Lending Criteria
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Please note this is our lending criteria for new applications only. All applications are subject to affordability checks, credit searches, underwriter assessment, and a valuation of the property to be mortgaged. Perenna reserves the right to update and amend our criteria at any time. Meeting the following criteria is not a guarantee that we will lend.
If you have a complex enquiry or cannot find the information you need on this page, please Contact Us.
For tips on how to package your application and what documentary evidence we accept, visit our Packaging Tips page.
Applicants
Address History
All applicants must provide 18 months UK address history.
Adverse Credit
Perenna is seeking to originate prime residential mortgages. Applicants with an adverse credit history will generally be declined.
We define adverse credit as any arrears, bankruptcy (or similar), IVA, defaults, County Court Judgements (CCJs) and repossessions.
We may be prepared to consider applicants with single, isolated, or minor instances of adverse credit history. Please see additional information below:
Bankruptcy, IVA, DMP, or similar
If an applicant has a bankruptcy (or equivalent) or IVA registered within the last 6 years, whether settled of otherwise, we will not lend.
Perenna can lend only where a bankruptcy or IVA has been discharged for a minimum of 6 years.
CCJ
We will accept 1 small CCJ up to the value of £200.
If the CCJ is greater than £200 or if any CCJ has occurred in the last 6 months, the application will be declined.
Arrears
We will decline applications that have evidence of recent arrears. Specifically, applications will be declined where we identify:
• Any current arrears
• Any arrears on mortgages / secured loans in the last 36 months
• Any arrears on unsecured credit in the last 6 months
Defaults
We will decline applications:
• Where 2 or more defaults have been registered in the last 6 years
• With any default recorded in the last 6 months
• Where the original value of defaults exceeds £500
Short Term Loans / Payday Loans
Any application where a short-term loan has been opened in the last 12 months will be declined.
Notice of Correction
If the credit bureau data returned includes a Notice of Correction or a Notice of Dispute, then the application will automatically be referred to our underwriters for assessment. Evidence to confirm the content of the notice may be required to allow the application to proceed.
Credit Score
Applicants must meet our minimum credit score. This is not the same as the Experian credit score available to applicants. In some circumstances, customers with adverse credit history or a thin credit file may still be declined even where they do not fail any of the other adverse credit rules.
We define adverse credit as any arrears, bankruptcy (or similar), IVA, defaults, County Court Judgements (CCJs) and repossessions.
We may be prepared to consider applicants with single, isolated, or minor instances of adverse credit history. Please see additional information below:
Bankruptcy, IVA, DMP, or similar
If an applicant has a bankruptcy (or equivalent) or IVA registered within the last 6 years, whether settled of otherwise, we will not lend.
Perenna can lend only where a bankruptcy or IVA has been discharged for a minimum of 6 years.
CCJ
We will accept 1 small CCJ up to the value of £200.
If the CCJ is greater than £200 or if any CCJ has occurred in the last 6 months, the application will be declined.
Arrears
We will decline applications that have evidence of recent arrears. Specifically, applications will be declined where we identify:
• Any current arrears
• Any arrears on mortgages / secured loans in the last 36 months
• Any arrears on unsecured credit in the last 6 months
Defaults
We will decline applications:
• Where 2 or more defaults have been registered in the last 6 years
• With any default recorded in the last 6 months
• Where the original value of defaults exceeds £500
Short Term Loans / Payday Loans
Any application where a short-term loan has been opened in the last 12 months will be declined.
Notice of Correction
If the credit bureau data returned includes a Notice of Correction or a Notice of Dispute, then the application will automatically be referred to our underwriters for assessment. Evidence to confirm the content of the notice may be required to allow the application to proceed.
Credit Score
Applicants must meet our minimum credit score. This is not the same as the Experian credit score available to applicants. In some circumstances, customers with adverse credit history or a thin credit file may still be declined even where they do not fail any of the other adverse credit rules.
Age - Max
Perenna has no maximum age for an applicant, however additional criteria apply to older applicants.
See the Lending into Retirement section.
See the Lending into Retirement section.
Age - Min
Applicants must be at least 18 years old at the point of application.
Applicants - Number
We will lend to a maximum of 2 applicants per application.
BFPO Addresses
We will consider BFPO and other military deployment (e.g., HM Ships, Naval Parties, Exercises etc) addresses as a UK residential address for the purposes of address history.
The addresses allowed as such will be those listed on the UK Government website under “British Forces Post Office locations”).
https://www.gov.uk/government/publications/british-forces-post-office-locations.
Perenna may in those circumstances request evidence of residency on a case-by-case basis such as a letter from the applicants commanding officer.
If there is a mainland UK based residency this address will also need to be declared.
The addresses allowed as such will be those listed on the UK Government website under “British Forces Post Office locations”).
https://www.gov.uk/government/publications/british-forces-post-office-locations.
Perenna may in those circumstances request evidence of residency on a case-by-case basis such as a letter from the applicants commanding officer.
If there is a mainland UK based residency this address will also need to be declared.
Criminal Convictions
We will not lend to customers who have a criminal record unless the conviction is as follows:
• A minor traffic offence (dealt with by fixed penalty points such as speeding or parking offences)
• Where the conviction is spent under the Rehabilitation of Offenders Act 1974
• A minor traffic offence (dealt with by fixed penalty points such as speeding or parking offences)
• Where the conviction is spent under the Rehabilitation of Offenders Act 1974
Diplomatic Immunity
We do not accept applications from individuals with diplomatic immunity.
Nationality
• Minimum length of time in the UK 18 months minimum.
• For applicants without indefinite rights to remain, the main applicant must be on a Tier 1 or 2 Visa and earn a minimum annual income of £50K. This income requirement applies to the main applicant only, not the combined income of a joint application. Other applicants on the mortgage who are dependents (and not on a Tier 1 or 2 Visa) can be included, provided their visa has the same end date.
• There must be a minimum of 12 months to remain on the visa at the point of application.
• EU nationals can continue to be accepted with pre-settled or settled status providing they have been resident in the UK for a minimum period of 18 months.
• No LTV restrictions are in place.
• For applicants without indefinite rights to remain, the main applicant must be on a Tier 1 or 2 Visa and earn a minimum annual income of £50K. This income requirement applies to the main applicant only, not the combined income of a joint application. Other applicants on the mortgage who are dependents (and not on a Tier 1 or 2 Visa) can be included, provided their visa has the same end date.
