Craig Upton

Craig Upton

Craig Upton has worked with UK Property Finance Ltd for over 18 years writing content for the websites and online finance publications. Craig writes website content, press releases and articles on popular financial brands in the UK. Creating strategic partnerships and supporting data with extensive research in the latest trends Craig is well versed with most products within the financial sector. Craig has worked within the online marketing arena for many years, having worked with British brands such as FT.com, Global Banking Finance and UK Property Finance, specialising in bridging loans and specialist mortgage finance. Craig has gained a wealth of knowledge and is committed to publishing unique content for our readers on various financial platforms supporting the products offered by UK Property Finance.

Time Running Out for Prospective Help to Buy Scheme Participants

The clock is ticking for eager participants looking to take advantage of the Help to Buy scheme in England, which is set to be withdrawn in March next year. Launched in 2013 and heralded as an effective initiative to help thousands buy their first homes, the scheme has also been criticised by many for consuming billions of pounds of taxpayers’ money.

Help to Buy has also done little to solve the problem of skyrocketing property prices and has, for the most part, played directly into the coffers of the housebuilders taking part in the scheme.

Modified on a number of occasions over the past decade, the initiative will be withdrawn in its entirety at the end of March 2023.

However as it takes time for interested parties to be successfully enrolled in the initiative, the deadline for applications falls much sooner. In fact, anyone looking to take advantage of Help to Buy will now have to submit their applications no later than October 31.

This semi-official deadline date was only revealed in May, and subsequent polls have discovered that almost three-quarters of first-time buyers are unaware that this is technically when the scheme comes to an end.

Is now the time to buy?

With the deadline on the horizon, housebuilders are increasingly pushing their available and near-completed projects on interested parties. But there are those within the real estate and finance sectors who are warning overly eager parties of the risks of diving in at the deep end without full and careful forethought.

Sarah Coles, senior personal finance analyst at investment firm Hargreaves Lansdown, has urged caution among those who may be caught up in the final rush for available homes.

“You might be tempted to race for the door before it closes,” she said.

“However, if you’re in too much of a rush to get to grips with what you’re getting into, you could be in for a nasty surprise in five years’ time.”

Help to Buy was launched by George Osborne in 2013 with the aim of getting the housing market back in gear after the financial crisis. As it stands, the scheme provides homebuyers with the opportunity to borrow between 5% and 20% of the full purchase price of a newly built home (40% in London) from the government. A standard 5% deposit is also payable by the buyer.

This means that in London, those who qualify for the scheme need only arrange a mortgage for 55% of a property’s total value. The scheme is only available on new-build properties, and total property values are capped differently in different regions of the country, from £186,100 in the north-east to £437,600 in the south-east to £600,000 in London.

The government loans are interest-free for the first five years, after which interest applies, starting at a low rate of just 1.75%.

Who is suitable for buying assistance?

Technically speaking, anyone over the age of 18 can apply to take part in the Help to Buy scheme. But as organising a 75% mortgage (on average) is likely to prove difficult in most parts of England (where average house prices are currently hovering at around £300,000), the scheme does not offer a great deal of relief for low-income individuals and households.

Instead, experts continue to state that the Help to Buy scheme in its current form is really only of any use to those with a high annual income level but low savings.

In addition, as the living cost crisis continues to escalate, coming up with even a 5% deposit in many parts of the country (London especially) is likely to prove impossible for most average earners.

 

Jade Buswell Nominated for Outstanding Senior Female Executive of the Year 2022

She is the outstanding senior female executive of the year 2022 (East Midlands).

At UK Property Finance, we are always delighted to receive positive feedback for the services we provide. We are particularly proud when a member of the UK Property Finance team is recognised for their achievements and their contributions to the industry we work in.

That is why it is with huge pride and pleasure that we announce that our own Jade Buswell has been nominated for the ‘Outstanding Senior Female Executive of the Year’ award at the 2022 Women’s Awards. And it is with even greater pride that we can confirm Mrs Buswell has been shortlisted for the final stages of the competition.

