Clients often approach us for short term finance to renovate and improve buy to let properties either to increase the rent they can charge or to sell for profit. Due to changes in buy to let taxation many landlords are improving existing properties to sell on. At the time of writing we are seeing a lot of buy to let activity in Liverpool and the case study below demonstrates how short term finance can be used very effectively to provide a means to an end.
The client owned a buy to let property in Formby, Liverpool and wished to pay off the existing mortgage which was coming up for repayment and take out some additional funding to make structural and cosmetic improvements to the house to make it more appealing to residential buyers.
The clock was ticking as the client’s existing buy to let mortgage lender required repayment. We were able to source a 12 month finance solution with a bridging loan lender who was comfortable with the exit strategy as the property was not immediately being marketed for sale.
We arranged for this to be a condition of the offer to allow for funds to be released to pay off the existing mortgage before the work was completed. The refurbishment finance allowed the client to create an open plan structure which made it very appealing to residential buyers and allowed the client to command a much higher sale value.
The application process for renovation finance is relatively straightforward as lenders are not concerned about applicant’s income and focus more on the exit strategy.
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