Buy-to-let policy

· Properties must be managed by a professional management company that is a member of an appropriate professional organisation, such as MRICS or ARLA (ie not managed by the borrowers themselves).

· The property must be let under a formal tenancy agreement. The type of let must be either:

·   an assured shorthold tenancy (in Scotland, a short assured tenancy) for not more than one year or

·   a tenancy in favour of a limited company, local authority or housing association for a term not exceeding one year. A solicitor is required to ensure the let meets C&G requirements.

· The property should be of good quality, in sound structural condition, in a reasonable state of repair and be wholly used for residential purposes.

There is no minimum property value but consider carefully the value of the property and apply any local knowledge available to ensure it reflects that of a ‘good quality’ property in it’s location.

· All C&G’s standard construction policy requirements must be met.

· The property must not be split into separate units of accommodation (eg a house converted into two flats).

· A maximum of four tenants is acceptable, provided there is a single assured shorthold tenancy.

· C&G Buy-to-Let Mortgages are not available on properties where there is more than one tenancy agreement or where there would be an informal tenancy, eg student lets.

Buy-to-let products only

Buy-to-let product and valuation fees apply

Self-funding buy-to-lets

The expected rental income must be at least 120% of the monthly mortgage interest payment based on the pay rate and your clients have:

· a minimum income (sole or joint) of £35k and the loan is for £500k or less

· a maximum of 3 buy-to-let properties and/or a maximum lending portfolio size of £500k with Lloyds TSB Group (including C&G).

Applications are welcome for self-funding cases where there are more than 3 properties or the loan/buy-to-let lending portfolio with Lloyds TSB Group is more than £500k, but the case will be fully underwritten.

Where there are more than 3 properties and the loan/Lloyds TSB lending portfolio is for less than £500k:

· the expected rental income must be at least 120% of the monthly mortgage interest payment based on the current initial rate for the mortgage deal chosen and

· the customer’s income (excluding rental income) before tax must be at least £35,000 (sole or joint).

Applications will be referred to underwriters.

Where the loan/Lloyds TSB lending portfolio is £500k or more, as a guide:

· the expected rental income must be at least 125% of the monthly mortgage interest payment based on the current initial rate for the mortgage deal chosen and

· the customer’s income (excluding rental income) before tax must be at least £50,000 (sole or joint).

Applications will be referred to underwriters.

For non-self-funding buy-to-lets

The maximum loan amount is calculated using the customer’s income plus 50% of the expected rental income.

First-time buyers

Where all customers are first time buyers, their minimum income (excluding rental income) before tax, sole or joint, must be at least £35,000.

The maximum loan amount for first-time buyers is £500,000.

·          Maximum LTV is 75%.

·          Maximum LTV for newly built property is 65% - newly built is defined as any property that was first occupied less than six months ago.

·          Minimum and maximum age as per residential mortgages.

·          Customer must have a good credit score.

·          Customers who are married, in a civil partnership, co-habiting or whose  financial affairs are linked to each other’s, must not have a combined total of more than 9 buy-to-let properties with the Lloyds TSB group (Lloyds TSB/C&G/Scottish Widows) subject to a maximum lending amount of £5 million (this does not include the customer’s main residence).

·          Customers who have Lloyds TSB group mortgage commitments of more than £500,000, where an element of those commitments is or will be made up of buy-to-let mortgages, will be referred to underwriters - eg a customer who has a £450,000 Lloyds TSB residential mortgage and is applying for a £100,000 buy-to-let mortgage will need underwriter approval. 

·          Guarantor cases or builders’ incentive schemes, eg builders’ deposits, are not eligible for buy-to-let applications.

·          Right-to-buy applications cannot be accepted during the length of the discount repayment period. On applications for the right-to-buy made before 18 January 2005, the discount repayment period is 3 years from the purchase date. For applications made after this date, the repayment period is 5 years from the purchase date.