Outstanding senior female executive of the year 2022 (East Midlands)

“The Women’s Awards are a prestigious multidisciplinary award celebrating the outstanding achievements of women. The purpose of these awards is to raise awareness, recognise, and honour the hard work and valuable contribution women of all cultures, communities, races, and beliefs in all sectors make. 2022 is our sixth year as we continue to grow. There are many ways to get involved, least of all through making a nomination or sponsoring an award category. Become part of the movement to help women see their worth.” The Women’s Awards

According to the organisers of the Women’s Awards, the Outstanding Senior Female Executive of the Year category is dedicated to individuals who have held senior roles within organisations for a minimum of three years and are able to demonstrate the outstanding impact they have had on both their company and its workforce.

Shortlisting for the Outstanding Senior Female Executive of the Year award (for the East Midlands) took place in late July, and we are now counting down to the Women’s Awards Gala Dinner and Presentation set to take place later this year.

The event has been scheduled for Friday, September 9th, and will be held at Colwick Hall in Nottingham. Special guests set to make an appearance at the ceremony include Her Majesty’s Lord-Lieutenant of Nottinghamshire, Sir John, and Lady Peace, and tickets are already on sale via the following link:

Award Gala Event Tickets Here

Huge congratulations from the team at UK Property Finance.

Once again, we would like to congratulate Mrs. Buswell on her nomination for Outstanding Senior Female Executive of the Year and express our gratitude to all those who have supported UK Property Finance over the years.

For more information on any aspect of our business or the financial services we provide, contact a member of the team anytime for an obligation-free consultation.

 

Land Mortgages: An Introductory Guide

Getting a land mortgage is rarely a straightforward task. This is mainly due to a lack of available options, as most major lenders offer comparatively few (if any) specialist loans for land.

Hence, shopping around for a great deal on a landlord mortgage typically means looking beyond the usual High Street banks.

The UK’s specialist lending community has a wide variety of loan options available for land purchases. Examples of this include:

However as many of these lenders do not offer their services directly to borrowers, applications must be submitted via an approved broker.

Can I get a mortgage for land?

Yes, land mortgages are available from a wide variety of specialist lenders. However, qualifying for a land mortgage can be more difficult than obtaining a conventional mortgage.

With a traditional home loan, the funds are secured against the property you are purchasing. With a land mortgage, the property has not yet been built. Therefore, if the lender issues a loan that also covers the costs of building the property, they are taking a much bigger risk.

Lenders, therefore, need to see evidence of what the borrower intends to do with the land after it has been purchased. A full independent valuation of the proposed property or development must also be provided, which will be used as the basis for the maximum loan value issued.

What are the different land mortgage options available?

Specialist lenders offer a variety of different types of land mortgages, in accordance with the requirements of the applicant. Examples of these include:

  • Self-build mortgages
  • Agricultural mortgages
  • Woodland mortgages
  • Development finance
  • Land bridging loans

Ensuring you apply for the right mortgage is essential in order to get the best possible deal. If in doubt, consult with an independent broker, who will ensure you understand the unique features of the land mortgage options available.

Do I need to get planning permission ahead of time?

Not necessarily, but it will certainly broaden your borrowing options. When planning permission is granted on a plot of land, its value increases significantly. It also reassures the lender that your plans for the land can go ahead.

Obtaining a mortgage for land without planning permission is still possible but can be much more difficult. If you intend to apply for planning permission in the future or have other plans for the land you are purchasing, your broker will advise on the appropriate loan options.

What are the different types of planning permission for land?

There are two main types of planning permission that can be obtained for a plot of land. Both of which could significantly boost your chances of qualifying for a competitive mortgage:

Outline planning permission (OPP)
This is an agreement in principle issued by the local council, where one or more dwellings are to be constructed on a plot of land. OPP agreements are valid for a limited period of time (typically three years) and will need to be renewed once they have expired.

In order to qualify for a land mortgage after obtaining planning permission, your lender will expect to see formal evidence of the following:

  • The overall layout of the proposed dwelling(s)
  • The appearance of the dwelling(s)
  • Upper and lower limits for the height, width, and length of the dwelling(s)
  • Site access details
  • Landscaping proposals

Full planning permission (FPP)
Typically valid for a longer five-year period, full planning permission is granted upon meeting more extensive criteria. An application for FPP must satisfy all the requirements above, supplemented with detailed scale drawings of the property (or properties) and more detailed information.