• There must be a minimum of 12 months to remain on the visa at the point of application.
• EU nationals can continue to be accepted with pre-settled or settled status providing they have been resident in the UK for a minimum period of 18 months.
• No LTV restrictions are in place.
Offshore workers
Applicants who work offshore must be resident in UK for tax purposes, paid in GBP £sterling and are onshore living at a UK address for more than 50% of the year.
Residency
All applicants must currently physically reside in the UK, be tax resident in the UK and be paid in GBP £sterling.
Vulnerable Customers
A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm. Perenna is committed to meeting all our customers’ needs in identifying and managing vulnerability throughout the full lifecycle of the customer journey.
If you consider your applicant to be vulnerable, please let us know how we can best support them.
If you consider your applicant to be vulnerable, please let us know how we can best support them.
Application
Back-to-Back Transactions
A back-to-back transaction is where the property being purchased or remortgaged has been previously sold during the last 6 months.
We will only lend by exception.
A typical exception for a back-to-back transaction would be scenarios such as probate or purchase/sale by a developer.
Lending will be based on the current market value or the original purchase price/probate value, whichever is lower.
We will only lend by exception.
A typical exception for a back-to-back transaction would be scenarios such as probate or purchase/sale by a developer.
Lending will be based on the current market value or the original purchase price/probate value, whichever is lower.
Builders Incentives
Financial incentives from builders’ (e.g., deposit paid, cashback, stamp duty paid) will be limited to 5% of the purchase price or valuation (whichever is lower).
Where other non-financial incentives are offered (e.g., upgraded fixtures and fittings) these should be proportionate to the overall value, size, and location of the property.
A minimum of 5% deposit from other sources will be required over and above any builders’ incentives.
Where other non-financial incentives are offered (e.g., upgraded fixtures and fittings) these should be proportionate to the overall value, size, and location of the property.
A minimum of 5% deposit from other sources will be required over and above any builders’ incentives.
Debt Consolidation
Debt consolidation is an acceptable loan purpose. All commitments, regardless of whether they are to be repaid or remain post completion, should be entered into the affordability calculator.
Deposit
Gifted deposits received from a close family member, such as a mother, father, siblings or grandparents can be accepted. The Gifted Deposit Form must be completed and submitted with the application prior to offer.
Fees
A product fee can be added to the loan above the product LTV subject to a maximum application LTV of 95%.
If the product fee is added to the loan, the total loan amount, including the fee must be affordable.
If the product fee is added to the loan, the total loan amount, including the fee must be affordable.
Interest Only
Available up to a maximum term of 25 years.
Maximum LTV of 75% (including product fees).
Loans must be affordable on a capital and interest basis.
Acceptable repayment vehicles are as follows:
Sale of property. A future sale of the mortgaged property is acceptable, subject to there being equity at completion of at least £300,000 for properties in London and the South East and £150,000 elsewhere. You can find a list of postcodes to help determine the area of the property in Our useful documents section of the website. Lending beyond retirement age is not acceptable for Sale of Mortgaged Property.
Savings and Investments where the current value is sufficient to repay the loan amount. Investments linked to stocks and shares must the loan balance when assuming a 20% reduction in value. We aren’t able to accept forecast values.
Sale of other property where the current equity available in the property(s) is sufficient to repay the loan amount.
Pension lump sum can be used where 25% of the current value of the pension pot (to represent a typical lump sum), equates to greater than or equal to the loan amount. Forecast pension balances are not acceptable.
Maximum LTV of 75% (including product fees).
Loans must be affordable on a capital and interest basis.
Acceptable repayment vehicles are as follows:
Sale of property. A future sale of the mortgaged property is acceptable, subject to there being equity at completion of at least £300,000 for properties in London and the South East and £150,000 elsewhere. You can find a list of postcodes to help determine the area of the property in Our useful documents section of the website. Lending beyond retirement age is not acceptable for Sale of Mortgaged Property.
Savings and Investments where the current value is sufficient to repay the loan amount. Investments linked to stocks and shares must the loan balance when assuming a 20% reduction in value. We aren’t able to accept forecast values.
Sale of other property where the current equity available in the property(s) is sufficient to repay the loan amount.
Pension lump sum can be used where 25% of the current value of the pension pot (to represent a typical lump sum), equates to greater than or equal to the loan amount. Forecast pension balances are not acceptable.
Lending into Retirement
Perenna apply a standard retirement age of the lower of the applicants declared retirement age, or 70 years old.
Where an applicant is within 10 years of retirement, and the loan term extends beyond the retirement date, we will assess affordability based on the lower of employed or projected retirement income.
Where an applicant is more than 10 years from retirement, but more than half of the mortgage term is beyond retirement age we will also assess affordability on the lower of employment income or projected retirement income.
Applicants who are already retired will be assessed based upon their current retirement income.
LTV will be restricted to 70% where the oldest applicant is aged 65 or above at the date of the application, and/ or their age at the end of the mortgage term exceeds 85.
Where the age of the oldest applicant is 80 or above at the date of application, the applicant must obtain independent legal advice. The legal advisor must complete a declaration form confirming the applicant understands and consents to the mortgage terms.
Where an applicant is within 10 years of retirement, and the loan term extends beyond the retirement date, we will assess affordability based on the lower of employed or projected retirement income.
Where an applicant is more than 10 years from retirement, but more than half of the mortgage term is beyond retirement age we will also assess affordability on the lower of employment income or projected retirement income.
Applicants who are already retired will be assessed based upon their current retirement income.
LTV will be restricted to 70% where the oldest applicant is aged 65 or above at the date of the application, and/ or their age at the end of the mortgage term exceeds 85.
Where the age of the oldest applicant is 80 or above at the date of application, the applicant must obtain independent legal advice. The legal advisor must complete a declaration form confirming the applicant understands and consents to the mortgage terms.
Let to Buy
By Let to Buy we mean applications where applicant intends to let their existing property to enable them to purchase a new residential property for them to reside.
These application types must be keyed as a purchase and you must enter the existing residential address as a background BTL.
We will need to see a copy of the BTL mortgage offer prior to issuing our loan offer.
