Precise has streamlined its Bridge to Let (BTL) product. It is unsurprising that many clients have never heard of this mortgage, simply because it was never just one product, but two.
A bridging loan is provided, and a remortgage is then allowed immediately after completion of the bridge.
This is an incredibly useful product for investors looking to bring unlettable property back into the market, arguably something that should be celebrated given the chronic lack of housing in the UK – lenders’ understandable six-month rules slowing the process and a terrible offering from lenders on light refurbishment loans.
The key advantage of this product is that clients do not need to wait six months to replace the more expensive bridge to a reasonable BTL mortgage. In addition, clients get a valuation for both the property in its present state, and the expected valuation once the works have been completed.
In practice, though, this was always two applications, and the work involved was significant. There was always a concern that the bridge would be arranged and then come up against an issue with the remortgage, leaving the client stuck on a more expensive deal. This has never happened, but the worry remained. Under the new product, there is no second application.
This is a very welcome product, one that can comfortably be used by those without an extensive knowledge of bridging lenders, and where the client perhaps is not experienced enough, or has not enough cash to handle the risk of a bridge and remortgage strategy.
For a broker, this provides a much more structured method of taking un-mortgageable property and quickly bringing it back into use, releasing some of the increased value to carry forward to another project.
Stuart Phillips is a mortgage broker at Aalto Mortgages