FPP is always desirable in the eyes of lenders, as it adds considerable value to any plot of land. With FPP, a plot of land becomes more attractive to potential buyers, making it a safer asset to secure a loan or mortgage against.

What needs to be in my financial plan?

A detailed financial plan will need to be presented as part of your application. This is essentially a summary of all estimated construction costs, along with estimated labour costs, the logistics of how the property will be constructed, contractors who will be involved in the project, and so on.

Essentially, this is where you need to convince your lender that your project is not only viable but also economically sound. In addition, almost all lenders impose restrictions on the types of properties they will lend against and even the materials they are made of.

For example, brick-built properties are the only acceptable properties for some lenders.

Your financial plan, therefore, needs to be as detailed and comprehensive as possible. The clearer you outline your intentions and the specifics of your project, the more likely you are to qualify for funding.

How do land mortgages work?

Land mortgages work similarly to development finance loans, in that the funds are released in a series of stages. For example, the first instalment may be released to cover the costs of the land itself, followed by several subsequent instalments for key phases of the construction project.

This involves the use of surveyors hired by the lender to monitor the progress of the project. When the bank is satisfied that a key phase of the project has been completed, they will release the next instalment.

It is also possible to arrange a land mortgage that is paid in the form of a single lump sum. Bridging loans, for example, can be arranged and accessed in a matter of days, making them ideal for time-critical purchases and investment opportunities.

When the construction project is complete, the land mortgage can be repaid in the same way as a conventional mortgage. Or, in the case of a shorter-term facility, transition to a longer-term repayment loan.

There’s also the option of selling the property upon its completion in order to repay the loan in full and retain the profits.

How high are land mortgage rates?

Interest rates on land mortgages vary significantly from one product and provider to the next. As a general rule of thumb, the lowest rate you can expect to be offered is around 3%, but a more typical land mortgage rate would be around 4.5%.

With short-term funding options like bridging finance, interest is charged on a monthly basis, often as low as 0.5%. This could make a promptly repaid bridging loan a uniquely cost-effective facility, with no additional fees or penalties payable for early repayment.

How are land mortgage fees charged?

Additional borrowing costs vary on the basis of multiple factors, including the type of mortgage taken out and the issuer.

As with any mortgage, you will incur fees that you will need to consider before applying, such as:

  • Application Fees: Also known as arrangement fees, processing fees, and admin fees, which can be anything from zero up to 2% of the value of the loan,
  • Valuation Fees: The lender will want to see a formal valuation of the project’s estimated final value, provided by an approved surveyor and paid for by the borrower.
  • Legal Fees: All legal fees and conveyancing fees must also be covered by the applicant, which may be charged as a flat fee or a percentage commission on the value of the loan.

Comparing the market with the support of an experienced broker holds the key to getting an unbeatable deal, irrespective of the type of land mortgage you apply for.

Can land be refinanced?

It is always advisable to consider refinancing options as soon as the project is complete. This is due to the fact that interest rates and borrowing costs on land mortgages have a tendency to be higher than those of conventional mortgages.

If the home (or homes) constructed on the land qualify for a standard residential mortgage, significant savings could be made. However, even bigger savings could be made by using a short-term facility (such as a bridging loan) to cover the costs of the project and repay the full outstanding balance as quickly as possible.

For more information on any of the above or to discuss land mortgages in more detail, contact a member of the team at UK Property Finance today.

Buy-to-Let Property Investments: What First-Time Landlords Need to Know

Established and aspiring landlords alike continue to question the potential benefits of purchasing BTL properties via a limited company. Understandable, given the government’s no-holds-barred approach to BTL legislation over recent years.

Landlords were first hit (and hard) back in 2016, when the government introduced a new 3% stamp duty level on BTL property purchases. Next, policy reforms slashed mortgage and loan interest relief on second homes, which would eventually be removed entirely by 2021.

2019 brought more bad news for landlords in the form of the Tenants Fees Act, imposing much greater restrictions on what tenants could and couldn’t be charged for by property owners.

Whichever way you look at it, turning a profit as a private landlord is becoming trickier all the time. But as demand for quality rental homes skyrockets and average monthly rents break every record in the books, there’s still good money to be made with savvy BTL investments.

