Businesses turn to second mortgages: Knowledge Bank

Business owners have turned to second mortgages to raise capital as omicron continues to disrupt UK industry, Knowledge Bank says

Criteria tracker found brokers seeking ‘fundraising for business purposes’ in December were the fourth most searched term, some of which the company attributed to the Covid-19 variant .

He says, “While some of this research may be linked to disruption caused by staff isolation, others will use second mortgages for positive reasons, such as office improvements or renovations.

“With the shift to working from home prevailing in all industries, some businesses are re-evaluating their office needs and reorganizing spaces to maximize efficiency. “

The tracker adds that the third most searched second-load mortgage term last month was “raising capital for debt consolidation,” which “provides further evidence that some people have struggled financially as a result of the disruption caused. by the pandemic ”.

The tracker says that while age-related research is common for residential products, the maximum age is seldom a factor in the buy-to-lease market.

But adds that December marked the very first month in which “the maximum age at the end of the term” was the fifth most sought after term in the buy-to-lease market.

He says, “With the stock market still relatively volatile and home prices continuing to rise, some older investors may turn to the buying market for renting as an integral part of their retirement planning. “

In the residential sector, brokerage activity remained relatively stable compared to November.

The tracker says that with rising house prices, the terms “maximum age at the end of the quarter” and “income multiple used for affordability assessment” were the first and second most searched terms, respectively. the residential market.

The company says there was interest in stock release products.

He says, “This may have been triggered by the second reading of the Lease Reform Bill in the House of Commons which took place on November 29 of last year. The bill is expected to end ground rents for new and qualifying long-term residential leasehold properties. “

Brokers looking for “Loyal Remaining at End of Mortgage” and “Lease Remaining at Beginning of Term” were the second and third most searched terms last month, respectively.

The tracker adds that some of the borrowers looking to use the equity release may consider using the funds to take fire safety measures, such as removing the coating and expensive alarm clock, from fire safety systems. .

Earlier this week, Secretary of State for Grading, Housing and Communities, Michael Gove, said tenants in buildings over 11 meters tall will no longer have to contribute to the replacement of unsafe coatings.

He gave construction companies until March to agree on how to finance the work, and warned that legislation requiring them to do so could follow if a plan is not made.

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