These application types must be keyed as a purchase and you must enter the existing residential address as a background BTL.
We will need to see a copy of the BTL mortgage offer prior to issuing our loan offer.
Loan Purpose – Acceptable
Acceptable loan purposes are:
• House purchase
• Remortgage
• Remortgage with additional borrowing to be used for:
- Debt consolidation
- Home improvement
- Fully redeeming a Help to Buy equity loan
- Buying the final share in a Shared Equity scheme
- Buying the freehold title for the property to be mortgaged
- Extending the lease for the property to be mortgaged
- Buying out another person’s interest in the property (Transfer of Equity)
- Fully repaying a second (or subsequent) charge on the property to be mortgaged
- Lifestyle reasons e.g., weddings, purchase of car, holidays etc.
- Purchase of additional land to extend security
• House purchase
• Remortgage
• Remortgage with additional borrowing to be used for:
- Debt consolidation
- Home improvement
- Fully redeeming a Help to Buy equity loan
- Buying the final share in a Shared Equity scheme
- Buying the freehold title for the property to be mortgaged
- Extending the lease for the property to be mortgaged
- Buying out another person’s interest in the property (Transfer of Equity)
- Fully repaying a second (or subsequent) charge on the property to be mortgaged
- Lifestyle reasons e.g., weddings, purchase of car, holidays etc.
- Purchase of additional land to extend security
Loan Purpose – Unacceptable
Unacceptable loan purposes include, but are not limited to:
• Purchase under the Right to Buy scheme
• Any form of staircasing on a shared ownership agreement’
• Purchase of building plot(s)
• Purchase of a timeshare property
• Partially built properties/conversions
• Buy a share in a freehold
• Purchase of stocks and shares
• Currency speculation
• Gambling
• Payment of tax or business purposes
• Any other purpose which could be considered unethical, unsafe, or otherwise
• Purchase under the Right to Buy scheme
• Any form of staircasing on a shared ownership agreement’
• Purchase of building plot(s)
• Purchase of a timeshare property
• Partially built properties/conversions
• Buy a share in a freehold
• Purchase of stocks and shares
• Currency speculation
• Gambling
• Payment of tax or business purposes
• Any other purpose which could be considered unethical, unsafe, or otherwise
Loan Size
Maximum loan size: £1m (N.B. all loans over £1m will refer for an underwriter review at DIP).
Minimum loan size: £25,000
Maximum individual exposure: £1m
Minimum loan size: £25,000
Maximum individual exposure: £1m
Loan to Value
The maximum LTV thresholds are as follows:
• 95% LTV available for loans up to 750k (subject to product availability)
• 90% LTV available for loans up to 1m (subject to product availability)
• 90% New build houses (or 95% LTV with Deposit Unlock for loans up to £750k)
• 80% New Build Flats
• 75% where the new property is not the main residence e.g., second/holiday home
• 70% where either applicant is lending into retirement (later life lending borrowers where either 10 years from retirement or where at least half of the loan is during retirement).
• 95% LTV available for loans up to 750k (subject to product availability)
• 90% LTV available for loans up to 1m (subject to product availability)
• 90% New build houses (or 95% LTV with Deposit Unlock for loans up to £750k)
• 80% New Build Flats
• 75% where the new property is not the main residence e.g., second/holiday home
• 70% where either applicant is lending into retirement (later life lending borrowers where either 10 years from retirement or where at least half of the loan is during retirement).
Offer Validity
Remortgage offers are valid for 90 days.
Purchase offers are valid for 150 days.
Purchase offers are valid for 150 days.
Repayment Type
We accept applications on either a full repayment (capital and interest) basis or interest only basis.
Retirement Interest Only (RIO)
Retirement Interest Only (RIO)
• The minimum age is 50 for all applicants at the point of application.
• Maximum LTV of 60% (including any fees added to the loan).
• Affordability will be assessed on an interest only basis.
• If any applicants are not yet retired, the lower of non-retired income and retirement income will be used in the affordability assessment.
• No repayment vehicle is required for a RIO mortgage and there is no set term for the loan. The customer will be required to repay the capital balance after a specific life event. These events include the sale of the property, the applicant moving into long term care with no intention of returning to the property, a breach of the mortgage terms by the customer, or the death of the customer.
• To use both incomes for affordability on a joint application, the income or source of income must be transferrable upon death, or the applicants must intend to sell the property. This is to ensure that there is a plan in place to ensure the mortgage remains affordable in the event of the death of a joint borrower. Perenna will consider all realistic and prudent plans for continuing to pay the mortgage in the event of a joint borrower death, including that the surviving borrower intends to sell the property in that circumstance.
• Brokers must explain to any applicants who would like to proceed with a purchase RIO application that they will need to obtain independent legal advice. The independent legal advisor must complete a declaration confirming the applicant understands and consents to the mortgage terms.
• Remortgage applications for RIO products include fees assisted legal work with our partner law firm. This firm will conduct a face-to-face meeting at the applicants home prior to completion. This is to ensure that they fully understand the mortgage terms and conditions.
• For any joint RIO applications, the property needs to be owned on a Joint Tenancy basis rather than Tenants in Common.
• The minimum age is 50 for all applicants at the point of application.
• Maximum LTV of 60% (including any fees added to the loan).
• Affordability will be assessed on an interest only basis.
• If any applicants are not yet retired, the lower of non-retired income and retirement income will be used in the affordability assessment.
• No repayment vehicle is required for a RIO mortgage and there is no set term for the loan. The customer will be required to repay the capital balance after a specific life event. These events include the sale of the property, the applicant moving into long term care with no intention of returning to the property, a breach of the mortgage terms by the customer, or the death of the customer.
• To use both incomes for affordability on a joint application, the income or source of income must be transferrable upon death, or the applicants must intend to sell the property. This is to ensure that there is a plan in place to ensure the mortgage remains affordable in the event of the death of a joint borrower. Perenna will consider all realistic and prudent plans for continuing to pay the mortgage in the event of a joint borrower death, including that the surviving borrower intends to sell the property in that circumstance.
• Brokers must explain to any applicants who would like to proceed with a purchase RIO application that they will need to obtain independent legal advice. The independent legal advisor must complete a declaration confirming the applicant understands and consents to the mortgage terms.