In total, the value of the UK’s BTL sector has grown from £239 billion in 2017 to more than £1.7 trillion today.

“There have been many challenges that have subdued investment into the private rental sector over the past few years,” comments Stephen Clark a bridging finance broker.

“But the sector has proved resilient, and we have seen continued demand for finance in this vibrant part of the economy.”

Safety and stability

The property market, in general, remains a relative safe haven for investors. Even the catastrophic events of the past two years have done nothing to quell the public’s appetite for quality homes in desirable locations.

In fact, figures from Nationwide suggest that from March 2020 to December 2021, average house prices in the UK grew by more than 16%.

Responding to demand from homebuyers and investors alike, major banks have been diversifying their mortgage portfolios as of late. BTL mortgage products, in particular, are available in abundance; there were more than 2,235 specialist mortgages at the end of last year.

What’s more, many banks have also been cutting interest rates on five-year fixed mortgages for BTL borrowers as a means to encourage more landlords to make their moves.

“The BTL sector has faced its share of upheaval and changes to regulations and requirements, so it is highly encouraging to see that providers are still keen to attract first-time landlords,” said Eleanor Williams at Moneyfacts.

“Rents have risen at the fastest rate on record, while tenant demand has almost doubled.”

Still, with inevitable Bank of England base rate hikes on the cards, mortgages across the board are not going to get any cheaper than they are now.

But when it comes to maximising profits and minimising tax liability on a BTL property, is it better to purchase homes through a limited company?

The pros and cons of limited company investments

Forming a limited company to purchase real estate is not something that should be done without careful forethought. In addition, the advice and input of an experienced broker could prove invaluable.

From a general perspective, the benefits of using a limited company to purchase a BTL property are as follows:

  • All profits generated on limited company BTL property purchases are subject to flat-rate corporation tax at 19%. By contrast, private landlords are subject to standard income tax bands, which are 20% in the normal band and up to 45% for higher-rate taxpayers.
  • Mortgage interest is classified as a business expense for limited companies, meaning it is tax-deductible. For private landlords, a tax credit of just 20% can be claimed on mortgage interest payments.
  • Revenue withdrawal options are also broader. All profits received by private landlords are taxed, whereas profits taken out of limited companies are only taxed once.
  • There are also options for decreasing overall tax liability, such as forming a family investment firm or a limited liability partnership. Assets can also be transferred to family members to avoid or reduce inheritance tax.

Downsides also apply with limited company BTL investments, including the following drawbacks:

  • Mortgage options are much more limited for businesses looking to purchase BTL properties, and it can be more difficult to qualify.
  • Larger deposits are the norm for these kinds of property investments, along with higher rates of interest and elevated borrowing costs.
  • Along with corporation tax, dividends withdrawn from the company are also taxable.
  • In order to transfer a property you already own into a company holding, it needs to be sold in the normal way. This means paying stamp duty at the normal rate, along with all associated conveyancing and legal fees, plus capital gains tax.

Despite this fairly even split of pros and cons, more landlords are purchasing properties through limited companies than ever before. In fact, the figures suggest that around 80% of all BTL mortgages are being issued to limited companies.

“Getting the ownership structure right might make a tremendous difference in the amount of tax you pay throughout your lifetime,” commented Rob Dix (the Property Geek).

As a general rule of thumb, experts advise considering forming a limited company where a landlord has a minimum of three private rental properties. By contrast, landlords with two properties or a single rental home may find it more cost-effective to simply hire an accountant to oversee their affairs.

What is Stamp Duty (and How Can a Bridging Loan Help)?

With the Stamp Duty holiday having officially ended, normal rates have resumed. This means that both first-time buyers and movers alike must once again factor Stamp Duty costs into their property purchase decisions.

What is stamp duty?

Getting to grips with the fundamentals of Stamp Duty is fairly straightforward, but essential nonetheless. Stamp Duty is payable on millions of property transactions each year, but not everyone is liable for Stamp Duty payments.

For example, residential property buyers in England and Northern Ireland pay no Stamp Duty on the first £125,000 of the property’s value. In addition, first-time buyers pay no Stamp Duty on the first £300,000 of their home’s market value.

After which, 5% is payable on the price of the property between £300,000 and £500,000. Higher rates apply for properties valued at £500,000 or more.

