Our specialist lending expert, Steve Sanderson, gives his view on the widening of lending options available to landlords….
Clever Lending are seeing a growth in enquiries whereby professional landlords are struggling to obtain buy-to-let finance from mainstream lenders.
Reasons for this include a tightening of criteria by High Street lenders, more stringent stress testing and an uncertainty in providing the best route depending on the client’s tax position, now and in the future.
As a specialist distributor, Clever Lending look at things differently. We consider the full position of the property professional, which means we can assess the possibility of using second charges as a finance route to acquire property as well as bridging finance or commercial buy-to-let mortgages.
Bridging finance, or short-term finance, was traditionally used to ‘bridge the gap’ between residential house purchases, usually when a chain was involved. However, things have moved on and bridging can now be used for many requirements, from buying property quickly at an auction or acquiring below market value properties on a time-dependant offer, or even for those properties that are unmortgageable with mainstream lenders.
Steve Sanderson, Bridging & Commercial Specialist at Clever Lending, said: “The traditional way of acquiring short term finance is changing, nowadays prospective property owners are more likely to purchase or renovate a property within a timeframe which best suits them. Bridging finance is a great way of getting hold of much needed funds, avoiding the risk of losing a highly desired property or slowing down renovations to an existing property.”
The need to deal with non-standard requirements is increasing, and specialist lending criteria has widened to include market leading rates, no exit fees and terms from one to eighteen months on a variety of property and client profiles. It should be noted the repayment of the loan needs to be determined upfront.
For landlords and property developers where a short-term loan isn’t a suitable route, an alternative is to look at longer-term mortgages specifically geared towards commercial property uses.
We have access to many lenders that will consider bespoke solutions on a wide variety of property investments, including residential investment property, buy-to-let, HMOs and mixed-use units.
Tax implications on buy-to-let properties are high on a landlord’s agenda at the moment, and it’s important to ensure you are getting the right advice for each individual case.
The property investment market is a complex one, and getting access to the right funding and the right advice is essential for property investment growth. Speak to the Clever team to make sure your clients are heading in the right direction.