• Remortgage applications for RIO products include fees assisted legal work with our partner law firm. This firm will conduct a face-to-face meeting at the applicants home prior to completion. This is to ensure that they fully understand the mortgage terms and conditions.
• For any joint RIO applications, the property needs to be owned on a Joint Tenancy basis rather than Tenants in Common.
Retrofit Discount Feature
Our remortgages come with an optional retrofit discount feature, for those customers who intend to retrofit their home.
To find out more about the discount and the process, you can view our handy guide here.
To find out more about the discount and the process, you can view our handy guide here.
Term
Min term: 10 years
Max term: 40 years (subject to product availability)
Max term: 40 years (subject to product availability)
Affordability - Income
Accountant Qualifications
Accounts Certificates must be completed by a suitable qualified accountant, with one of the following qualifications:
Institute of Chartered Accountants in England and Wales ACA / FCA
Institute of Chartered Accountants in Scotland CA
Institute of Chartered Accountants in Ireland / Chartered Accountants Ireland CA
Association of Chartered Certified Accountants ACCA / FCCA
Association of Authorised Public Accountants AAPA / FCPA
Chartered Institute of Management Accountants ACMA / FCMA
Association of Accounting Technicians MAAT / FMAAT
Association of International Accountants AAIA / FAIA
Institute of Financial Accountants AFA / FFA
Institute of Chartered Accountants in England and Wales ACA / FCA
Institute of Chartered Accountants in Scotland CA
Institute of Chartered Accountants in Ireland / Chartered Accountants Ireland CA
Association of Chartered Certified Accountants ACCA / FCCA
Association of Authorised Public Accountants AAPA / FCPA
Chartered Institute of Management Accountants ACMA / FCMA
Association of Accounting Technicians MAAT / FMAAT
Association of International Accountants AAIA / FAIA
Institute of Financial Accountants AFA / FFA
Cash Payments
Applicants who are paid in cash or receive handwritten payslips must provide 3 months bank statements that correspond with their last 3 months’ payslips.
Contractors
Contractors working both inside and outside IR35 are acceptable.
We will assess Contractors’ income using the following method to calculate their annual income: Gross Day Rate x Contracted number of days (max 5) x 46 weeks.
Contractors must have:
• At least 3 months remaining on their current contract at the date of application
• A minimum 24-month track record in a similar line of work or the same industry
• No more than a 6-week gap in contracts or employment in the last 12 months
Where the latest contract is less than 3 months old, we will use the lower of the current contract day rate and previous contract day rate for assessment.
It is acceptable for a contractor to have a limited company, provided they do not employ other contractors or have more than 1 contract in place.
We will assess Contractors’ income using the following method to calculate their annual income: Gross Day Rate x Contracted number of days (max 5) x 46 weeks.
Contractors must have:
• At least 3 months remaining on their current contract at the date of application
• A minimum 24-month track record in a similar line of work or the same industry
• No more than a 6-week gap in contracts or employment in the last 12 months
Where the latest contract is less than 3 months old, we will use the lower of the current contract day rate and previous contract day rate for assessment.
It is acceptable for a contractor to have a limited company, provided they do not employ other contractors or have more than 1 contract in place.
Employment Income
We will accept 100% of guaranteed or regular fixed income, including:
• Basic salary
• Car allowance
• Location allowance
• Large city allowances
• Shift allowances
We will accept 50% of non-guaranteed or non-regular income, including:
• Bonuses
• Overtime
• Commission
The amount of variable income we accept will be the lower of; the last 3 months average amount received OR the annualised year to date amount received.
For variable income which is not received monthly, such as annual bonuses, we will assess affordability based upon the lower of the latest year received amount, OR the average of the last two years.
• Basic salary
• Car allowance
• Location allowance
• Large city allowances
• Shift allowances
We will accept 50% of non-guaranteed or non-regular income, including:
• Bonuses
• Overtime
• Commission
The amount of variable income we accept will be the lower of; the last 3 months average amount received OR the annualised year to date amount received.
For variable income which is not received monthly, such as annual bonuses, we will assess affordability based upon the lower of the latest year received amount, OR the average of the last two years.
Family Employment
Where an applicant is employed by their family business, the last 3 months bank statements must be provided which correspond with their last 3 months’ payslips.
Fixed Leave of Absence
Maternity / Paternity / Adoption Leave
If the applicant is due to go on or is already on parental leave you must update the number of dependants within the application accordingly and ensure you include the expected childcare costs.
The applicant must provide:
- their latest payslip prior to going on parental leave and
- their current payslip which shows their parental leave income, or
- a letter from their employer confirming the terms of their parental leave, and
- a copy of their return to work letter
The return to work letter must be addressed to the applicant and include confirmation of their return-to-work date, return to work salary, and that they are intending to return on the same terms and conditions.
If the return-to-work date more than 12 months away, we will not be able to use this income within the affordability assessment.
If the return to work date is more than 4 months away but within 12 months, we can use the return to work pay. The applicant will however need to evidence how they intend to support the mortgage if the mortgage is deemed unaffordable for the period, they’re in receipt of parental leave pay.
If return to work is within the next 4 months, the full return to work pay can be used.
Sick Leave / Long Term Absence
If the customer is on sick leave, they must have a return-to-work date within the next 3 months to consider their return-to-work salary. In these cases enter their return to work salary in the application form.
If the applicant is due to go on or is already on parental leave you must update the number of dependants within the application accordingly and ensure you include the expected childcare costs.
The applicant must provide:
- their latest payslip prior to going on parental leave and
- their current payslip which shows their parental leave income, or
- a letter from their employer confirming the terms of their parental leave, and
- a copy of their return to work letter
The return to work letter must be addressed to the applicant and include confirmation of their return-to-work date, return to work salary, and that they are intending to return on the same terms and conditions.
If the return-to-work date more than 12 months away, we will not be able to use this income within the affordability assessment.
If the return to work date is more than 4 months away but within 12 months, we can use the return to work pay. The applicant will however need to evidence how they intend to support the mortgage if the mortgage is deemed unaffordable for the period, they’re in receipt of parental leave pay.
If return to work is within the next 4 months, the full return to work pay can be used.
Sick Leave / Long Term Absence
If the customer is on sick leave, they must have a return-to-work date within the next 3 months to consider their return-to-work salary. In these cases enter their return to work salary in the application form.