This means that most first-time buyers are not liable for Stamp Duty payments at all, with most property transactions in the UK falling below £300,000.

Different rules apply in Wales, where Land Transaction Tax is payable on homes valued at £180,000 or higher. Likewise, homes valued at £145,000 or more (or £175,000 for first-time buyers) are subject to Land and Buildings Transaction Tax in Scotland.

But what remains consistent across the board is the requirement to pay this property purchase tax as quickly as possible. You have just 14 days to make the payment in full, which is where a fast-access bridging loan could get you out of a bind.

Stamp duty on second homes

Existing homeowners purchasing a second property in England or Northern Ireland with a value in excess of £40,000 are liable for an additional 3% Stamp Duty payment (on top of the normal sum).

This applies to holiday homes, buy-to-let properties and second homes in general, but does not apply to houseboats, caravans and other non-static homes.

This higher-rate Stamp Duty may also be payable if you complete the purchase of your next home before selling your current home. However, you will be able to apply for a refund of this additional 3% Stamp Duty once the sale of your previous home is complete.

If you need a temporary financial solution to ‘bridge’ the gap between buying and selling, an affordable bridging loan could be just the thing.

Call UK Property Finance anytime to discuss the potential benefits of bridging loans in more detail.

Current stamp duty thresholds

As of October 1st 2021, the following Stamp Duty threshold came into effect for most homebuyers in England and Northern Ireland:

Proportion of property value

Stamp Duty paid

Up to £125,000

0%

£125,001 – £250,000

2%

£250,001 – £925,000

5%

£925,001 – £1.5m

10%

£1.5m+

12%

Land Transaction Tax (LTT) applicable in Wales as of July 1st 2021 are as follows:

Property value

Land Transaction Tax paid

£0 – £180,000

0%

£180,001 – £250,000

3.5%

£250,001 – £400,000

5%

£400,001 – £750,000

7.5%

£750,001 – £1.5m

10%

£1.5m+

12%

Home purchases in Scotland are currently subject to Land and Buildings Transaction Tax (LBTT) at the following rates:

Property value

Land and Buildings Transaction Tax paid

£0 – £145,000

0%

£145,001 – £250,000

2%

£250,001 – £325,000

5%

£325,001 – £750,000

10%

£750,001+

12%

Stamp duty on buy-to-let properties

Private landlords have been hit particularly hard by recent tax reforms in the UK and are also subject to higher Stamp Duty payments than conventional homebuyers.

A 3% surcharge now applies on all BTL property purchases valued at £40,000 or over – a full breakdown of current thresholds is as follows:

Proportion of property value

stamp duty paid

Up to £125,000

3%

£125,001 – £250,000

5%

£250,001 – £925,000

8%

£925,001 – £1.5m

13%

£1.5m+

15%

Buy-to-Let properties are subject to different taxation rules in Wales and Scotland – the respective information for which can be found on each country’s official government website.

Bridging loans for stamp duty payments

It is a legal requirement to meet HMRC’s Stamp Duty demands within 14 days of a property purchase being agreed upon. After this, significant penalties may be payable, increasing as the debt remains unpaid.

This is where affordable bridging finance has the potential to save homebuyers time, money and stress. If difficulties are encountered covering Stamp Duty obligations, a short-term bridging loan offers an ideal solution.

Unlike most conventional loans, bridging finance can be arranged within a few working days. This makes it ideal for covering time-critical expenses, where delays could lead to further costs and complications.

In the case of Stamp Duty, a bridging loan could be taken out to cover the required payment and repaid after a few months. Bridging finance is typically charged at a rate of around 0.5% per month, making it a uniquely cost-effective facility when repaid promptly.

A few common features of bridging loans:

  • Funds can be arranged and accessed in a few days
  • Loans available from £10,000 with no upper limits
  • No monthly repayments or initial deposit
  • Interest rates as low as 0.5% per month
  • Open to poor credit applicants and self-employed workers
  • Can be secured against most types of properties
  • Ideal for time-critical tax payments

Bridging loans are issued primarily on the basis of two things – security for the loan and a viable exit strategy. In the case of Stamp Duty payments, most bridging loans are repaid when the borrower’s previous home sells, or with personal savings accrued over the course of several months.

