TL;DR
Barclays now allows some renters with a strong rental track record to factor their existing rent payments into the mortgage affordability calculation. The change can lift maximum borrowing by several thousand pounds for eligible applicants.
Barclays has confirmed an affordability change that allows some renters to factor their existing rent payments into a mortgage application. The change applies to applicants with a verifiable rental track record and can lift the maximum borrowing figure by several thousand pounds compared with the standard calculation.
What has changed in the affordability test
Mortgage affordability rules require lenders to test whether the borrower can sustain repayments at a stressed interest rate. Most banks calculate affordability on declared income and outgoings, with rental track record treated as a routine outgoing rather than as positive evidence.
Barclays now considers a stable rental payment history as supporting evidence in the affordability assessment. Applicants who have paid rent of a similar size to the prospective mortgage payment for a continuous period can have that rental performance reflected in the maximum loan figure.
Who can use the change
Applicants need at least 12 months of rental track record with no arrears. Letting agents or landlords confirm the record through a rental reference, or the bank can use the customer's own bank statements to evidence the payments.
The change applies most clearly to first-time buyers, although second-time buyers transitioning between rentals and ownership can also benefit. Applicants who own other property or whose rental payments come from a third party are subject to additional checks.
How the maximum borrowing figure can move
The exact uplift depends on the borrower's income and the local rental market. A renter paying £1,200 a month for 24 months who applies for a mortgage with a similar repayment can typically borrow more under the new rules than under the standard test.
Industry estimates put the typical uplift between £20,000 and £40,000 for an applicant on a mid-market salary. Each case still has to pass the stressed affordability calculation under the Prudential Regulation Authority rules.
What documents are required
Barclays requests bank statements covering the rental payments for the qualifying period, a letter from the letting agent or landlord, and proof of address at the rented property. Applicants who have moved between properties during the period should provide records from each address.
The documents are uploaded through the Barclays mortgage application portal or supplied to the mortgage adviser. Other standard mortgage documents such as payslips, P60s and ID also apply.
How it sits alongside the wider market
Other lenders, including Skipton Building Society's Track Record mortgage, already offer rental-based affordability or 100 per cent mortgages tied to rental history. Barclays' move brings the largest UK banks closer to that benchmark.
Brokers will compare the affordability uplift, stress-test thresholds and product rates across lenders. The Mortgage Calculator on the Money and Pensions Service site at moneyhelper.org.uk allows borrowers to model affordability against typical income and outgoings.
Key facts
- Minimum 12 months of rental track record required.
- No arrears allowed during the qualifying period.
- Typical uplift in maximum borrowing of £20,000 to £40,000.
- Rental performance evidenced through statements or letting agent letters.
- All borrowing still subject to the stressed affordability test.
FAQ
How much extra can I borrow under the new rule?
Typical uplift is between £20,000 and £40,000 depending on income, rental history and local market rates. Each application still has to pass the stressed affordability calculation set by the Prudential Regulation Authority.
Do I need to be a first-time buyer?
No, but the change is most relevant to first-time buyers and those transitioning between renting and owning. Applicants who already own property are subject to additional affordability checks.
What evidence does Barclays require?
12 months of rental payment evidence, a letter from the letting agent or landlord, and proof of address at the rented property. Standard mortgage documents such as payslips, P60s and ID also apply.
Will other lenders match this?
Skipton Building Society already offers rental-based affordability through the Track Record mortgage. Other lenders may follow, but each sets its own criteria. A regulated broker can compare the options.