Income Types
We will accept income paid in GBP £Sterling only, from any of the following sources:
• Permanent Employment
• Professional Contracting
• Self-employment
• Non-permanent employment
• Retirement
• Permanent Employment
• Professional Contracting
• Self-employment
• Non-permanent employment
• Retirement
Job Offers / Promotions
We will not accept income for affordability purposes based on a new job offer where the applicant is not currently in role.
Where an applicant’s promotion or pay rise is with their existing employer and is due to take effect within 1 month of submitting their application, the higher income can be used subject to receipt of confirmation in writing from the employer.
Where an applicant’s promotion or pay rise is with their existing employer and is due to take effect within 1 month of submitting their application, the higher income can be used subject to receipt of confirmation in writing from the employer.
Limited Liability Partnership (LLP)
We will take the latest years income for assessment. A two year track record must be provided.
Income evidence:
Last two years' compensation statements (which provide a breakdown of the applicant’s total remuneration for the last 2 years), or letter from HR/Finance Director verifying the total remuneration for each of the last two years, or last two years HMRC tax returns and corresponding Tax Year Overviews
Income evidence:
Last two years' compensation statements (which provide a breakdown of the applicant’s total remuneration for the last 2 years), or letter from HR/Finance Director verifying the total remuneration for each of the last two years, or last two years HMRC tax returns and corresponding Tax Year Overviews
Non-Permanent Employment
Employment via an agency, seasonal work, fixed term contracts, piecework, and zero hours employment is only acceptable where a consistent 2 year track record in a similar line of work can be demonstrated.
Other Income
PIP/DLA
This can be accepted at 100% if it is for an applicant.
Maintenance Income
Will be taken at 50%.
The applicant will need to provide evidence demonstrating receipt of these payments for 3 months and the agreement must last for the full duration of the mortgage term.
Investment Income
We do not accept income from Dividends, investments, trusts, or rental properties.
Other benefits
We do not accept income from other benefits including but not limited to, Child Benefit or Universal Credit.
This can be accepted at 100% if it is for an applicant.
Maintenance Income
Will be taken at 50%.
The applicant will need to provide evidence demonstrating receipt of these payments for 3 months and the agreement must last for the full duration of the mortgage term.
Investment Income
We do not accept income from Dividends, investments, trusts, or rental properties.
Other benefits
We do not accept income from other benefits including but not limited to, Child Benefit or Universal Credit.
Pension Income
We accept income from both State and Private pensions.
Where an applicant is within 10 years of retiring at the point of the application (using the minimum of declared retirement age or 70, whichever is lower), or if more than half of the mortgage term at application is beyond the retirement age, we will assess affordability based on the lower of employed or projected retirement income.
Where an applicant is within 10 years of retiring at the point of the application (using the minimum of declared retirement age or 70, whichever is lower), or if more than half of the mortgage term at application is beyond the retirement age, we will assess affordability based on the lower of employed or projected retirement income.
Second Jobs
Where an applicant has income from more than one employment source or type, we will use 100% of the main source of income, and 50% of the second.
By exception we may access up to 100% of second or third incomes. This may be appropriate where an applicant has more than one part time job, multiple pensions, or is a bank nurse as well as a full time staff nurse.
Complex income scenarios should be discussed with Intermediary Support prior to submission.
By exception we may access up to 100% of second or third incomes. This may be appropriate where an applicant has more than one part time job, multiple pensions, or is a bank nurse as well as a full time staff nurse.
Complex income scenarios should be discussed with Intermediary Support prior to submission.
Self Employment
A self-employed applicant may be either a:
• Sole Trader
• Partner in a Partnership
• Director of a limited or public company with a shareholding of at least 25%.
A Ltd Co Director with a shareholding of less than 25% will be treated as employed.
Sole Traders and Partnerships
We will take an average of the last 2 years share of net profit after tax OR the latest year’s net profits if lower.
Applicants are expected to have been self employed for a minimum of two years.
Ltd Co Directors
We will take an average of the last 2 years share of net profits after tax OR the latest year’s share of net profits after tax if lower, PLUS salary/directors renumeration.
We will not take dividend payments from retained profits.
The business generating the income must have been operational for a minimum of two years and be able to produce 2 full years accounts.
The latest set of accounts must be no older than 18 months.
• Sole Trader
• Partner in a Partnership
• Director of a limited or public company with a shareholding of at least 25%.
A Ltd Co Director with a shareholding of less than 25% will be treated as employed.
Sole Traders and Partnerships
We will take an average of the last 2 years share of net profit after tax OR the latest year’s net profits if lower.
Applicants are expected to have been self employed for a minimum of two years.
Ltd Co Directors
We will take an average of the last 2 years share of net profits after tax OR the latest year’s share of net profits after tax if lower, PLUS salary/directors renumeration.
We will not take dividend payments from retained profits.
The business generating the income must have been operational for a minimum of two years and be able to produce 2 full years accounts.
The latest set of accounts must be no older than 18 months.
Time in Employment
Applicants must have been employed for a minimum of three months in their current role and be able to provide payslip(s) covering their first month. Applicants in role longer than 3 months will need to provide their latest payslip.
Affordability - Expenditure
Background BTL Properties
Background BTL properties can be deemed self-supporting provided the total portfolio rental exceeds the interest only amount of the balances at a notional rate of 5.5%.
Where the applicants have declared the BTL mortgage monthly payments higher than the notional rate calculation, the higher figure will need rental cover of at least 125%.
Any shortfalls will be included as loan commitments for affordability.
Surplus rental income won’t be factored into affordability.
Where an applicant has a vehicle such as a Ltd Co set up for their BTL portfolio this will be treated in the same way.
Where the applicants have declared the BTL mortgage monthly payments higher than the notional rate calculation, the higher figure will need rental cover of at least 125%.
Any shortfalls will be included as loan commitments for affordability.
Surplus rental income won’t be factored into affordability.
Where an applicant has a vehicle such as a Ltd Co set up for their BTL portfolio this will be treated in the same way.
Background Residential Mortgages
We will stress background residential mortgages that are to be retained at 120% of their current monthly payment.
Committed Expenditure
If applicable, the following commitments must be declared in the mortgage application:
• Child maintenance or spousal maintenance payments.
