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Wirral Letting Agents Reveal: Buy to Let Mortgage Rates and the 'Refurbish to Let' Shake-up

Muzzammil Haroon

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As a result of rising property prices detrimentally effecting the return on rentals, an escalating amount of landlords are trying to make profit from refurbishments. Not just restricted to the Wirral and Liverpool, landlords across the country are becoming restless to discover ways to preserve decent levels of returns in spite of intensifying property prices. The forecasted increase in mortgage rates over the coming months is also certain to be on the minds of more than a few.

So, not a land to be beaten by circumstances, many of Britain's landlords have been adopting the idea of refurbishing to let as a way of improving their overall profits. But just what is some great benefits of refurbish to let? And is it a technique assured to be effective?

The Strategy.

Refurbish to Let entails buying run down homes and quickly attempting to boost their value by going through a radical refurbishment. Some landlords decide to do the work by themselves, but many choose to hire a team of experts for a quicker and more refined result.

Lenders say more landlords are now eager to buy properties in need of significant work, so long as they can buy the property in a cheap deal. A popular move is to add even more rooms to the property before they put it on the rental market.

Established landlords will know about the development of HMO. For everyone else, ‘HMO’ is ‘House in Multiple Occupation’ where multiple tenants live together and this is commonly seen as the highest yielding form of the complex web that is Buy to Let.

Refurbishment not only increases the property's value, but also decreases long term maintenance costs and will likely appeal to high quality tenants who will stay put for longer.

The Catch.

Sold? Don't go rushing out to find the Wirral's hidden gem of an inhabitable home just yet. Investors do have their pick at present of Buy to Let mortgages, gratis from the austere affordability tests on owner-occupiers, yet securing finance for a refurbish to let is an entirely different story. Ordinarily, many investors wanting to do a refurbishment on a property pay cash.

If you are a landlord with a long portfolio of properties, you could potentially almost certainly raise the mortgage on one property in order to pay straight up for the refurbishment then raise a loan against it once the project is full. But even this process can entail multiple applications, booking fees, valuations and surveys and even early repayment charges on the initial mortgage.

In the past, landlords have had a dreadful time, finding it very difficult to secure a mortgage if a property they're interested in is inhabitable, getting hold of the capital can be nothing less than a challenge.

Even where refurbishment is not part of the process, HMO investments are generally not the most promising sign for anyone searching to obtain a loan. Lenders see HMOs as risky, maybe as the rooms are let out on their own and because there are additional regulation requirements essential to carry out the multiple occupation, such as registering with a local authority.

The chances.

Landlords might still embark on major refurbishment works using conventional Buy to Let borrowing if they are prepared to look hard. A number of properties might only need a light refurbishment, so there won't be a dependence on a specialist loan.

Our Wirral Letting Agent specialists have found the cheapest deal for Buy to Let borrowers with a 40pc deposit, for example, is with the Post office at 3. 65pc. Unfortunately though, only experience landlords would qualify for this loan.

Less seasoned landlords can look to Interbay http: // if they have a 30pc deposit. Interbay offers a 7pc rate for a light refurbish and a 7. 5pc rate for a heavier project. Interbay customers pay a 1. 9pc broker fee.

Britain's high street banks are playing catch up in the refurbishment market. HSBC are looking at launching a hybrid loan and mortgage deal following feedback acquired from their buy-to-let customers. None of the major banks have offered a similar product just yet though.

The Verdict.

So there we have it. Propeller lettings as a favourite Wirral Letting Agents , have worked with Refurbish to Let clients in the past and we know it isn't easy. If you do choose to go ahead with it, be careful not to go over your building work budget. Do you have the necessary expertise to know what will really add value to properties you could buy to refurbish? If not seek specialist advice. Do you have the trade contacts and experience in pricing out a refurbishment? Again if not, tread cautiously and do your research.

As Letting Agents Liverpool and Wirral , we are here to answer questions about tenant requirements, the Wirral is a greatly varied place, some places may be a hub for families aiming to rent three bedroom homes; other areas are filled with HMO properties. We can additionally enable you to learn about the rental income in the area you are looking to buy. Get in touch with us at


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