Fair Rents (Scotland) Bill or Artificial state manipulation of free market rent?10:34 AM, 6th November 2020
About 3 weeks ago 36
Thank you very much to Malcolm and his team at Brooklands Commercial Finance along with Shawbrook Bank for running the seminar and using the Shawbrook offices in the heart of the City.
We started with a Mortgage and Lender Market Update in particular discussing rental stress testing and the amount you can borrow by using the advantages of criteria on 5 year fixed rates and in the name of a limited company.
PRA rules allow Buy to Let stress testing at the actual pay rate not an additional notional rate on products fixed for 5 years or longer
E.G: If you were to borrow on a BTL product in your Personal Name
There are additional stress testing advantages using a Limited Company
This is why (in addition to avoiding Section 24 mortgage interest relief restrictions) borrowing for new purchases in the name of a Limited Company is now so popular with 70-80% of new loans all in the name of limited companies.
Bridging Finance is increasingly popular and widely available.
The percentage market uses for Bridging Finance is very interesting and broken down below
Bridging Finance considerations that should be taken into account:
Another innovation in the market uses a new term of ‘Bridge to Let’. This is where a Bridging Loan can be taken out to purchase a property and then as previously agreed by the lender converted to a long term loan (mortgage) up to a maximum of 75% LTV. This significantly reduces cost, complexity and the risks of using two lenders and or applying for one loan after the other.
Shawbrook Short Term Loans + Refurb Cost
Can assist investors looking to add value to property and attract higher yields and conversions from residential or commercial to HMO or multi-let
Landlords who will need to amend the property layout pending HMO license and regulation changes. Any property with 5 or more people (no longer 3 storeys or more) 6.51m2 for a bedroom occupied by a person over 10 years old 10.22m2 for a bedroom occupied by two people over 10 years old Minimum EPC requirements for all residential and commercial property E or better
Key criteria for the new “Lending for Refurb Costs” option include:
The pricing structure for this product option is simply a 0.10% loading to the standard 75% LTV margin making the available rates as follows:
Single lets/ Multi-units/ HMOs: 0.80% pm Semi-commercial: 0.91% pm
The above gives a flavour of what is available currently for property investors in the Bridging and Development finance market.
If you require assistance with any type of property finance including straightforward BTL please contact Malcolm Jones and his team at Brooklands Commercial Finance using the contact form below and they will be happy to help.
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