• Student loans.
• Unsecured loans.
• Credit Cards (including current account overdrafts).
• Background mortgages (both residential and BTL).
• Buy Now, Pay Later commitments (the future monthly commitment should be used for affordability when deferred).
• Child maintenance or spousal maintenance payments.
• Student loans.
• Unsecured loans.
• Credit Cards (including current account overdrafts).
• Background mortgages (both residential and BTL).
• Buy Now, Pay Later commitments (the future monthly commitment should be used for affordability when deferred).
Credit Cards
Monthly repayments for credit cards and overdraft balances will be calculated using 4% of the current outstanding balance.
High Indebtedness
Applicants who have monthly unsecured debt payments that are greater than 75% of their net disposable income will be declined.
Property and Security
Acreage
Properties with over 1 acre of land will be considered. There must be no agricultural restrictions in place and there must be no current or intended use of the land for any agricultural or business purposes. Properties with less than 1 acre are subject to standard lending policy.
Annexes
A single annexe is acceptable. It must be self contained with no shared facilities. The annexe should be for immediate family use only.
Use of an annexe for AirBnB or similar is not acceptable.
Use of an annexe for AirBnB or similar is not acceptable.
AVM/ Valuation
We will attempt an AVM on most applications. Where we receive a successful AVM and it matches the declared purchase price or valuation, we will not require a physical valuation of the security.
Where an AVM fails, or when it passes, and there is a significant difference between the AVM amount and the declared purchase price or valuation, we will attempt to resolve the discrepancy. Where we cannot resolve the issue, a surveyor will be instructed to carry out a desktop or physical valuation.
We provide a basic valuation for your customer’s mortgage needs. For a more detailed property assessment, they can arrange a Digital Home Survey through our partner, Legal and General Surveying Services (LGSS). LGSS will deliver a comprehensive digital report. Follow this link to learn more and request a survey.
Note: Your customer’s direct relationship with LGSS means we do not endorse or promote this service. A 'no liability' disclaimer applies as your engagement is directly with LGSS.
Where an AVM fails, or when it passes, and there is a significant difference between the AVM amount and the declared purchase price or valuation, we will attempt to resolve the discrepancy. Where we cannot resolve the issue, a surveyor will be instructed to carry out a desktop or physical valuation.
We provide a basic valuation for your customer’s mortgage needs. For a more detailed property assessment, they can arrange a Digital Home Survey through our partner, Legal and General Surveying Services (LGSS). LGSS will deliver a comprehensive digital report. Follow this link to learn more and request a survey.
Note: Your customer’s direct relationship with LGSS means we do not endorse or promote this service. A 'no liability' disclaimer applies as your engagement is directly with LGSS.
Back to Back / Sub Sales
Back to Back and Sub Sales are not acceptable.
Construction – Roof
Roofs should be of standard construction.
Flat roofs are acceptable subject to valuers comments.
Thatched roofs and non standard roofs are not acceptable.
Flat roofs are acceptable subject to valuers comments.
Thatched roofs and non standard roofs are not acceptable.
Construction – Walls
Walls should be of standard brick/stone construction.
Timber construction is not acceptable.
Timber construction is not acceptable.
EPC
Perenna currently has no restrictions based upon EPC unless the valuer deems the EPC score to be having a detrimental impact on the value and saleability of the property.
Flats / Maisonettes
Flats/Maisonettes/Apartments must be self contained with private facilities and direct access to the highway via common parts.
Perenna can accept flats up to and including 5 storeys.
Flats located above the third floor must have lift access.
Local Authority or former Local Authority flats are not acceptable.
If a flat has been built or converted in the last 2 years, please also see our New Build lending policy. Max 80% LTV for New Build flats.
Irrespective of other matters, the property must be readily saleable and mortgageable in the opinion of the valuer.
Perenna can accept flats up to and including 5 storeys.
Flats located above the third floor must have lift access.
Local Authority or former Local Authority flats are not acceptable.
If a flat has been built or converted in the last 2 years, please also see our New Build lending policy. Max 80% LTV for New Build flats.
Irrespective of other matters, the property must be readily saleable and mortgageable in the opinion of the valuer.
Flying Freehold
Flying freehold is acceptable up to 20% of the total footprint of the property subject to the valuer’s comments on suitability of security and saleability.
There must be a legally enforceable mechanism in place for the repair and upkeep of the common areas or sufficient legal protection in the form of insurance.
There must be a legally enforceable mechanism in place for the repair and upkeep of the common areas or sufficient legal protection in the form of insurance.
Freehold Flats
Freehold flats and maisonettes are not acceptable with the exception of Tyneside Flat style arrangements subject to legal review that suitable maintenance provisions are in place.
High Risk Construction Types
Buildings and tower blocks constructed of or clad with Large Panel Systems (LPS blocks) are unacceptable.
Cladding and EWS is acceptable where an EWS1 form confirms the property is rated as A1, A2, or B1 only. Other ratings are not acceptable.
Cladding and EWS is acceptable where an EWS1 form confirms the property is rated as A1, A2, or B1 only. Other ratings are not acceptable.
Japanese Knotweed
Properties where Japanese Knotweed has been identified in such a proximity that could impact the building and where there is no managing control of the plant possible (adjacent properties etc) are not acceptable.
Listed Buildings
Listed buildings are acceptable only where the valuer confirms they are in good condition and where saleability is not considered to be an issue.
Location
The security must be in either England or Wales.
Maximum Property Value
There is no maximum property value, however the surveyor must agree that a property is marketable and there is an active market to sell very high value properties.
Minimum Property Value
Minimum property value is £50,000.
Nearby Commercial
Properties situated directly over or adjacent to the following types of retail or commercial premises are not acceptable:
• Cafes, bars, public houses, restaurants, hot food takeaways
• Industrial units
• Storage and distribution units
• Assembly and leisure facilities
• Cafes, bars, public houses, restaurants, hot food takeaways
• Industrial units
• Storage and distribution units
• Assembly and leisure facilities
New Build
Perenna defines a new build property as being less than 2 years old and having not yet been occupied.
New build houses are acceptable up to 90% LTV.
New build/newly converted flats are acceptable up to 80% LTV.
We will require the final property address prior to issuing any offer. We will not offer on a plot number or site address.