It is even possible to repay bridging finance with a conventional unsecured loan or personal loan, which can then be repaid gradually with affordable monthly instalments.

If you have any questions or concerns regarding your capacity to meet your Stamp Duty obligations, call UK Property Finance anytime for an obligation-free consultation.

What other purposes can bridging loans be used for?

The beauty of bridging finance lies in its versatility, as the funds can be used for almost any legal purpose.

Just a few of the most common applications for bridging loans in the UK include the following:

  1. Escaping the property sales chain

Bridging finance can grant existing homeowners the spending power of a cash buyer when looking to relocate. Rather than relying on the sale of their current home to fund their move, they can buy their next home with a bridging loan and repay the facility at a later date when their previous home sells.

  1. Renovations, restorations and conversions

Sellers intent on selling their properties for the best possible price often conduct repairs and renovations, prior to putting them on the market. Bridging loans are commonly used to fund minor, moderate and major renovations to residential properties, with the aim of repaying the loan when the property sells for an agreeable price.

  1. Auction property purchases

Buying a low-cost property at auction means paying the full outstanding balance within 28 days; as bridging finance can be organised within a few working days, it is ideal for funding time-critical purchases and investment opportunities like these.

  1. Fast purchases 

It could also simply be that you have found your dream home at an unbeatable price, and you would prefer not to be beaten to the punch by a competing bidder.  With bridging finance, rapid property purchases are possible without having to rely on conventional loans or mortgages.

  1. Starting a business 

Bridging finance also has an endless range of business and commercial applications. Many borrowers use bridging loans to raise the funds needed to start a new business, repaying the loan at a later date when their start-up begins turning a profit. Lending criteria for bridging finance are fairly relaxed, making it ideal for entrepreneurs with no provable experience or track record.

How can I get a bridging loan?

The key to getting a good deal on a bridging loan lies in seeking experienced broker support at an early stage. Your broker will help determine your suitability for bridging finance before scouring the market to find the perfect product for your needs.

They will also negotiate on your behalf to ensure you get an unbeatable deal while ensuring your application is processed as quickly and smoothly as possible.

For more information on any of the above or to discuss the benefits of bridging finance in more detail, contact a member of the team at UK Property Finance today.

Government Introduces Help to Build in England

A new scheme has been unveiled by the UK government, which will supposedly assist “thousands” of first-time buyers looking to get on the property ladder. Though unlike traditional Help to Buy schemes, this new initiative offers support to those who plan on building their own homes from scratch.

Named Help to Build, the programme will reduce the immediate costs of building a home by offering those who take advantage of lower-deposit mortgages with fixed introductory interest rates.

The scheme was officially announced last week by the Department for Levelling Up, Housing, and Communities, and £150 million has been set aside to help those who qualify.

First-time buyers are finding it increasingly difficult to get on the property ladder, with average house prices having once again surged to record highs in April at £281,000. Over the course of just 12 months, the average price of a UK home has increased by more than £31,000, pricing more prospective buyers than ever before entirely out of the market.

What is help to build?

Help to Build provides those looking to build their own homes with the opportunity to access a special mortgage of up to £600,000, which can be secured with a deposit of just 5% and offers the first five years interest-free. This 95% LTV mortgage will only be available through a selection of approved lenders; the scheme is being managed by Homes England.

Similar to property development finance, Help to Build mortgages will be issued in a series of stages, coinciding with the completion of key phases of the construction project. The maximum loan available will be £600,000 to cover the costs of the land and the home’s construction, or £400,000 on build costs alone where the land is already owned.

“Through the Help to Build scheme, we will help thousands more people onto the property ladder by giving them the opportunity to build homes that are perfectly tailored to their needs and in the communities they want to live in,” said Housing Minister Rt Hon Stuart Andrew.

“This innovative scheme will build on our work to break down the barriers to homeownership, as well as create new jobs, support the construction industry, and kickstart a self- and custom-build revolution.”

Who can apply?

While the scheme is designed to appeal primarily to first-time buyers, it will also be open to anyone interested in building their own home in England. In order to qualify, applicants will need an excellent credit score, a detailed breakdown of the project’s estimated costs, and evidence of full planning permission from the relevant authorities.

