The Intermediary – February 2025 - Flipbook - Page 46
SPECIALIST FINANCE
Opinion
Getting more out of
our housing stock
T
he start of the year
oen sparks change,
with buyers and tenants
keen to make their
next move and secure
their ideal home. It’s a
time of opportunity, tempered by the
reality of limited options and intense
competition. Yet, they face plenty of
competition and limited choice.
The latest figures from
Propertymark show that the average
estate agent branch has 108 new
prospective buyers registered – a twoyear high – but only 44 properties
available. It’s a similar story in rentals,
with an average of seven applications
for each property – an imbalance that
continues to drive both house prices
and rents higher.
If we are to get closer to meeting this
demand, we need more homes. This
won’t only come down to developers
building new properties; we also
need to get more out of our existing
housing stock.
Property investors know that
giving properties a lile aention
and carrying out small changes can
significantly boost their appeal.
But what about more substantial
projects, where the property
undergoes significant transformation?
Refurbishment works
A simple faceli – a bit of TLC – can
have a big impact on a property.
Modest improvements, such as puing
in a new kitchen or bathroom, can
open up the property to new tenants,
potentially pushing up rental income
in the process.
Many investors have properties
within their portfolios that have gone
through this kind of ‘glow-up’ process,
making them more aractive to
tenants in the local area.
However, we’re seeing an increasing
number of investors keen to take
on larger, more ambitious projects.
These aren’t just about upgrading
a kitchen, but involve substantial
46
The Intermediary | February 2025
works like adding an extension or
converting a lo.
The reasoning is simple:
transforming properties to appeal to
a broader pool of tenants can result
in beer yields. This is even more
important with rising costs and Stamp
Duty changes.
Importance of funding
While investors are eager to take
on these exciting projects – and are
actively identifying properties with
potential – the challenge oen lies
in securing funding to make those
projects a reality.
Brokers tell us that one of the biggest
challenges for advisers and their
clients is finding lenders that truly
understand these types of projects.
Flexibility and a determination to get
deals done are crucial, particularly
for larger and more unusual
refurbishment projects.
Recent feedback has shown strong
demand for tailored funding solutions
to support investors with larger
refurbishment projects, reflecting the
market’s appetite for more ambitious
property upgrades.
By offering funding from day one
at up to 70% of the current property
value, we’ve supported numerous
investors in pursuing ambitious deals
with confidence. It’s partnerships like
these that make all the difference in
the success of these projects.
Looking to the exit
Brokers working with experienced
property investors know that
understanding the exit strategy from
the outset is just as crucial as securing
initial funding. It’s essential to have
clarity on how the short-term finance
will be repaid.
While many investors aim to sell
the property aer the refurbishment
work, this isn’t always the case. Some
investors plan to retain the property as
a long-term rental asset. Transitioning
from bridging finance to buy-to-let
ALEX UPTON
is managing director, specialist
mortgages and bridging at
Hampshire Trust Bank
Recent feedback has
shown strong demand
for tailored funding
solutions to support
investors with larger
refurbishment projects”
(BTL) finance can be complex, which
is why the choice of lender is so
important.
Brokers value lenders that
understand the different stages of
lending within property projects,
ensuring their clients can move
seamlessly from one phase to the next
with the right financial solutions
in place.
Whether it’s development finance,
bridging, or buy-to-let, we design
bespoke solutions tailored to the needs
of each individual client.
Working with a lender that offers
this level of expertise can eliminate
delays and ensure a smooth, stress-free
transition between funding products.
Ambitious projects
Investors will continue to target
ambitious refurbishment projects, but
those projects can only succeed with
the support of flexible lenders.
Lenders that are willing to adapt
and deliver tailored solutions will play
a vital role in helping brokers and
their clients navigate a market where
demand continues to outstrip supply,
ensuring more properties reach their
full potential. ●
