Lending policy

View our full intermediary lending policy online

A-Z lending policy

The purpose of this search facility is to provide guidance on Virgin Money's Lending Criteria. You can either browse alphabetically or enter a keyword you would like to search from the panel on the left hand side.

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Second Home Purchase

Virgin Money will consider lending on a second home up to 75% LTV. The customer must be able to afford all credit commitments including any mortgages.

Self Build

Virgin Money does not accept self build properties whilst they are undergoing construction and the property is not in a habitable condition.

Virgin Money will accept a self build property once construction is complete and the property is in a habitable condition. This is subject to the property having the benefit of a New Build Warranty or Professional Consultants Certificate in standard CML format, acceptable to Virgin Money, satisfactory valuation report and valuer comment.

The Virgin Money definition of a property being habitable is:

  • Wind and weather tight
  • Plastered out

All services functioning and connected with at least one:

  • Kitchen with functioning hot and cold water supply to a sink and adequate food preparation and storage facilities
  • Functioning bathroom with bath or shower and WC
Self Employed

The customer is considered as Self Employed if they have a shareholding of 20% or more in a business, or a customer with a small shareholding in a large Limited Liability Partnership (LLP).

We will require access to two years of business accounts, during which period we will need to see that the business has been profitable. Also, the business must have been solvent i.e. the capital amount must be positive / assets must outweigh the liabilities, in each of the last two years.

The types of self employment that Virgin Money will consider are:

  • Sole Trader / Partnership
  • Limited Company

Where the loan is greater than £1million the company must have been trading for three years.

Please note - If the customer is classed as self employed by way of having a 20% or more shareholding in a Limited Company, HMRC SA302's are not acceptable as income verification.

For Limited Company Directors the last two years’ full accounts will be required. We will also request an accountant’s covering letter on your behalf. For Sole Traders and Partnerships, last two years’ HMRC SA302's accompanied by the corresponding Tax Year Overviews and three months’ bank statements will be required to evidence turnover.

Shared Ownership

Shared Ownership allows a buyer to purchase a share of a home (typically between 25% and 75%) whilst a Registered Provider (Housing Association) retains ownership of the remaining share. Rent is paid on the unsold share, and buyers obtain a mortgage to fund the purchase of the share they buy. Buyers can purchase further shares in the future, through a process known as staircasing, until they own the property in full.

Standard lending policy applies in all instances in addition to the following requirements:

  • Lending is Available in England and Wales.
  • We will lend on a maximum of 15% of the total number of shared ownership units on individual sites unless previously agreed by Credit Risk.

Repayment of the loan

All loans must be arranged on a capital and interest basis.

Income and affordability

  • A maximum household income of £80,000 applies in England (£90,000 in London).
  • Maximum income multiple of x4.49 (based on allowable income e.g. 60% of bonuses).
  • The monthly rental payment for the remaining share must be included in the affordability calculation as a financial commitment.

The lease

  • The landlord must be a registered provider of social housing.
  • 2015 (or later) Homes England model lease or Welsh Government model Lease must be in place for the property and this must contain the Mortgage Protection Clause.
  • Restrictions on ownership are acceptable provided they only apply to the initial sale of the property and are subsequently dis-applied to any future sale.

The following pre-emption rights are acceptable:

  • The owner of the property must have the right to assign the lease free of any nomination right or sale restriction if either the landlord fails to nominate a buyer or exchange of contracts does not take place within six months of the intention to sell being provided by the owner.
  • The sale price under the pre-emption right must be at the open market value.
  • The proceeds of the sale must be payable to the vendor on completion of the sale.

The following nomination rights are acceptable:

  • The owner of the property must have the right to assign the lease free of any nomination right or sale restriction if either the landlord fails to nominate a buyer or exchange of contracts does not take place within six months of the intention to sell being provided by the owner.

The loan

  • Maximum loan to value is 95% of the share of the property being purchased by the customer including new build.
  • Customer must purchase a minimum of 25% of the property and be able to purchase additional shares in the property (staircasing) to 100%.
  • There must be no compulsory requirement in the lease for the customer to purchase additional shares in the property at a future date.
  • A mortgage Valuation is required for all applications.
  • Guarantors are not accepted on Shared Ownership mortgages.
  • We must have a first charge over the customer’s leasehold interest in the property and consent to any second charge.
  • We do not accept remortgage applications unless a customer is purchasing an additional share to take their ownership of the property to 100%.

The customer must obtain the permission of the Registered Provider for further advances which are only available in the following circumstances:

  • The purchase of additional shares in the property.
  • To buy out another leaseholder (Change of Parties).
  • Comply with a covenant in the lease.

Consent is also required for:

  • A straight balance swap Product Transfer
  • A change of term of the mortgage
  • A payment Holiday
  • Consent to Let

Unacceptable properties

The standard list of unacceptable properties applies to Shared Ownership and is shown in the Properties section. In addition to this, the following applies:

  • Office to residential conversions.
  • Ex local authority flat conversions.
Solar Panels

Virgin Money will lend on properties where solar panels have been installed, subject to no materially detrimental impact on the value of the property, satisfactory valuation report and valuer comment.

Where the customer wants to purchase and install solar panels on a property in mortgage to Virgin Money, this will be acceptable provided this does not have a material detrimental impact on the value of the property.

Where Virgin Money receives a request from solar panel providers to install solar panels on a property in mortgage to Virgin Money, then consent will only be provided where the terms of the lease meet the minimum requirements set out by the Council of Mortgage Lenders (CML).

The terms of lease must include a valid break clause, which Virgin Money can exercise in the event of possession. We will not lend on properties in Scotland or Northern Ireland where an existing lease of roof space is in place following the installation of Solar Panels.

