Tim Davis, Senior Product Manager
As a Products Team, we’re always looking to identify emerging trends and design products which enable customers to take advantage of new opportunities opening up in the market.
After recognising that more customers were looking to maximise their rental yields by refurbishing a property before letting it out, we launched our Refurbishment Buy to Let proposition last autumn.
In case you’ve missed it, in a nutshell, Refurbishment Buy to Let brings together the flexibility of Bridging Finance with the surety of an exit onto a Buy to Let Mortgage once any improvement work has been completed, providing the property meets the expected valuation following refurbishment.
It’s easy to talk about the theory behind Refurbishment Buy to Let, so let me give you an example of two customers whose project has recently completed.
We were contacted by a broker representing two first time landlords who wanted to purchase a three bedroom end of terrace property at auction which required light refurbishment work to bring it up to a habitable standard before letting it out.
The customers were builders who said they’d be carrying out the work themselves, including fitting a new bathroom and kitchen, redecorating throughout and installing new internal and external doors.
After establishing the customers had sufficient surplus income and neither of them had a large amount of unsecured debt, we were able to offer a gross Bridging Loan of £90,749 at 75% LTV of the £121,000 purchase price at auction.
We completed on the Bridging Finance loan in just under three weeks and the customers finished the refurbishment work within two months. The re-inspection of the property returned a figure predicted by the pre-works estimated valuation and the customers exited onto a Buy to Let Mortgage.
Click here to view a case study of the application.