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Buy-to-Let Criteria

Mortgage Criteria for Buy-to-Let

There are many qualification criteria such as limits on first-time buyers or buy-to-let experience. It may be personal income or difficulties around self-employed income proof. Others may have issues with credit scores or a variety of other personal criteria.

In addition, there are property criteria such as day 1 remortgages or property type. It may be rental stress tests or difficulties with the property being near commercial properties. Others may have issues with tenancy types or a variety of other property-specific criteria. Our mortgage advisors will assess your personal circumstances and that of the property to help find the best mortgage given your needs and requirements.

Can I get a buy-to-let as a joint application?

Yes - most (but not all) mortgage lenders limit the number of applicants as up to 4. We have helped investors with almost every combination to think of including children & parents, cousins, business partners and so forth.

Can I get a buy-to-let on a new build?

Yes - most (but not all) mortgage lenders limit the loan to value on new build properties to around 75% LTV. This is to accommodate the "new build premium" that buyers pay, the value is expected to fall a little before keeping up with the rest of the local market.

What tenant types do lenders accept?

Mortgage conditions may restrict the type of tenancy you can have in the property. This is mainly tenancies that are viewed as higher risk; AirBNB, DSS Tenants or Students for example. You will have more lending options for professional working tenants. Viewed as a lower risk of default from a mortgage lender. Though we have mortgage lenders that are willing to look at every situation.

2019 has seen many lenders loosen criteria on DSS Tenants. Your mortgage lender on the survey will look at the saturation of a tenancy type in an area. Take for example a Surveyor commenting that an area is oversaturated with student accommodation, leading to questions about demand.

Can I Sublet my Buy-to-Let Property? (Rent-to-Rent)

Property Investors often manage properties themselves or instruct an agent on their behalf. Though not all, there is another way.

Other property investors will rent to another Landlord perhaps a local business, local authority, housing association or other Landlord.

A common phrase is rent-to-rent or SubLet.

Renting in this way will typically require a "special" mortgage given that your standard buy-to-let mortgage will permit renting on a single household basis usually with an only Assured Shorthold Tenancy (AST).

Buy-to-Let Lenders often do not permit other types of contracts.

On a survey of 56 Buy to Let Lenders:

  • 33 do not permit subletting
  • 09 had implicit restrictions
  • 14 permit subletting, in theory

With 25% allowing subletting we should tamper the excitement and suggest they too would be conditional.

One common condition was to allow the renting to Local Businesses only, who would rent to their employees. Some Lenders suggested that the employees would have to be named on the agreement. Other Lenders that it had to be a large corporate business with over 1,000 staff.

Other lending conditions were ensuring that the end tenant was "suitable" by their definition. Therefore preventing a contract with an organisation that houses "vulnerable people". Ruling out housing associations helping with drug rehabilitation for example.

We have had cases declined where the end tenant would receive Housing Benefits (LHA/Universal Credit).

Others buy-to-let lenders said it was on a "case by case" basis.

As well as restrictions on the type of subletting organisation that will be permitted. Other typical mortgage conditions remain.

If an organisation wanted to use the property as an HMO or AirBnB, then you would require a mortgage that allowed both Subletting and HMO. That permitted Subletting and Airbnb.

Those landlords wanting to enter into these contracts will find the Buy-to-Let Mortgage Market Restricted. Limiting the products so you may not get the market-leading rates.

The takeaway from this article:

  • You can get mortgages to sublet.
  • The sublet mortgage market is restricted.
  • If you are subletting check your mortgage conditions.

Get in touch

We are your online mortgage broker, offering you the convenience of applying for a mortgage online. However, we understand that sometimes you may prefer to speak with a human - phone, email or in person.

Phone number
01133 205 902
Postal address

31 Bradford Chamber Business Park,

New Lane, Bradford, BD4 8BX

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and / or
FCA Authorised

We are authorised and regulated by the Financial Conduct Authority (No. 919921). The FCA does not regulate most Buy to Let mortgages.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

British Company

Cyborg Finance Limited is registered in England and Wales (No. 12131863) at Bradford Chamber, New Lane, Bradford, BD4 8BX

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