Properties less than 10 years old, recently converted, or occupied for the first time as residential dwelling require a suitable warranty and/or Architects Completion Certificate.
The following will generally be acceptable Warranty Providers:
• N.H.B.C. guarantee
• Premier Guarantee Scheme
• Building Life Plan
• LABC New Home Warranty
• Checkmate Castle 10 New Home Warranty
• Build Assure (New Homes Structural Defects Insurance)
• Build Zone Structural Warranty
• Zurich Municipal
• UK FINANCE Compliant Professional Consultants Certificate with proof of PI
• Advantage
• Aedis Warranties
• Global Home Warranties
• Protek
• ICW
• Ark Residential New Build Warranty
• The Q Policy
• One Guarantee
New build houses are acceptable up to 90% LTV (or 95% LTV with Deposit Unlock).
If your client is looking at a new build mortgage you may want to explore our Perenna Zero Bills, Own New and Deposit Unlock mortgage propositions.
New build houses are acceptable up to 90% LTV.
New build/newly converted flats are acceptable up to 80% LTV.
We will require the final property address prior to issuing any offer. We will not offer on a plot number or site address.
Properties less than 10 years old, recently converted, or occupied for the first time as residential dwelling require a suitable warranty and/or Architects Completion Certificate.
The following will generally be acceptable Warranty Providers:
• N.H.B.C. guarantee
• Premier Guarantee Scheme
• Building Life Plan
• LABC New Home Warranty
• Checkmate Castle 10 New Home Warranty
• Build Assure (New Homes Structural Defects Insurance)
• Build Zone Structural Warranty
• Zurich Municipal
• UK FINANCE Compliant Professional Consultants Certificate with proof of PI
• Advantage
• Aedis Warranties
• Global Home Warranties
• Protek
• ICW
• Ark Residential New Build Warranty
• The Q Policy
• One Guarantee
New build houses are acceptable up to 90% LTV (or 95% LTV with Deposit Unlock).
If your client is looking at a new build mortgage you may want to explore our Perenna Zero Bills, Own New and Deposit Unlock mortgage propositions.
Nonstandard construction / Modern Methods of Construction
Non-standard and Modern Methods of Construction (MMC) are not acceptable forms of construction unless Valuers consider the build type to be well tested or proven in an area and the construction scheme is BOPAS accredited.
Property Restrictions
A property that is subject to any planning, occupancy, or resale restriction is usually not acceptable.
Where there is a strong case that saleability is not detrimentally affected, and any restriction is commensurate with the property/location the application can be considered.
Examples of acceptable restrictions may include age restrictions in a retirement community, local worker restrictions in a tourist area etc.
In all circumstances these cases should be discussed with Intermediary Support prior to submission and full notes submitted with the case.
Where there is a strong case that saleability is not detrimentally affected, and any restriction is commensurate with the property/location the application can be considered.
Examples of acceptable restrictions may include age restrictions in a retirement community, local worker restrictions in a tourist area etc.
In all circumstances these cases should be discussed with Intermediary Support prior to submission and full notes submitted with the case.
Services and Habitability
Mains electricity must be supplied to the property.
Natural water supplies are acceptable subject to local demand and saleability.
Septic tanks, private sewage systems, reed beds etc are acceptable.
Properties where there are unadopted sewers with known functional or legal issues are not acceptable.
The property must have a central heating system, wall mounted electric heating, or a district heating system. Solid fuel only heating systems are not acceptable.
The property must be immediately habitable with a functioning kitchen and washing facilities as well as working services and must be confirmed by the valuer as habitable and readily saleable.
Specific small works (completion of current repairs, improvements, re-fitting a bathroom or kitchen) can be acceptable, however the property will be valued based upon it’s current condition and not the ‘after works’ condition.
Natural water supplies are acceptable subject to local demand and saleability.
Septic tanks, private sewage systems, reed beds etc are acceptable.
Properties where there are unadopted sewers with known functional or legal issues are not acceptable.
The property must have a central heating system, wall mounted electric heating, or a district heating system. Solid fuel only heating systems are not acceptable.
The property must be immediately habitable with a functioning kitchen and washing facilities as well as working services and must be confirmed by the valuer as habitable and readily saleable.
Specific small works (completion of current repairs, improvements, re-fitting a bathroom or kitchen) can be acceptable, however the property will be valued based upon it’s current condition and not the ‘after works’ condition.
Solar Panels
Solar panels are acceptable if they have been bought outright or subject to confirmation with the acting solicitor that if a lease exists, an adequate break clause of 6 months is in place within the terms of the lease, with no onerous/onward restrictions which could cause issues in the event of possession. Subject to satisfactory valuation report and valuer comment.
Structural Issues
Where structural movement is evident at the property and not stated as “historic or longstanding” or there is risk of further movement considered probable, an offer cannot be considered until a structural engineer’s report has been obtained, referred for comment and reviewed by the valuer.
Reports may be accepted from members of the following bodies:
• The Institution of Structural Engineers (www.IStructE.org.uk)
• Institution of Civil Engineers (www.ice.org.uk)
• The Royal Institution of Chartered Surveyors (RICS) – Building Surveyor
If the report is not addressed to the applicant, written confirmation must be obtained from the originator that its contents may be relied upon by the applicant(s).
Ultimately, if a home cannot be insured under normal terms, it is unlikely that it can be easily sold, and existing Insurers will be notified.
Under those circumstances, the mortgage application will be declined.
Reports may be accepted from members of the following bodies:
• The Institution of Structural Engineers (www.IStructE.org.uk)
• Institution of Civil Engineers (www.ice.org.uk)
• The Royal Institution of Chartered Surveyors (RICS) – Building Surveyor
If the report is not addressed to the applicant, written confirmation must be obtained from the originator that its contents may be relied upon by the applicant(s).
Ultimately, if a home cannot be insured under normal terms, it is unlikely that it can be easily sold, and existing Insurers will be notified.
Under those circumstances, the mortgage application will be declined.
Studio Flats
Flats must have a minimum internal area of 30 square meters.
Sub Letting
AirBnB or similar sub-letting schemes are not acceptable.
Tenure
We will accept freehold and leasehold properties.
