Stirling, University of Dundee, Heriot-Watt University, University of Strathclyde, University of Aberdeen, University of St Andrews,University of Glasgow and University of Edinburgh)

• Properties above, or adjacent to fast food outlets, amusements, restaurants, clubs
• Shared ownership
• Studio flats (outside Greater London)
• Freehold flats and freehold maisonettes
• Tyneside/crisscross leasehold
• Flats over 18 metres with Cladding unless newly built where work commenced after 1/1/19
• Ex-MOD flats outside Greater London
• Properties in over 1 acre of land
• Properties in a designated fracking area where the valuer does not confirm as suitable security
• Property with inherent structural defects e.g. Properties built using high alumina cement, mundic block or other defective materials
• Properties with agricultural usage or other planning restrictions
• Grade 1 listed properties
• Mobile homes and houseboats
• Commercial property
• Properties in isolated rural locations
• Properties where the borrower is effectively both the freeholder and leaseholder unless we have a charge over both
• Properties built or significantly converted in the last 10 years without a nationally recognised warranty
• Properties located next door/adjacent to the applicant’s residential property unless we have a portfolio landlord
• Properties that contain a flying freehold greater than 15% of the total property area
• Single dwelling with a substantially flat roof
• MUFB leasehold flats
• Back to Back / Sub Sales
• Any form of non-standard construction (we can consider the following Concrete Construction, Wimpey no Fines, Laing Easiform and Timber framed houses – subject to being built after 1970 with brick, reconstituted stone or rendered block work)

• Freehold houses only. Leasehold houses can be considered on a case-by-case basis.
• Leasehold flats and maisonettes must have at least 65 years remaining on the lease at the end of the term.
• Commonhold is not accepted.
• Freehold flats/maisonettes (except former feudal flats) are acceptable in Scotland

Single, assured shorthold tenancy (AST) up to 1 year or a corporate let for a longer period at the underwriter’s discretion. All tenancies must be to occupiers who will be in residence for the full period of the AST or corporate let.

If, during the term of the mortgage, the ground rent charge is (or will) exceed £1,000 p.a. in London or £250 p.a. outside of London, we will be unable to proceed with the application.

Any property we are considering should be lettable in its current condition.Properties that are likely to have poor demand from tenants due to their current condition, location or other factors, including poor maintenance or management of common areas, will not normally be acceptable. Properties that are likely to have average demand from tenants due to their current condition, location or other factors, including poor maintenance or management of common areas, we may restrict LTV to 70%.

We reserve the right to accept or decline any individual property.

The property must comply with the current Energy Performance Certificate Regulation, and have a minimum rating of E, unless there is an applicable exemption.

£150,000 London (excl. rest of UK)

£75,000 UK (excl. London)

Block Concentration Level: LendInvest cannot finance more than 25% or 5 units in a single block of flats. These limits relate to LendInvest’s exposure and not to any individual borrower.

In England & Wales a HMO is defined as a property rented out by at least 3 people who are not from 1 ‘household’ (e.g. a family) but share facilities such as the bathroom and kitchen.

You must have a licence if you’re renting out a large HMO in England or Wales. Your property is defined as a large HMO if all of the following apply:

• it is rented to 5 or more people who form more than 1 household
• some or all tenants share toilet, bathroom or kitchen facilities
• at least 1 tenant pays rent (or their employer pays it for them)

Experienced landlords who have 1 or more BTLs (held for at least 12 months).

For Small HMOs, Student Lets will be considered.

MUFB cases, a minimum of 12 months experience managing a similar property or the equivalent number of other tenancies in the background for over a year. If the MUFB experience is less than 12 months, a minimum of 2 other BTL properties must be owned for a minimum of 12 months.

For HMOs of up to 6 bedrooms, the valuation is based upon the vacant possession comparable value only and not the investment yield. Retypes are not accepted.

Large HMOs are typically valued upon rental yield.

Small HMOs in an Article 4 area can be valued on a rental yield basis where there have been changes made to the layout to accommodate multiple tenants. On submission of the application you must confirm this or we will value on a standard basis.

£250,000 in London (excl. rest of the UK).

£100,000 for rest of UK (excl. London).

Properties being refinanced that are operating as a HMO must have all appropriate licences in place at the time of application, if applicable.

The property must meet all local authority licensing requirements prior to funds release. The borrower must obtain a HMO license, when required, to operate within 90 days of completion.

In an area where a clear demand exists. Maximum number of letting rooms in any one HMO property cannot exceed 15. Max units for MUFB is 6. Valuation fees by arrangement.