Our lending criteria

Please note flats must have a minimum internal floor area of 35sqm – houses minimum 50sqm

We accept the following:

• Freehold/leasehold houses
• Leasehold flats
• New build houses
• Modern methods of construction
• Ex-local authority houses
• Buy-to-Let and Holiday-let properties
• Holiday/second residential homes
• New build flats

We don't accept

• Freehold flats
• Ex-local authority flats
• Tower block flats
• Land for rent
• Properties of non-standard construction
• Properties that fall under ‘House of Multiple Occupation’ legislation
• Commercial properties
• Student letting properties
• Properties defined as being of defective construction
• Properties where the element of flying freehold is over 20%
• Ground rent which exceeds £250pa (£1000pa in London) or is ‘escalating’

On referral we will consider:

• Flat roofed properties (subject to valuer comments)
• Flats above commercial (no food/hospitality related business)

If you are not sure whether we will consider the type of property in question, please contact us on 0800 988 1561 or email furness.intermediaries@furness-bs.co.uk.

• Deposits are acceptable from savings, equity or gift from close family.
• Where the deposit is a gift from a close family member it must be from the UK and not repayable.
• We may consider deposits raised via dividends taken from retained profit in a Ltd Company as long as the applicant has 100% shareholding and the accounts show sufficient funds are available and withdrawing the funds will not be detrimental to the business as confirmed by the accountant.
• Directors loans are not acceptable for a deposit.

Furness will accept the following warranties in lieu of certification by a professional consultant (Architect, etc):

• NHBC certificate
• Premier Guarantee
• Build zone
• LABC New Home Warranty, (only in respect of individual new-build houses, NOT larger developments of houses or blocks of flats).
• Checkmate
• Protek
• Advantage (ACHI)
• Q Policy
• Suitably qualified professional consultants certificate (PCC). Consultant must have professional indemnity insurance with a minimum limit of £1 million and should have one of the qualifications below:
• RIBA
• M/FRICS
• MCIAT
• MCABE FCABE
• MICE/FICE
• MIStructE Or FI StructE

We won't consider applicants who, in the last 3 years, have had:

• Any IVAs, DMPs, or bankruptcy.
• Any CCJs or Defaults over £500.
• 2 or more missed payments on a Mortgage or secured loan. 
• Missed payments on unsecured commitments reaching status 4 or higher with an account balance of over £150.

Within the last 2 years:

• Missed payments on unsecured commitments reaching status 3 or more. 

Within the last 3 months:

• 1 or more missed payments on a Mortgage or secured loan. 

Communications and Utility accounts can be excluded.

The minimum age is 18. The mortgage term should end before the eldest applicant reaches their 80th birthday.

However, where the term exceeds either of the borrowers expected retirement age or 75 years, whichever is the soonest, evidence of retirement income must be provided. Affordability will be based on the retirement income alone.

If your client is either already retired, or the mortgage term takes the applicant(s) past their expected retirement age, then the maximum LTV we can consider is 80%.

This is based on the oldest applicant’s age on their next birthday.

Unregulated BTL - a property bought with the intention to let under an AST. AST must be between the tenant and landlord (applicant) and a minimum of 6 months, maximum 12 months.

Consumer BTL - a property that was once the applicants own residence or an inherited property where the primary intention was not to let the property on an AST ‘accidental landlords’.
Exception to above - where the property has been let under an AST for 12 months minimum or where the applicant owns background buy to let/holiday let property – in these cases we would class as an ‘unregulated’ BTL.

Regulated (family) BTL - a property let to a close family member – parent, grandparent,sibling,grandchild,child – other family members such as cousins etc do not qualify and in these cases we would class as an ‘unregulated’ BTL.  No rental income, even if paid, will be factored in to our affordability assessment.

Unregulated Buy to Let 

We assess on an ICR basis – see below – there is the option for top slicing and an affordability assessment.

Holiday Let 

*Holiday Let rental assessed from an average of the high, mid and low season rental yield.

Portfolio Landlords – 4 or more mortgaged properties

Portfolio Exposure Limits 

Consumer Buy to Let 
We assess on an affordability basis including 50% of the subject property rental income.

Rental income must achieve 125% at the product payrate.

Regulated BTL
We assess on an affordability basis, we will not factor in any rental income to the assessment. 

