Justin Trowse, Director – Bridging Finance
Record numbers of transactions at the start of this year didn’t alleviate Britain’s housing crisis – it shone more light on it.
The demand for good-quality housing has never been so high, and with the change in working cultures brought on by the pandemic, that demand has spread far and wide outside of traditional urban centres and into new and growing communities.
Empowering developers, landlords and property investors to provide this housing – through either regeneration or enhancement of existing properties – is why we decided to launch our new, higher LTV refurbishment product, to help these professionals meet the evolving market demands.
Backing our clients with up to 85% LTV
Developing trusting, long-standing relationships with our clients has been fundamental to our growth as a bridging, development and Buy-to-Let lender.
Backing property professionals when they need it by giving them the tools to do the job is part of how we demonstrate that trust, which is why we’re offering up to 85% LTV on our new refurbishment bridging range.
From day one borrowers will be eligible to draw down upto 75% of the current open market value, then on day two, a forward funded works loan equal up to a maximum of 85% of the current day value and a maximum of 75% of the end value.
Offering this structure allows the borrowers to get on with the project without any monitoring or cash flow delays. We’re working together to meet the need for high-quality housing.
Maximising yields, realising profit
In communicating with our experienced customers, we identified a gap in the market for refurbishment facilities that are not monitored and gives the clients the funding up front without putting them through onerous lending processes.
This is particularly valuable for landlords, who are either purchasing or looking to regenerate existing parts of their portfolio to maximise their potential rental yields and improve the quality of housing for their tenants.
We’re seeing this especially in the fringes of the cities where investors can improve long-term rental yields by adding bedrooms, replacing kitchens, bathrooms, adding useable outside space, or simply bringing EPC standards up to higher levels.
Refurbishment finance is also of high-value to house flippers. Looking to realise profit quickly, they often need flexible, high-LTV finance to deliver on their ambitions for regenerating homes before selling to prospective homeowners.
This is an important part of improving the overall quality of housing in the UK and meet the demands of buyers, and like with Buy-to-Let we’re seeing opportunities all over the country, but especially in areas with historic under-investment, where profit can be realised quickly with a low purchase price and refurbishment.
The trust in our clients doesn’t just extend to backing them with higher LTVs, we’re delivering the loans differently.
We’ll pay the money upfront and won’t put a monitoring surveyor in place for the duration of the loan, trusting developers and landlords to go and do what they do best without having to worry about a lender looking over their shoulder, or delaying projects because they haven’t released funds yet.
This is part of our ethos of backing property professionals for every type of deal, and with refurbishment finance at their disposal they can use our products from acquisition through to refinance.
Facilitating long-term gains
Making it easier for professionals and landlords using our refurbishment product to access our award-winning Buy-to-Let range was high on the priority list when designing this product.
For landlords who use the refurb product to enhance their existing properties, a quick refinance so they can begin realising increasing yields and move on with expanding their portfolio is incredibly valuable.
So we’ve added free legals and valuations for refurbishment finance customers who want to exit onto our Buy-to-Let loans, where they will have a choice of market-leading rates and a best-in class operations team.
Meeting the housing demands in this country has been one of the most high-profile topics of debate for the last decade, and looks set to continue into the next one. Enabling professionals and landlords to provide quality housing is the job of all lenders with the capital to back them. Which is what we plan to do.