Bridging helps to boost landlord purchases – Shawbrook

Bridging helps to boost landlord purchases – Shawbrook

0:01 AM, 7th March 2025, About 2 months ago

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Landlords are increasingly utilising bridging finance to invest in buy to let properties and Shawbrook says that 63% of their residential bridging loan transactions were for purchases.

Its internal statistics also a pattern which appears to have continued into this year.

The lender says it is the adaptability of bridging loans which is enabling property investors to expand their holdings.

It adds that many landlords are now employing this option to renovate newly acquired properties before letting them.

Demand for rental accommodation

The lender’s director of real estate proposition, Daryl Norkett, said: “Despite the narrative that the buy to let market is in decline, our latest internal data reveals a more nuanced story.

“Property investors are being encouraged by strong underlying demand for rental accommodation and more positive forecasts, leading them to seriously consider expanding their portfolios.

“A BTL purchase mortgage is not the only way to expand a portfolio and many are using bridging loans to help them do just that.”

He added: “Unlike a typical buy to let mortgage, a bridging loan allows investors access to finance quickly and flexibly, making them ideal for those who want to move fast.

“With certain asset classes performing well, a bridging loan enables the landlord to both purchase and renovate the property before letting it out.”

HMOs are popular

Shawbrook says that conversions to Houses in Multiple Occupation (HMOs) proved popular with landlords last year.

And many investors refurbished their existing residential stock into higher-yielding assets.

Mr Norkett said: “Landlords can target lower purchase prices by finding properties in tired condition and create an initial profit margin by adding value through refurbishment or conversion.

“This means they can potentially take advantage of the trends we’ve been seeing within the BTL market and enjoy the higher returns that properties like HMOs can offer.”

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