We will consider a number of reasons for capital raising including:

• Home improvements
• Further education fees
• Purchase of other properties (residential, buy to let, holiday let) 
• Holidays
• New car
• Debt consolidation - max £40K - see separate criteria for this
• Purchase of equity following divorce/separation
• Assist close family with deposit funds for a property purchase
• Family gifts, including inheritance tax planning - applicant must be aged 55 years minimum 
• Replenishment of funds or savings - funds must have been used in the last 12 months

• We will accept concessionary purchases (below market value) or gifted equity (full market value with the equity as the deposit).
• Must be from close family or landlord.
• The discount must be a true gift and not subject to repayment, retained interest or future clawback provision.
• If between a tenant and a landlord then the tenant must have rented the property for at least 12 months under an AST.

Umbrella Companies

Contractors not directly employed by the employer, but working via an Umbrella Company who provide payroll services, are generally acceptable up to 95% loan to value.

•3 payslips are required. Assessable income is to be based on the payslips x 46
• 1 years’ experience in the same industry/sector is required
• If there is less than 1 month remaining on the current contract, evidence of contract extension – or a copy of the new contract is required
• Gaps in contracts above 8 weeks will need to be referred to the Underwriting Team for individual assessment

Daily Rate Contractors

Daily rate contractors are generally acceptable up to 95% loan to value. Income will be assessed based on the daily rate over a 5-day week, x 46 weeks.

• 1 year’s experience in the same industry/sector is required
• If there is less than 1 month remaining on the current contract, evidence of contract extension – or a copy of the new contract is required
• Gaps in contracts above 8 weeks will need to be referred to the Underwriting Team for individual assessment

 CIS Contractors

We accept CIS workers with 6 months' payment and deduction statements.

They must have been working as a CIS Contractor for a minimum of 12 months and have 2 years' industry experience.

The maximum amount that will be considered for debt consolidation is £40,000.

The maximum overall LTV is 80%.

PAYE employees who have a fixed term contract directly with the employer are generally acceptable up to 95% loan to value.

• 1 years’ experience in the same industry/sector is required
• If there is less than 1 month remaining on the current contract, evidence of contract extension – or a copy of the new contract is required
• Gaps in contracts above 8 weeks will need to be referred to the Underwriting Team for individual assessment

We will consider lending in England, Wales and mainland Scotland
Accepted Islands : Anglesey (Wales), Isle of Wight (England), Isle of Skye (Scotland)

Re-types are accepted on purchases in Scotland. Re-types need to be arranged through our panel valuers.

Acceptable re-type firms are:
DM Hall
J & E Shepherd
David Adamson & Partners Ltd
Dixon Heaney Keen Kennedy Ltd
Hardies LLP
Samuel & Partners
SJ Omand Chartered Surveyors

The Society's ‘Heartland’ covers postcodes LA, CA, PR and FY.  We have specific products available to these areas.

Permanent Workers (Heartland)
 
Main Criteria Requirements:
 
•    Applicants must have either successfully completed their probation period or have been with their employer for 3 months – whichever comes first
•    No previous employment history is required for permanent Heartland workers
 
Heartland Increased Income Consideration:
 
•    100% of basic and guaranteed income can be used as assessable income
•    100% of non-guaranteed overtime/shift allowance can be accepted if 3 months’ payslips show evidence of this additional income.
•    100% of non-guaranteed bonuses can be accepted if evidenced and regular. 

Fixed Term Contract Workers (Heartland)
 
Heartland applicants who are on fixed term contracts are generally acceptable.
 
Contract Requirements:
 
•    Must have 6 months contracting experience in the industry in which they currently work
•    Current contract should be for a minimum period of 6 months
•    If the remaining time left on the current contract is 3 months or under – employer confirmation of renewal will be required (for a period not less than 6 months)
 
Heartland Increased Income Consideration:
 
•    100% of basic and guaranteed income can be used as assessable income
•    100% of non-guaranteed overtime/shift allowance can be accepted if 3 months’ payslips show evidence of this additional income.
•    100% of non-guaranteed bonuses can be accepted if evidenced and regular.
 
 
 
Apprentices (Heartland)
 
Apprentices are generally acceptable to the Society – if they live and work in our heartland (or will on completion).
 
