CHL Mortgages has launched a buy-to-let renovation range which it says is designed to help landlords improve the energy rating of their rental stock and improve its overall condition.
He adds: “The products offer the possibility of releasing the costs of the renovation once completed, without having to change the product.”
The range consists of three products: light renovation, cosmetic improvement and improvement of the energy performance certificate.
“The first two products are designed to increase the future asset/rental value of the property, with the last being a green mortgage option specifically designed to improve the energy efficiency of the property,” explains the lender.
The loan suite is available to individuals and limited liability companies and applies to standard buy-to-let properties, small multi-occupancy homes and small multi-unit freehold blocks with fixed rates over five years from 4.41%, with fees from 2%. Loans are calculated on the value before works with a deduction retained on the basis of the estimated valuation after works.
The product line has a maximum loan-to-value ratio of 75% (before and after the works, which the company says means that owners can free up more if the value of the property has increased after the works) and the maximum cost of works must not exceed 25% of the value of the property before works.
Light renovation loans are designed for work that does not require building regulation approval and includes work that may be approved under the competent person scheme, such as the installation of a replacement kitchen or replacement of roof coverings.
Energy Performance Certificate upgrade offers are aimed at landlords looking to improve the energy efficiency of their BTL property to meet the Government’s proposal for existing rental properties to have an Energy Performance Certificate rating minimum 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 Agreements are designed for properties in need of minor cosmetic improvements and repairs, which allow owners to improve the condition of the property, such as updating fixtures and fittings or improving the condition of the property. installation of replacement flooring.
For all of the above products, refurbishment work must be completed within three months of the initial advance. Owners must provide a detailed schedule of proposed work when applying.
CHL Mortgages Commercial Director, Ross Turrell, says, “This product line has been designed and developed based on feedback received from our channel partners and a growing number of their homeowner customers who are looking for a product that offers a unique and that removes the uncertainty around renovation financing supported by a simple process.
“This alternative green mortgage product is more than just a pricing game and provides an additional and viable option to alternative forms of financing such as ‘transition’ and ‘term renovation’ solutions while helping to reduce administrative burdens. and save on multiple inspections and legal fees.”