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  • Mortgages & Finance

    Launch of "Finance Innovation Insights" Week



    Welcome to a brand new week of themed content on Property Tribes which is powered by Brightstar Financial.

    We're calling it "Finance Innovation Insights" Week, and it will feature exclusive video content that outlines some of the different aspects of finance, in particular, those related to a new product from Precise that Brightstar think more landlords should be aware of.

    This product offers an angle for forcing the appreciation of a property through improvements, and is a streamlined solution featuring a bridging loan with term finance at the end, all undertaken in one application.

    This is a great option for landlords looking to recycle cash through improvements when buying to hold.

    To launch the week, I spoke to Jeff List, Head of Buy to Let Mortgages at Brightstar Financial about this innovative product and how to get the most out of it:


    The video mentioned forcing the appreciation through improving the EPC rating and this is one of the best applications of the product.

    Legislation that came into effect last year states that landlords can not legally let out properties with the two lowest energy efficiency ratings, F and G.

    Therefore, you cannot secure a buy to let mortgage against such properties, as they are un-lettable.  That puts transacting on these properties firmly into the cash buying arena.

    The Precise product provides bridging finance to purchase an un-mortgageable property due to too low EPC rating.

    Landlords can then improve the property by refurbishment and energy efficiency improvements, thereby increasing the EPC rating to E or above, which now makes the property mortgageable, and therefore the value will increase.

    The improvements that could save you the most energy depend on your property, but typical examples include:

    • insulation, eg solid wall, cavity wall or loft insulation
    • heating
    • draught-proofing
    • double glazing
    • renewable energy generation, eg solar panels or heat pumps.

    Landlords can also do simple inexpensive things, like changing lightbulbs and down-lighters for LEDs.

    The landlord can then move to term finance, using LTV on the new value, and pulling back some of their cash after the bridging loan has been redeemed.

    This product is ideal for:

    • Properties needing works to meet minimum EPC rating, such as boiler replacement
    • Properties purchased at auction that require light refurbishment to be acceptable for mortgage purposes (including new kitchens and bathrooms)
    • Landlords choosing to refurbish in order to maximise the rental yield of their property (including HMOs but not change of use to HMO)
    • Properties bought under valuation

    Click on this banner to find out more about this innovative product:



    While on the topic of EPCs, a reminder that Property Tribes has its own EPC on-line booking service where you can book an EPC for a fixed fee of £59.00 inc. VAT nationwide:



    The PT service can also be used for commercial EPCs.

    "Finance Innovation Insights" Week features the following content run-down:

    Episode #1 -  Launch and overview

    Episode #2 -  Convergent relationship between finance and tax and Landlords' tax positions (sole trader or ltd co?)

    Episode #3 -  Getting the most out of bridging finance

    Episode #4 -  The property developer perspective

    Episode #5 -   Second charge loans and instances where they can be used.

    SEE ALSO  -          Growing a property portfolio - resources

    UP NEXT -              Grow portfolio from 1 owned out right, tips?

    DON'T MISS -         10 tips for spotting property deals others might have missed.

    NOW WATCH:


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