Main Criteria Requirements:
 
•    Applicants must have either successfully completed their probation period or have been with their employer for 3 months – whichever comes first
•    No previous employment history is required for heartland apprentices
•    The apprenticeship scheme should be for a minimum period of 12 months
 
Heartland Increased Income Consideration:
 
•    100% of basic and guaranteed income can be used as assessable income
•    100% of non-guaranteed overtime/shift allowance can be accepted if 3 months’ payslips show evidence of this additional income.
•    100% of non-guaranteed bonuses can be accepted if evidenced and regular.
 
 
 
Additional Criteria for Advances > 80% LTV  (Heartland Cases)
 
 
Other criteria for Heartland advances >80% LTV:
 
•    Repayment basis only
•    The security to be the applicant’s main residence
•    The maximum term is 40 years
•    Term should end before the applicant’s 71st birthday *
•    Confirmation of the last 3 years address history to be obtained for all applicants - together with acceptable proof of residency.
•    Must comply with the Society’s impaired credit criteria
•    There must be an excess of income over expenditure based on the appropriate stress rate used as part of the affordability assessment
•    3 months bank statements – no exceeded overdraft limit/returned items
•    Permanent employment:  Must have either successfully completed their probation period or have been with their employer for 3 months – whichever comes first
•    Apprentices:  Must have either successfully completed their probation period or have been with their employer for 3 months – whichever comes first
•    Fixed term contractors: 6 months industry contracting experience. Must comply with Heartland Apprentice criteria
•    Acceptable source of deposit confirmed for purchases.
•    Self-employed:  2 years accounts – not more than 12 months old
•    Self-employed:  2 years SA302 statements together with either the corresponding tax overviews or an accountant’s reference.  Use of SA302 statements are not available to directors of limited companies

Are your clients repaying their HTB loan in full?

Here’s what your clients need to know ….

1.    Get a surveyor’s valuation report – this must be from a RICS certified surveyor and is payable by the clients themselves and must be sent to HTB customer services within 5 working days of the survey date.

There is criteria for the survey:

*surveyor must be RICS qualified and registered and MRICS or FRICS
*be independent of any estate agent 
*not be related or known to you
*inspect the inside of the property 
*provide at least 3 comparable properties and sale prices within the last 12 months – they must be like for like homes in type, size,age and within 2 miles of the property that is being inspected 
*provide bespoke market commentary and reference how the comparable properties provided justify the determination of market value 
 

2.     Find a conveyancer and instruct them – we have a large solicitor panel and to find out if they are on this please call 0800 988 1561 option 2.

3. Complete the Equity Loan Repayment Application Form – available on www.gov.uk 

4. Pay the administration fee of £200 via HTB customer services by bank transfer, online, debit card or cheque 

5.Receive a redemption letter – this will be issued when HTB customer services have received:
*the RICS valuation report 
*the completed application form
*the administration fee of £200 

IMPORTANT
Please also note that even though your clients require an independent RICS valuation we will conduct our own survey/valuation and will be guided by this only as a lender.  

We will accept:
•    Capital and Interest.
•    Interest-only (see repayment strategies below).
•    Part C&I and part interest-only (using interest-only repayment strategies below).

Acceptable to 80% LTV
•    Use of Pension Fund
•    Investments (stocks & shares, portfolios, ISAs etc)
•    Endowment policy or Equity PEP

Acceptable to 70% LTV
•    Sale of security – Downsizing
•    Sale of other properties

Satisfactory evidence of the repayment strategy must be provided as follows:
•    Collective investments – the fund value must be evidenced – via documentation dated in the last 3 months
•    Sale of other properties - the applicant must confirm the full address and postcode of the property being used as the repayment strategy and satisfactory evidence of the current property value. The current value of the property to be used as a repayment strategy should be at least equal to the balance of the proposed interest-only mortgage.
•    Sale of subject property (downsizing) - The applicants must demonstrate that a suitable property is in their target market to enable them to downsize. The minimum equity required at the time of application is £250,000 – unless the property is located in the Society’s Heartland, where the minimum equity requirement is £200,000. The ‘Heartland’ is located in the Lake District and Northwest, postcodes included in this definition are CA, LA, FY, PR. Downsizing is only available to applicants aged 69 and under at the time of application
•    Use of pension scheme lump sum. A projection of the value of the pension plan must be provided and it must equate to at least four times the mortgage amount based on the low projection rate.