Leasehold properties are subject to the following:
• Lease must be a minimum of 85 years remaining at the outset of the mortgage
• Ground rent is to be no more than 0.5% of the property value
• Ground rent escalation interval cannot be any less than 10 years
• Ground rent escalation must be no more than RPI
Lease extensions and freehold purchases are acceptable if they are simultaneous to completion. Any new lease must meet our leasehold requirements.
Commonhold properties are not acceptable.
Leasehold properties are subject to the following:
• Lease must be a minimum of 85 years remaining at the outset of the mortgage
• Ground rent is to be no more than 0.5% of the property value
• Ground rent escalation interval cannot be any less than 10 years
• Ground rent escalation must be no more than RPI
Lease extensions and freehold purchases are acceptable if they are simultaneous to completion. Any new lease must meet our leasehold requirements.
Commonhold properties are not acceptable.
Unacceptable Property Types
• Any Property designated defective under Part XVI Housing Act 1985 or Pre-Cast Reinforced Concrete (PRC) where the property and the properties either side have not been repaired under a scheme licensed by PRC Homes Ltd.
• Properties constructed with high alumina cement.
• Timber framed property with no brick skin/masonry cladding unless it’s a MMC supported by BOPAS. Character period properties are considered on individual merits where buildings insurance is available on conventional terms.
• Pre-1980 steel framed houses. Post 1980 steel framed houses are acceptable subject to a satisfactory structural engineer’s report being received or an acceptable new homes warranty provided (if constructed within the last 10 years).
• Any property containing Mundic concrete.
• Properties where commercial usage exceeds 20%. The commercial element should not extend to light engineering, livestock, rearing or caring for domestic animals. Such use should not include circumstances where clients are seen on the premises on a regular basis (e.g., dental surgery would not be acceptable).
• Live / work units.
• Any property deemed unsuitable security by the valuer which the Underwriter agrees is unsuitable.
• Any property where there is ongoing movement/monitoring is required.
• Ex-local authority (LA) flats/maisonettes
• Freehold flats/maisonettes.
• Mobile homes and houseboats.
• Any property whose saleability may be adversely affected by local planning or by an unsatisfactory mining search.
• Properties where Japanese Knotweed has been identified in such a proximity that could impact the building and where there is no managing control of the plant possible (adjacent properties etc).
• Basement flats.
• Modern Methods of Construction (MMC) are not acceptable forms of construction unless Valuers consider the build type to be well tested or proven in an area.
• Properties constructed with high alumina cement.
• Timber framed property with no brick skin/masonry cladding unless it’s a MMC supported by BOPAS. Character period properties are considered on individual merits where buildings insurance is available on conventional terms.
• Pre-1980 steel framed houses. Post 1980 steel framed houses are acceptable subject to a satisfactory structural engineer’s report being received or an acceptable new homes warranty provided (if constructed within the last 10 years).
• Any property containing Mundic concrete.
• Properties where commercial usage exceeds 20%. The commercial element should not extend to light engineering, livestock, rearing or caring for domestic animals. Such use should not include circumstances where clients are seen on the premises on a regular basis (e.g., dental surgery would not be acceptable).
• Live / work units.
• Any property deemed unsuitable security by the valuer which the Underwriter agrees is unsuitable.
• Any property where there is ongoing movement/monitoring is required.
• Ex-local authority (LA) flats/maisonettes
• Freehold flats/maisonettes.
• Mobile homes and houseboats.
• Any property whose saleability may be adversely affected by local planning or by an unsatisfactory mining search.
• Properties where Japanese Knotweed has been identified in such a proximity that could impact the building and where there is no managing control of the plant possible (adjacent properties etc).
• Basement flats.
• Modern Methods of Construction (MMC) are not acceptable forms of construction unless Valuers consider the build type to be well tested or proven in an area.
Existing Customers
Porting (moving home)
Perenna recognises that existing customers may wish to move home and transfer their mortgage to a different property. Customers can apply to port to a new property after they’ve had their mortgage with us for 12 months. Our standard lending policy applies to all porting applications.
If the customers wish to take additional borrowing when they move home, their existing balance will remain on their existing product rate however any additional borrowing will need to be taken out at an interest rate available at the time.
If the customers wish to take additional borrowing when they move home, their existing balance will remain on their existing product rate however any additional borrowing will need to be taken out at an interest rate available at the time.
Additional Borrowing
Existing customers who wish to release equity can apply for additional borrowing once they’ve had their original mortgage with us for at least 12 months.
Our standard lending policy applies to all additional borrowing applications.
Our standard lending policy applies to all additional borrowing applications.
Consent to Let
We understand that customers experience changes to their circumstances and that sometimes they may need to consider measures such as temporarily letting their home. We will consider any requests from customers who want to let out their property, the following policy will apply:
• The customer must provide evidence of monthly rental income. We will require a letter from a reputable letting agent who is either a member of the Association of Residential Letting Agents (ARLA), Member of the Property Ombudsman Scheme or Member of the Royal Institution of Chartered Surveyors (RICS).
• We will not allow CTL in first 12 months except for armed forces personnel.
• No additional borrowing, porting, or rate switching will be allowed while within CTL.
• The interest rate will be increased by 1% for the full duration of the CTL period.
• There is no maximum period for the CTL arrangement and the interest rate increase can only be removed once Perenna has been notified the property is no longer being let.
• The rental coverage ratio must be 125% at the customers product rate plus an extra 1%. This is calculated at the current repayment method.
• The customer must provide evidence of monthly rental income. We will require a letter from a reputable letting agent who is either a member of the Association of Residential Letting Agents (ARLA), Member of the Property Ombudsman Scheme or Member of the Royal Institution of Chartered Surveyors (RICS).
• We will not allow CTL in first 12 months except for armed forces personnel.
• No additional borrowing, porting, or rate switching will be allowed while within CTL.
• The interest rate will be increased by 1% for the full duration of the CTL period.
• There is no maximum period for the CTL arrangement and the interest rate increase can only be removed once Perenna has been notified the property is no longer being let.
• The rental coverage ratio must be 125% at the customers product rate plus an extra 1%. This is calculated at the current repayment method.
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Perenna Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 956138. Perenna Bank PLC is a company registered in England and Wales with company number 13084174. Our registered office is at 20 Eastbourne Terrace, London W2 6LG
VAT number: 439664553
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