Furnished Holiday Let Criteria

85 (at the end of the mortgage term).

2

£25,000 per application.

Lending to companies or portfolio landlords is not accepted.

We will accept UK or foreign nationals for sole or joint applications.

For foreign nationals, these applicants must have permanent right to reside, indefinite leave to remain or pre-settled/settled status. Foreign nationals must have previously resided in the UK and, ideally, we would be able to locate a credit profile. Please note, foreign nationals from a high-risk country will require a referral.

For any applicant who holds permanent right to reside, indefinite leave to remain or pre-settled/settled status, we require their current passport in addition to the right to reside confirmation (this may be located in a previous expired passport).

For pre-settled/settled status, we would require their access share code for validation of their right to work/live in the UK. Details for this can be located on the government website; Prove your right to work to an employer: Overview (External) 

Applicant must be owner occupier. However, for Expat Furnished Holiday Let products, the applicant does not need to be an owner occupier.

Mortgage, loan, HP arrears and missed payments => 3 years prior to application: Status 1s and 2s are acceptable – status 3 or above not acceptable.

Mortgage, loan, HP arrears and missed payments within the last 3 years are not acceptable.

Credit card, mail order, utility commitments => 3 years prior to application: Up to and including status 2s are acceptable.

Credit card, mail order, utility commitments =< 3 years prior to application: Status 2 – OK to proceed subject to the commitment being up to date for a minimum of 12 months prior to application. Status => 3 are OK subject to commitments totalling less than £500 and being up to date for a minimum of 12 months prior to application.

The applicant must have been in their current business for a minimum of 3 years.

For applicants on fixed-term contracts of less than 6 months, the minimum period of employment with the same employer is 6 months. For those on contracts of 6 – 12 months, the contract must have been renewed at least once. If the contract is for more than 12 months, the applicant must be more than 6 months into the contract.

3 years’ trading accounts where these are available and/or projection from professional Holiday Let Agent confirming weekly rental income for low/medium/high season and expected occupancy levels.

For Expat Furnished Holiday Let applications there are no currency restrictions if the rental income passes our Interest Coverage Ratio of 145% at 5.5% or chosen product rate + 2% (whichever is the higher of the two) see our Interest Coverage Ratio section for more information. Please note there is an exception that we wouldn’t accept currencies from countries listed on our Expat Country Exclusion List, available to download here.

When calculating foreign income, we look at the close exchange rate on the date of application with a haircut % depending on the currency.

We will apply a 10% haircut to the following currencies: 

• US Dollar
• Euro 

 We will apply a 15% haircut to the following currencies:

• Oman Rial
• Norwegian Krone
• Swiss Franc
• Chinese Yuan Renminbi
• Emirati Dirham
• Saudi Arabian Riyal
• Hong Kong Dollar
• Kuwaiti Dinar
• Singapore Dollar
• Qatari Riyal
• Japanese Yen 

We will apply a 20% haircut to the following currencies:

• Bahraini Dinar
• Canadian Dollar
• Danish Krone
• Swedish Krona
• Bermudian Dollar (if pegged to US$)
• New Zealand Dollar
• Australian Dollar (if not residing in Australia) 

For all other currencies not mentioned above we would look at the lowest result of the three stress tests below:

• Current close rate minus a 20% haircut
• Lowest rate position over the last 10 years
• Difference of peak to trough from 5 year chart as swing % of 5 year high position. This swing % is then deducted from 5 year current close.

Minimum: 5 years

Maximum: 35 years

We will consider remortgage applications where the applicant has been the registered owner for the past 6 months.

Your client can apply for a mortgage on a repayment basis, or an interest only basis. Part and part is not accepted. FHLs will be stressed on I/O even if the application is on a repayment basis, providing the applicant appears to have the means to support the higher monthly payment (monthly surplus and a good credit file/evidence maintained a repayment mortgage with their current lender).

A new residential mortgage can be considered where the applicant wishes to retain their current property on a FHL basis.

A maximum of 3 mortgaged BTL/FHLs can be held across any number of lenders, maximum exposure £1,500,000. We do not accept portfolio landlords, which applies if an applicant holds 4 or more mortgaged BTL/FHLs.

Long-term occupants. The property is only available for short-term holiday lets. Personal occupation is restricted to a maximum of 90 days in any one year.

No long-term lets or sub-letting allowed.

Not acceptable.

England and Wales.

• Properties must be of traditional construction.
• Timber framed properties may be considered if brick clad.
• New build houses subject to NHBC/Local Authority Building Control Scheme/Premier/Checkmate(Castle 10)/Buildzone/Zurich/ICW (International Construction Warranties)/AHCI Ltd or Professional Consultants Certificates – maximum 75% LTV.
• Purpose built flats/maisonettes are acceptable (new builds not acceptable). Must be up to 60% LTV and leasehold.
• Flats/apartments more than 4 storeys. If above 4 storeys, they must be serviced by at least 1 lift. Flats above 6 storeys are not acceptable.

• Properties must be of traditional construction.
• HMOs, self-builds, properties held in Trust, present or former hotels/guest houses/B&Bs, commercial properties (even if applicants intend to convert back to residential).
• Holiday homes (such as static, mobile homes etc).
• Prefabricated properties.
• Studio flats and ex-local authority flats/maisonettes.
• New build flats.
• Flats above commercial property.
• Properties under 5 storeys with a flat roof are unacceptable security.
• Any construction covered by Housing Defect Legislation such as high alumina cement, prefabricate reinforced concrete, large panel system, BISF.
• Any property where an EWS1 form for wall cladding is required.

For leasehold, there must be a minimum of 85 years’ unexpired lease at the start of the mortgage and 55 years remaining at the end. The lease must allow the property to be let as a holiday home.