We receive hundreds of readers emails and telephone calls every month, the vast majority require contacts to arrange funding, hence this article which explores six very different strategies of financing property refurbishment projects. Continue reading Financing Property Refurbishment Projects
I spent most of yesterday with a lovely couple from Luton who emailed me asking for some guidance. After exchanging several emails we decided to meet and they came over to Norfolk. They have six buy to let properties at the moment, a decent liquidity fund and plenty of equity in properties. They wanted advice on how to get into property refurbishment.
The day started with a trip to my accountants in Norwich where we discussed the difference between property investment and property trading. It is important to have a very good idea of whether you intend to sell for a profit or to hold as an investment before you do any deal as investment and trade are taxed and financed very differently. Continue reading Property Refurbishment – A guide for newbies
Many high street banks are still refusing to offer new or extended terms to development finance facilities and those that are still in the market are offering increasingly stricter terms with the introduction of exit fees, increased rates and an insistence that the loan is serviced on at least a quarterly basis. In extreme cases, some banks are demanding early loan redemption. This often leaves the borrower with a major headache in a market where commercial lending is restricted and competitive alternatives are not immediately apparent.
As a direct consequence, the void is being filled with dedicated development finance lenders and new entrants to the market. This is good news for borrowers as the competition starts to drive down rates and fees. Continue reading Development Finance void being filled by new lenders
It is not an exaggeration to say that every day we are asked the question “can you arrange a buy to let mortgage for me on an auction property I am interested in purchasing”. My next question is when and the answer normally ranges from next day to next week.
If you are not a cash purchaser of residential auction property you need to be prepared to put down a deposit of at least 35-50% and budget for 10% of the purchase cost over 6 months in Bridging Finance costs. However, the most cost effective solution is to try and put yourself into the position of being a cash buyer Continue reading Auction property and buy to let mortgages don’t mix
Whilst a bungalow isn’t likely to provide you with the highest possible rental yield, bungalows should not be overlooked as property investment opportunities, especially by investors with with good refurbishment skills or a good team of tradesmen. Continue reading There’s good money in bungalow refurbishment
Bank tariffs are increasing amidst fears of the Euro zone instability and the resulting increase in funding costs. There is no doubt that rates will continue to increase, which is why fixed rate deals are particularly attractive.
Protecting your business against future interest rate shocks and having peace of mind of a fixed payment term is proving to be a popular choice. Lenders also see this as an attractive option because it lessens their exposure to the risk of borrower default as a consequence of rate increases over the term of the loan. Equally popular is a mix of variable rate and fixed.
Continue reading How to combat Commercial and development loan rate increases
We are witnessing a significant rise in the incidence of some banks refusal to offer new or extended terms to development loan facilities. In extreme cases, some banks are demanding early loan redemption. This often leaves the borrower with a major headache in a market where commercial lending is restricted and competitive alternatives are not immediately apparent.
There is no doubt that some banks are ‘shoring up’ their liquidity positions by not lending as broadly as they have done in the past, but there are still a good number lenders very much in the market. Continue reading Development Finance is still supported in the current market
Read the headlines from the past week featuring the latest columns and commentary from the buy to let and housing industry, as well as the latest news. Continue reading Property118 Landlords Newsletter – Issue 117
Bridging finance has quite distinct and individual features offering some very useful advantages over other types of secured funding.
The terms are flexible from one month upwards, which allows you to structure the loan to your requirements, and can often be arranged quickly with an agreement possible within 2 hours and the funds available in one or two weeks if the circumstances fit. Continue reading What can Bridging finance be used for?
There has been a significant shift towards bridging finance, especially in the residential property market. The high street banks are curbing their lending making it more difficult to apply for finance, but with demand for borrowing on the increase, bridging finance lenders have moved into the market to fill the gap.
Falling interest rates have also contributed to the rapid growth of the bridging industry. Bridging loan rates have fallen since the start of 2009 in line with market trends, and this has encouraged more investors to use bridging finance to fund their projects. The trend of declining rates continued in Q1 2012, with the average rate falling from 1.41% per month in Q4 2011 to 1.38%. The average rate also fell year-on-year – it was 1.52% in Q1 2011. We currently have bridging lenders on our panel that will offer rates as low as 0.7% per month. Continue reading Bridging finance is seeing a rapid growth in popularity, availability and affordability