In addition, the newly constructed home must be the sole residence of the mortgage holder; the scheme is not available to those looking to build a second home, or a BTL home.

After the first five interest-free years, interest will apply, starting at 1.75% in the sixth year and rising annually thereafter.

“Self-build isn’t the preserve of the wealthy and Help to Build makes it more practical and accessible than ever before for people to build their dream home,” said Andrew Craddock, Darlington Building Society chief executive.

“This scheme also opens up opportunities for first-time buyers. It is a fantastic example of the market moving with the times and people’s changing wants and needs.”

How Can Bridging Finance Help During Divorce Proceedings?

Far from a rarity, divorce is becoming more commonplace than ever before. In fact, research suggests that a full 33% of all UK marriages end in divorce. Separation is always emotionally fraught and logistically complex, but it can also be surprisingly expensive.

This is particularly true in instances where one partner owes the other a significant sum of money or where there are marital assets that cannot be divided equally. For example, if one of the partners wishes to keep ownership of the house they shared after the other leaves.

The financial complications associated with divorce often take separating partners by surprise. Little to no specialist support is available on the High Street but can be sourced from elsewhere from established independent lenders.

Bridging finance in particular can be useful when dividing assets and consolidating expenses due to its flexibility and prompt accessibility.

Financial support during a divorce

Every separation is unique, and the financial complications of divorce differ significantly from one couple to the next. Some partners split amicably and come to agreements on asset division with no outside intervention. Elsewhere, others face the unsettling process of dividing a long list of marital assets, which, in the case of tangible property and possessions, often cannot be split down to the middle.

The definition of ‘marital’ assets is also somewhat open to interpretation in terms of the proportion of any given asset that belongs to each of the partners. Legal support and even court intervention are often required in order to determine who owns what and how joint assets should be split.

At this point, it may become necessary for one of the partners to pay the other a large lump sum of money. This could be to ‘buy them out’ of the home they once shared, to take full ownership of a shared car, and so on.

Conventional loans and mortgages can be too complex and time-consuming to arrange for such purposes, whereas a specialist bridging loan can often be accessed within a few working days.

The role of divorce loans

A divorce loan is a special type of bridging finance issued for these exact purposes. As the name suggests, the facility is designed to ‘bridge’ urgent yet temporary financial gaps while the borrower gets their financial situation back on track.

With divorce, one thing both partners are always in agreement on is the importance of a prompt resolution. Nobody wants separation proceedings to drag on for months, but this is often the case where financial complications prove burdensome.

Bridging finance can be used for any legal purpose and provides borrowers with the opportunity to quickly liquidate assets for division. It can also be a useful facility for clearing debts with a former spouse or for buying them out of jointly owned assets.

For example, a bridging loan could be taken out against a co-owned property at an LTV of 50%. By accessing 50% of the equity tied up in the property, the partner who will continue living there can pay off their ex-spouse and take full ownership of their home.

This bridging loan will then accrue interest at a rate as low as 0.5% per month, giving the borrower plenty of time to consider the options available. They could sell the home to pay off the loan a few months later or transition the bridging loan to a longer-term mortgage for flexible repayment.

The overriding point is that with bridging finance, everything can be taken care of as quickly as possible. Rather than waiting weeks (or even months) for a major bank to reach a decision on a loan or mortgage application, the funds needed to bring the matter to a swift conclusion can be accessed in a matter of days.

How does bridging finance for divorce work?

Bridging finance for divorce works in the same way as conventional bridging finance.

A few of the key features of bridging loans for divorce (and other purposes) are as follows:

  • Loans available from £20,000 with no upper limit
  • Repaid in a single lump sum after 6 to 18 months
  • Can be used for any legal purpose whatsoever.
  • Competitive loans are available for poor credit applicants.
  • No proof of income or employment status is required.
  • Monthly interest as low as 0.5%
  • Loans can be arranged and accessed within a few working days.
  • Available with LTVs as high as 85%
  • Can be secured against any type of property (and other assets).
  • No arrangement fees or exit fees

Essentially, bridging finance works similarly to a mortgage, but on a much shorter-term basis. The loan is arranged in a matter of days, and the facility is repaid in full within months.

During time-critical situations where financial matters need to be resolved as quickly as possible, bridging finance offers a practical and affordable solution.