A statement of Assets and Liabilities must be provided by the applicant in order that the reasonability of the strategy can be ascertained.

The Society can offer mortgages on a Joint Borrower Sole Proprietor basis where one of the joint borrowers is not going to be a co-owner, ie. they will not be named on the title deeds.  This is usually where a parent(s) wishes to assist a child purchasing a home, siblings will be considered on referral.

All applications will need to meet the Society’s current lending criteria.

It is important that applicants are fully aware of the following important additional requirements:

• The supporting borrower will need to seek separate and independent legal advice as part of the conveyancing process.
• All borrowers must sign the mortgage deed.

• Release of one of the borrowers from the mortgage will require approval from the Society and be based on the mortgage being affordable by the remaining parties. Any legal costs incurred will be the responsibility of the borrowers.

• The supporting borrower cannot reside in the property.

Where the term exceeds either of the borrowers expected retirement age or 75 years, whichever is the soonest, evidence of retirement income must be provided. Affordability will be based on the retirement income alone.

If your client is either already retired, or the mortgage term goes past their expected retirement age - the maximum LTV we can consider is 80%.
This is based on the oldest applicant’s age on their next birthday.

Loan to income multipliers 

£50,000 - 4.5x 

£50,001 - £80,000 - 5x

£80,001 and above - 6x, maximum 90% LTV

We accept up to 95% LTV across mainland England, Wales and Scotland, on Islands connected to the mainland by a bridge and on the Isle of Wight.

• Minimum loan £30,000
• Maximum loan £3,000,000 

Maximum loan limits are subject to the following LTV brackets:

• Max LTV of 95% loans up to £500k
• Max LTV of 90% loans up to £1m
• Max LTV of 80% loans up to £1.5m

Additional information:

• Flats should have a minimum internal floor area of 35 sq. metres (Houses and Bungalows 50 sq. metres). 
• Flats/maisonettes with uncontrolled deck access are not acceptable
• Properties with flat roofs will be subject to a satisfactory valuation. A mortgage condition confirming adequate management/maintenance may also be needed.
• Definition of New Build: Constructed less than 3 years earlier or previously unoccupied
• Leasehold requirement: Remaining lease term should be 85 years at commencement of the mortgage and/or 55 years at the end of the mortgage term
• Acreage guidance: Residential: 5 acres maximum up to 95% LTV, and 10 acres maximum up to 90% LTV. Buy to let/Holiday let: 2 acres maximum.

We generally accept applicants who are on maternity leave subject to the following:

• In all cases a ‘Return to work’ letter is required which must confirm the expected return to work date, the terms on which the applicant will return confirming if the hours and pay will change.
• If we are being asked to base our assessment on the return to work income then we will require a copy of the original employer letter to the applicant which confirms a breakdown of the income during the leave period and proof of background savings to cover any shortfall of income during this time.
• If the above cannot be provided then affordability will be based on SMP/SPP only.
• Sole applications and where the return to work is more than 26 weeks away should be referred to the BDM team.
• Future child care costs must be factored in to affordability.

• Minimum 5 years and maximum of 40 years
• Must be repaid by oldest applicants 80th birthday (see age section above if either applicants’ age exceeds the stated retirement age or age 75 years). Note, we use the age next birthday.

We will consider properties constructed using MMC - in addition to traditional methods of construction. The following construction types are generally considered acceptable – subject to the valuer confirming the security to be readily saleable and mortgageable via the valuation report.

• Traditional cavity wall – brick/block/stone
• Modern timber frame – with outer skin of either brick/block, brick slip, modern render board (minimum 50% masonry required), timber cladding (minimum 50% masonry required)
• Green oak frame – outer skin as above
• Modern steel frame (post 1989) – must carry a suitable Agrement Board Certificate and any relevant new build guarantees
• Pitched roof – slate/tile/metal (usually Zinc or Steel)/thatch
• Flat roof – metal (usually Zinc, Copper, Steel)

We allow Builders gifted deposits up to 5% of the purchase price – the applicant(s) must also contribute 5% as a deposit from savings or close family gift. Maximum LTV is 90% where a BGD is involved.

