Buy-to-letApr 13 2023

Specialist bridging loan created for buy-to-let investors

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Specialist bridging loan created for buy-to-let investors
Impact Specialist Finance's semi-exclusive product aims to fill a need among buy to let investors for financing. (Rene Asmussen/Pexels)

Castle Trust Bank and Impact Specialist Finance have launched a refurbishment bridging product for buy-to-let landlords to help them update or renovate a property.

The new 80 per cent net loan-to-value refurb bridging product will use title insurance to speed up transactions.

According to specialist packager Impact Specialist Finance, this light and heavy refurbishment bridging product will be available through a small, select number of distributors but according to Dale Jannels, managing director at Impact Specialist Finance, these products are in much demand from clients. 

He said: "With the proposed EPC changes on the horizon, along with increased pressures on yields, the demand from property investors to improve existing stock, plus refurb new acquisitions will remain high for the foreseeable future.

"These new options from Castle Trust Bank are a welcome addition to the market and we are delighted to be chosen as one of the distribution partners.”

The product is designed for clients looking to update or renovate a property.

Headline features are:

  • 0.85 per cent rate, terms available between 6-12 months for light refurbishment and 9-18 months for heavy refurbishment
  • Rolled up interest
  • No ERC (minimum interest is 3 months)
  • DIP decision is fully underwritten by an underwriter day one.

The product uses title insurance to speed up transactions. Pricing applies to loans between £200,000 to £5mn, with loans over £5mn subject to bespoke pricing.

The loans and are available for residential property only with a 2.25 per cent arrangement fee.

The Light Refurbishment product is available for works that fall under permitted development, works that require building regulation sign-off, residential to HMO conversions up to six tenants, replacement windows, decoration, light central heating and electrical work, internal reconfiguration, full rewiring, and installation of new bathrooms and kitchens. 

The Heavy Refurbishment product can be used where planning permission is necessary, although not on ground-up developments. 

Anna Lewis, commercial director at Castle Trust Bank, said: “Both products are supported by dedicated sales, underwriting and processing teams and net LTV calculations means that fees and interest can be added to the loan above the maximum 80 per cent LTV.

"This will help buy-to-let investors to increase their leverage in an environment where leverage isn’t easy to achieve.”