Let's Talk Refurb BTL's!

Hi! Steve here!

Speaking with another Property Developer this week, it struck me that if he is concerned about EPC (Energy Performance Certificate) ratings and how we are going to navigate our way around what is meant to be coming (a minimum rating of ‘C’ for rental properties by 2025)... I thought "I know. I will write this week’s news on the products out there that can help us purchase property that might be too tired for a mortgage to be approved on, then when refurbished, move onto a standard mortgage!"

So here goes...

Around 40% of the mortgage business we do is for landlords and falls under the BTL or Buy To Let category. The other 60% is of course main residence mortgages.

Our Specialist Finance and Protection departments are in addition to this, so for now I want to focus on those clients who want to purchase property with a BTL mortgage but where we might struggle to get a mortgage on.?

What type of properties are difficult to get a mortgage on and why would a person want to buy a property that’s like this??

The main ones we deal with are:

• Failed EPC ratings
• Refurbishment work being carried out
• Auction properties or where time is short

There are Specialist products out there designed for you to acquire the property in this situation, then when able, move onto a standard BTL mortgage.?

We arrange plenty of Bridging Finance loans that later get switched onto a mortgage. With most of these, the property is purchased with one lender then switched to another once owned after a period of time.?

However, some clients prefer it when it’s the same lender for both the acquisition and the holding of.?

This is where the Refurbishment BTL comes in, which combines short-term finance with the security of a long-term exit and has helped hundreds of landlords maximise their rental yields and optimise the capital value on their properties. With one of the main lenders we deal with, there are three exit products, depending on the type of refurbishment work being carried out.?

So whether you’re fitting a new kitchen, looking to improve the energy efficiency of a property by installing double glazing or refurbishing a property that already has a high EPC rating, there are solutions to help.?

With more and more properties coming to the market in need of these improvements, it gives landlords the ability to increase the value and increase the yield (the annual rent as a percentage of the value).?

So, how do these products work and what are the benefits??

First of all, only one application is required, so paperwork and documents etc. are minimised...?Something we all love!

Only one valuer is required for the Bridging application and the Mortgage application, and only one conveyancer is needed with discounted legal fees.?

Clients can choose between servicing the monthly payments on the Bridge or having the lender deduct the interest at the start.?

The other advantage is the certainty of knowing the rate on offer at the start is the rate you’ll get at valuation.?

Because the same lender and valuer are dealing with both the Bridge and the Mortgage, there won’t be any shortfalls to worry about further down the line.?

So if you are considering adding to your portfolio or even purchasing your first BTL and are looking at properties where you can get a greater uplift, then get in touch with the team here. This is something we deal with on a regular basis.

Hope this one was useful?for you. It's the final week of April so let's smash it!

Steve

Express Mortgages is a trade name of Express Mortgage Services Ltd. Express Mortgage Services Ltd is authorised and regulated by the Financial Conduct Authority. [Reg No: 474427] Company registered in England & Wales no. 05167662

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