Other financial incentives (cashbacks, stamp duty, legal costs) are allowed up to 5% of the purchase price and the maximum LTV is 95% (houses only).

We have launched a new range of products within the ‘Own New’ scheme, designed to help both first time buyers and existing homeowners purchase a new property with a reduced interest rate.

The rate is reduced as the developer pays ‘Own New’ an incentive, for example 5% of a property value. This is then paid to us – and in return – a reduced rate (over the initial product term) is provided to the customer.

We have specific products available for ‘Own New’ and they can only be used for new build properties on specific ‘Own New’ sites. All brokers must be registered with ‘Own New’ and approved to advise on this scheme.

We will consider applicants who have used payday loan facilities:

• None are allowed within the last 12 months
• A maximum of 2 in the last 3 years
• The use of payday loans are viewed in relation to the overall credit history of the applicant and the affordability of the application.

The Society will consider applicants currently in a probationary period – provided an acceptable track record can be established. The applicant would need to have been with their previous employer for at least 12 months. There must with no gap between positions - and both the new and previous role must be in the same line of work. Previous income/employment would need to be evidenced.

Basic income should only be used for income multiples and affordability.

Minimum income £20,000.

For applicants employed within the Police Force – with a 2 year probationary period – we can consider provided they are at least 12 months into the role.

The following should be referred to a Senior Underwriter:

• Applications over 80% LTV
• Where an applicant has been in their new role for less than 3 months

EU/EEA/Swiss Nationals living in the UK, with settled status or  pre-settled status are acceptable up to 95% loan to value.
Applicants who hold a Visa from one of the following categories are acceptable up to 90% loan to value:
•    Health & Care Worker (qualified doctor, nurse, professional or adult social care professional) and work in an eligible health or social care job 
•    Spousal/ dependent Visa

•   Skilled Worker - evidenced by a ‘certificate of sponsorship’ (CoS) from the employer

12 months UK residency is required. 
No minimum time on Visa is required.

We consider both Right to Buy and Right to Acquire applications (houses only).

We will lend up to 100% of the discounted purchase price.

The mortgage applicants must be named on the Right to Buy Notice (Section 125)

We consider Section 106 and Affordable Housing applications on a residential basis only.

We require sight of the deed that details the occupancy restrictions and eligibility criteria to ensure this is not too onerous and a Mortgagee in Possession clause and Mortgagee Protection clause is stated on the deed.

We offer self build and renovation mortgages through our partner, Buildstore/Buildloan. Please contact them on 0345 223 4447 enquiries@buildloan.co.uk 
We don’t offer self build mortgages directly.

We require the last two years accounts for self employed applicants and use the latest year’s accounts for our affordability assessment. We may decide to base on an average of the last two years profit if we have concerns over the size of profit escalation.

 Where a customer has been trading for more than 1 year but less than 2, the application may be considered subject to evidence being provided of a track record of previous employment in a similar line of work. 1 year’s accounts can be provided in this instance.

 Accounts up to 18 months old can be accepted, with accounts over 12 months old requiring an accountant’s reference. 

This applies to Sole traders, Limited Company Directors, and LLPs and Partnerships.

We use the net monthly income for affordability using "Listen to the Taxman" 

• This product is designed for applicants who wish to facilitate a purchase before their existing home is sold, other similar scenarios considered but not where development finance or commercial lending would be more appropriate

• Available for mortgages that will be repaid within 2 years, the maximum term is therefore 2 years.  The product is ERC free.

• If interest only is required, a satisfactory repayment strategy must be in place. For short-term lending products sale of property may be an acceptable strategy. Please refer to the “Repayments Types” criteria for further information on acceptable repayment strategies.

• The Society’s standard lending criteria will apply including a full affordability assessment.

• Short-term lending products are standard mortgage products. Monthly repayments will be required throughout the term of the mortgage - interest will not be rolled up. Repayments are available on the capital and interest repayment basis or interest only subject to an acceptable repayment strategy (see above).

• Maximum LTV is 75% - cross charging may be an option, speak to a BDM about this

• Affordability must be proven taking into account all household expenditure and 2 households if applicable.

Please note that there is a free valuation package available on standard remortgages . This includes a basic valuation up to a maximum fee of £2,300 or £3m value.