The introduction of the new HMO regulations at the end of 2018 have impacted landlords across England. Thankfully, bridging loans are a useful source of capital for buy-to-let property owners who need to carry out refurbishments to bring a house or flat in line with the new required standards.
Two recent examples of fast bridging loans that MFS has provided highlight this point.
Short-term funding for light refurbishment on an investment property in north London
The first case came via broker, who introduced a client to MFS who required funds to complete works on a London investment property. The individual needed to ensure he was complying with the new mandatory HMO regulations, which meant they needed to carry out light repairs on their property.
MFS swiftly issued terms to meet the client’s needs at a competitive rate. MFS arranged for a valuer from its panel of surveyors to value the property within 24 hours of receiving of the enquiry, with the full 180-day report following two days later.
We issued a loan of £260,000, which was secured against the property asset that had been valued at £700,000 (an LTV of 37%).
With the support of our solicitors, we were able to meet the borrower’s deadline. Both the client and the broker were extremely pleased with the way MFS handled the case and provided a fast and effective solution. The exit was through long-term refinancing once the works were complete – and as a further benefit, MFS will also not issue any penalty or fee in the case of an early repayment.
Short-term funding for light refurbishment on residential property in London
In the second example, MFS was approached by a broker we had previously worked with – they introduced a client who urgently required funds to complete light refurbishment works on an investment property, which like the first case was in the capital. The house was in need of modernisation and updates to ensure it complied with HMO standards.
To ensure Market Financial Solutions was able to meet the client’s tight deadline, we ensured a valuer from our panel of surveyors was able to value the property the next day, with the report to follow 48 hours later.
The deadline was met, with both the borrower and client delighted with the speed and quality of the service that was delivered. Again, the exit strategy was through long-term refinancing once the works were complete.