CHL Mortgages has released a light refurbishment range to its buy-to-let (BTL) offering.
Two-year fixed rates start from 4.40% for single dwelling properties and 4.50% for houses in multiple occupation (HMO) and multi-unit freehold block (MUFB) properties with up to six bedrooms or units.
The range is aimed at investors looking to carry out non-structural or modernisation works and products are open to individual and limited company landlords, available up to 75% loan to value (LTV) with a choice of product fee options.
Five-year fixed rates start from 6.11% for single dwelling properties and 6.21% for HMO and MUFB properties with up to six bedrooms or units.
New mode of borrowing for landlords
The range offers an alternative method of funding the purchase and refurbishment of a property.
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Instead of taking out a bridging loan before securing a long-term BTL product to exit onto once works are completed, borrowers can now opt for a single BTL term mortgage solution.
With single rate bridging loans on the rise this past year, it offers an alternative to more traditional borrowing methods.
The initial advance is based on the rental and market valuation figures prior to the works. A retention is held based on the difference between the pre- and post-work values.
Once the borrower confirms the works are completed, a reinspection confirms the actual post-works rental and market value figures. Upon receipt of the reinspection approval, the retention funds are released.
This eliminates the need for two sets of legal fees.
Improvements covered include installing a new bathroom or kitchen, replacing fixtures and fittings, windows and doors, and roof coverings, undertaking a full rewiring or converting a C3 dwelling to a C4 HMO property.
Mil Consiglio, head of sales at CHL Mortgages, said: “Our new light refurbishment range is all about giving landlords the freedom to unlock the potential in their properties.
“It offers them a simple way to add value through non-structural or modernisation upgrades before letting them out, and it’s ideal for investors looking to refresh tired stock or turn vacant or under-used properties into high-quality, income-producing homes.
“The beauty of light refurbishment is that it provides choice. Brokers now have an alternative option to present to their clients compared to the traditional approach of taking out a bridging loan and then securing a BTL product once works are completed.”