Sole Trader/Partnerships

The business must have been in operation for two years and have been profitable during that period. Also, the business must have been solvent i.e. the capital amount must be positive / assets must outweigh the liabilities, in each of the last two years.

We will require last two years’ HMRC SA302's accompanied by the corresponding Tax Year Overviews and three months’ bank statements to evidence turnover.

If net profits are increasing - Average share of net profits over the last two years will be used.

If net profits have decreased - The most recent year will be used.

Standard Variable Rate

At the end of the promotional rate all residential loans will revert to Virgin Money’s Standard Variable Rate (SVR) which is 4.99% (effective from 1 October 2018 for existing customers).

Student Lettings

Accepted in the following circumstances:

  • Property is let on a single AST with a maximum of four tenants
  • The property has not been adapted from a single family dwelling in any way
  • Property has private and investor demand as a single family dwelling

The following circumstances are not acceptable:

  • The property is in a 'student suburb' and has limited Owner-occupier demand
  • The property is Private Halls of Residence
Sub-sales and Back to Back Transactions

A Back to Back transaction takes place when a customer purchases/exchanges on a property then attempts to take out a mortgage based on an enhanced market value within six months of the original purchase/exchange. Virgin Money Policy in these cases is to lend against the lower of either the original purchase price or valuation.

A sub-sale takes place when a customer is purchasing a new build property from a third party (not the builder) and is paying a premium price but the third party is purchasing from the builder at a lower price or in a Stamp Duty Land Tax (SDLT) / Land and Buildings Transaction Tax (LBTT) mitigation scheme. Our policy for sub-sales is to lend on the lower of the purchase price or property valuation in the original transaction until a minimum of six months from completion and as such, the third party must be noted at the Land Registry as the registered owner for a sub-sale to proceed.

A Back to Back purchase occurs where a customer is purchasing from a third party who has purchased the property within the last 6 months at a discounted/lower price. We will only lend on the lower of the purchase price or property valuation in the original transaction unless significant improvement has been carried out to the property.

Term
MinimumMaximum (*)
Residential7 Years35 Years
BTL7 Years35 Years
(*) Subject to age of customer at application
Please note: The minimum mortgage term is 7 years; therefore the maximum age at the time of application is 68 years.
Two Mortgages

Virgin Money will lend up to a maximum of 90% LTV where a customer has more than one residential mortgage.

Virgin Money will consider mortgages for second properties in the following circumstances:

  • If the property to be mortgaged is the customer's main residence, the maximum LTV is 90%. Where the property to be mortgaged is not to be the main residence the maximum LTV is 75%
  • There is no LTV restriction where the property is the customer(s) main residence and they have any BTL mortgages in the background.
  • Customers must provide a copy of their mortgage statement if no active mortgage is showing on the credit file
  • Customers must be able to afford both loans. Please make sure the current mortgage details are added to the affordability calculator.
Unacceptable Loan Types

Virgin Money does not accept applications on the following:

  • Shared Equity
  • Affordable Housing (except Shared Ownership)
  • Keyworker (except Shared Ownership)
  • Homebuy
Unacceptable Properties

The following property types are considered unacceptable for mortgage purposes. This is not an exhaustive list:

  • Houses in multiple occupation
  • Properties where the unexpired lease term is less than 30 years at the end of the mortgage term
  • Mobile Homes/Caravans/Park Homes/Houseboats
  • Working Farms, Smallholdings and Houses subject to an Agricultural Occupancy Restriction
  • Affordable Housing properties (except Shared Ownership)
  • Uninsurable properties
  • Properties built using high alumina cement or mundic
  • Flats above shops/commercial premises (exceptions apply)
  • Freehold Flats (exceptions apply)
  • Studio Flats
  • Landlocked properties
  • Large Panel System (LPS)
  • Live/Work Units
  • Properties adapted or altered for commercial use
  • Prefabricated Reinforced Concrete (PRC) Homes which remain unrepaired
  • Mundic properties where the property is not graded 'A' or 'A/B' following a Petrographic Test
  • Properties with Overage Clauses (except Custom Build)
  • Properties with Pre-emption Clauses (except Shared Ownership)
  • Properties with more than five acres as part of the title
  • Properties where power lines or electricity supply apparatus are located directly over and/or on the site which are not for domestic supply to the subject property
  • Properties with more than one annexe

Properties of non conventional construction may be acceptable subject to satisfactory valuation report and valuer comment. Full details of these property types can be found in the Lending policy including:

  • Prefabricated Reinforced Concrete (PRC)
  • Insitu Poured Concrete
  • Steel Framed
  • Timber Framed
  • Craft Techniques and period timber framed dwellings
  • Modern Methods of Construction (MMC)

The following list (which is not an exhaustive list) refers to the more common property matters which may be raised either within the content of the Mortgage Valuation Report or subsequently by the acting solicitor and which may require further underwriting as part of the processing of a mortgage case.


  • Adverse comments regarding the property’s suitability for mortgage purposes
  • Proximity to high voltage electrical supply apparatus (including overhead/nearby power cables, sub stations, transformer houses and communications masts)
  • Adverse findings within a mining search (e.g. presence of a mineshaft in proximity to the property)
  • Adverse findings within an envirosearch where obtained (e.g. reference to contaminated land that has not been subject to remediation)
  • Section 106 Agreements affecting a property
  • Reference to hazardous materials including asbestos, methane gas and radon gas
  • Deficiencies in the title to the property
  • Where any of these issues may be suspected on a case, please contact your BDM to discuss before submitting your application
Underpayments

If your customer has made previous overpayments they have the option to make lower monthly payments or stop their monthly payment.

Underpayments are not permitted on our Everyday (including BTL) and Freedom to Fix products.