YBS Commercial – Special criteria change edition

As we see larger volumes of lending applications and the growth of our broker panel, we continue to review our lending criteria to best meet the changing needs of you and your clients. This is an ongoing process as we respond to feedback from our key stakeholders, members of our broker panel, our borrowers and our team who work with the lending standards daily.


In this issue of the newsletter we’re delighted to announce some of the headline changes that are being introduced with immediate effect. These updates are in addition to the changes we’ve already implemented this year. So far we’ve introduced personal name lending for HMO and Holiday Let propositions and the amendment of the eligibility for our personal name Buy to Let product. Details of all the changes will be in our usual monthly product update, but if you have any specific questions please contact your Relationship Director directly.


Personal Guarantee requirements for Standard Buy to Let Products


The minimum required level of personal guarantees for loans below £2m is now or a maximum of 100% for loans less than £175k or 10% of the loan amount,

whichever is the greater. This is a minimum requirement and there may be

instances where we feel it is appropriate to seek a higher personal guarantee. There are no changes to loans £2m+ which remain at 10% of loan amount.


Return to Office Lending


Changes in response to the Covid lockdowns and the impact of new working practices from office to home, meant we reduced our appetite for office lending. With the end of lockdowns and the consequent changes in the economy we’ve broadened our criteria to support office lending again. Mortgages with a maximum 75% LTV and maximum £5m loan per property are now available against office properties.


Removal of maximum loan per property limits for Buy to Let products


The previous limit of £1.5m for properties in London and the South East and £1m elsewhere has been withdrawn. We do not wish to originate lending against a high volume of ultra high value properties. So, the valuation must support that property remains liquid with acceptable sale period, maximum 12 months; there is good rental demand for the property at market rent; the property is an area commensurate with properties of that value and LTVs must be supported by the property and immediate outside area i.e. not paddocks/agricultural estate.


Lending against blocks of flats


We’ve amended the previous limit of maximum 20 flats in a single block as acceptable security to a maximum YBS exposure to any single block of flats to £10m. Restrictions around maximum number of units in a block, maximum storeys and maximum new build units have been removed. Our appetite for lending on flats is focused on properties with good quality build/specification that will compete well against other assets in the market, comprising either new build or conversion from residential use. Ideal property types are flats within low to medium sized developments and lending to whole blocks of flats, we’ll consider properties located within major cities/towns with high levels of employment/affluence/strong professional sectors of employment. In terms of rental we require good tenant demand with valuation confirming re-let periods of 3 months or less and demonstrated by borrower track record and serviceability above minimum levels on blocks of flats to cover likelihood of running void periods and higher service charges.