CHL Mortgages has launched a buy-to-let refurbishment range which it says is designed to help landlords improve the energy rating of their rental stock and improve its general condition.
It adds: “The products offer the ability to release the costs of the refurbishment upon completion, without having to change product.”
The range consists of three products – light refurbishment, cosmetic improvement and energy performance certificate improvement.
“The first two products are designed to increase the future asset/rental value of the property, with the latter a green mortgage option which is specifically designed to improve the energy efficiency of the property,” the lender says.
The suite of loans are available to individuals and limited companies and is applicable on standard buy-to-let properties, small houses in multiple occupation and small multi-unit freehold blocks with five-year fixed rates starting from 4.41%, with fees starting at 2%. Lending is calculated on the pre-works value with a retention held based on the post-works estimated valuation.
The product range has a maximum 75% loan-to-value (pre and post works, which the firm says means that landlords can release more if the value of the property has increased post works) and the maximum cost of work must not exceed 25% of the pre-work property value.
Light refurbishment loans are designed for works that do not require building regulation sign-off and includes works that can be signed off under the competent person scheme, such as the installation of a replacement kitchen or the replacement of roof coverings.
Energy performance certificate improvement offers are for landlords looking to improve the energy efficiency of their BTL property to meet the government’s proposal for existing rented properties to have a minimum energy performance certificate rating of C or higher from April 2025. This work may include the installation of replacement hot water and heating systems or the installation of new doors and windows.
Cosmetic improvement deals are designed for properties requiring cosmetic and minor improvement and repair work, which allow landlords to improve the condition of the property, such as updating fixtures and fittings or the installation of replacement floor coverings.
For all of the above products, refurbishment work must be completed within three months of the initial advance. Landlords must supply a detailed schedule of the proposed works at application.
CHL Mortgages commercial director Ross Turrell says: “This product range has been designed and developed in line with feedback received from our intermediary partners and a growing number of their landlord clients who are looking for a product which offers a single, one-stop solution which removes uncertainty around funding refurbishment supported by a simple process.
“This alternative green mortgage product is more than a simple pricing play and provides an additional and viable option to alternative forms of finance such as ‘bridging’ and ‘refurb in term’ solutions while helping to reduce administrative burdens and save on multiple inspection and legal fees.”