15:04 PM, 12th September 2012, About 12 years ago
Northern Rock BuytoLet who are part of Virgin Money have confirmed they will consider “Day One” remortgages otherwise known as “Back-to-Back” and Regulated BuytoLets for the use of close family members.
This is a very niche area for Lenders with only Mortgage Trust as the other company able to consider remortgages inside six months of the purchase date when significant works have been carried out and BM Solutions who will consider Regulated BuytoLet applications.
Back-to-Back definition for Northern Rock
A Back-to Back remortgage occurs when a customer purchases a property and then attempts to take out a mortgage based on an enhanced market value within six months of the original purchase.
Northern Rock policy is to lend against the lower of either the original purchase price or valuation within this six month period. This is still more than most lenders who will not consider a remortgage of any amount during this period and will assist Bridging, Auction and Cash purchasers in releasing the equity in their properties sooner enabling them to carry on with their property investment business.
Sub-sale definition for Northern Rock
A sub-sale occurs when a customer is purchasing a new build property from a third party (not the builder) and is paying a premium price, but the third party is purchasing from the builder at a lower price or in a Stamp Duty Landlord Tax (SDLT) mitigation scheme.
Northern Rock policy for sub-sales is to lend against the lower figure until a minimum of six months from completion, but again many lenders will not consider lender at all against a Sub-sale purchase.
Regulated BuytoLet for family members
If a BuytoLet property is to be used by a close family member eg. Brothers, Sisters, Parents, Grandparents, Children and Grandchildren it is seen by the FSA as a regulated transaction and has to be treated as such.
This extra complication in terms of paperwork and record keeping means that now only BM Solutions along with Northern Rock will consider a BuytoLet purchase or remortgage where the intention is to have a close family member let it out. Again another useful niche to have covered as many parents find this the only way to help their children eventually get on the property ladder.
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