For more information on any of the above or to discuss divorce finance in more detail, contact a member of the team at UK Property Finance today.

What is a bridge loan?

Bridging loans are short-term secured loans that can be used for any legal purpose. They are secured against assets of value in the same way as a mortgage, but are much quicker to arrange and are designed to be repaid within 6 to 18 months. As the name suggests, bridging finance is designed to “bridge” temporary financial gaps.

How long does it take to get the funds?

With all the required documentation and supplementary evidence in place, a bridging loan can be arranged in a matter of days. Completion times vary from 1 to 14 working days, depending on the borrower’s requirements and the strength of their application. Broker support can significantly accelerate the speed and simplicity of bridging finance applications.

Can I still get a bridging loan with bad credit?

Yes, bridging loans are issued primarily on the basis of security, along with the applicant’s proposed exit strategy. If you have assets of value (like your home) to cover the costs of the loan and a plan to repay the balance in full by an agreed date, you can get a bridging loan irrespective of your credit status.

Can self-employed workers qualify for bridging finance?

Yes, employment status and proof of income are not ‘binary’ eligibility criteria for bridging finance. If you have viable assets of sufficient value to cover the costs of the loan and can comfortably afford to repay the balance in full by the agreed-upon date, your employment status is not important. However, it is important to enlist broker support at an early stage in order to ensure you target the right lenders with your applications.

What type of security is required?

Most bridging loans are secured against properties owned by the applicant. These can be residential properties, commercial properties, and all types of mixed-use properties, along with land (with or without planning permission). Some lenders are also willing to accept other assets of value or security, including business equipment, cars and commercial vehicles, jewellery, watches, and even company shares.

For more information on any of the above or to discuss any aspect of divorce finance in more detail, contact a member of the team at UK Property Finance today.

Why it Pays to Make Your Rental Properties More Energy Efficient

Most current indications point to a gradual but accelerating return to town and city life. The latest data from Rightmove confirms a major spike in demand for rental properties in and around London as workers once again find themselves beckoned back to the office.

All of this is playing directly into the pockets of buy-to-let landlords, who across the UK are reaping the benefits of record-high monthly rents. Unfortunately, many (if not most) of these BTL investors are also finding their futures blighted by the prospect of new minimum EPC rating requirements on the horizon.

Recent estimates suggest that at least 60% of all current housing stock in the UK has an EPC rating of D or lower. This would suggest that the vast majority of properties will need to be upgraded significantly in order to meet the new minimum C rating within the next few years.

The extent of the repairs required will vary significantly from one property to the next. Even so, it is estimated that the average landlord will face costs of between £6,000 and £10,000, some significantly more.

Understandably, the tendency among many cash-strapped landlords is, for the time being at least, to bury their heads in the sand. But while forking out significant sums of money for energy-efficient upgrades is far from fun, it’s something that really needs to be done sooner rather than later.

Tenants prefer energy-efficient properties

With household energy prices at record highs, tenants are increasingly setting their sights on energy-efficient properties. Further hikes are on the cards for the coming months, which will make it increasingly difficult to let out inefficient homes for decent prices.

The more energy-efficient a rental property, the easier it is to let it go and get the best possible return on your investment.

You have no choice but to make the necessary improvements.

The costs of making the renovations required to meet the government’s new standards are only likely to increase over time. Those who wait until the last minute will only face the prospect of elevated costs and a mad dash to get over the finish line in time.

Acting early could therefore save landlords time, money, and stress—all in significant quantities.

You could face heavy penalties if you don’t

For those who fail to meet the deadline, significant penalties will almost certainly apply.

“The proposed Minimum Energy Standards for rented properties will shift from an E rating to a C rating under the new rules, and making changes isn’t optional. The new regulations will be introduced for new tenancies first in 2025, followed by all tenancies in 2028,” commented Sundeep Patel, Director of Sales at Together.

“If your property is found to fall short of the required rating, you could face a fine of up to £30,000. Plus, you’ll have an ungettable property on your hands, which is not only a waste of an essential residential resource but also means you’ll incur a loss of rental income.”

If you would like to learn more about the potential benefits of bridging finance for energy-efficient home improvements, contact a member of the team at UK Property Finance today.