Shawbrook helps experienced investor with new “Lending for Refurbishment Costs”

20 September 2018

Case highlights bank’s new product where investors can access 100% of the refurbishment costs for short term projects.

Shawbrook were approached by Strategic Partner B2B Financial with an experienced customer seeking short term finance on an auction purchase. The loan of £207,750 was secured against a property value of £300,000, and a purchase price of £277,000 (75% LTV). Thanks to Shawbrook’s innovative new product addition allowing customers to access 100% of the refurbishment costs, the bank was able to offer 85% LTV (£235,450) which allowed £27,700 in costs to be covered under the facility, delivering a material benefit to the customer in terms of cash flow.

This was completed on the STL1 residential light refurbishment product on a 12 month term with serviced interest. The teams were under pressure to hit auction timelines and with B2B Financial working closely with the Shawbrook underwriting team, this application journey was completed in just 16 days from start to finish.

Having benefitted from the Shawbrook “Existing Customer Discount”, which is available on the margin or the arrangement fee, the customer is now looking for a longer term solution once the works are complete. This represents a superb example of Shawbrook’s “bridge to let” offering, and serves to highlight the importance of lender, broker and solicitor working closely together across the customer journey.

The customer plans to exit by switching to a Shawbrook term loan once this project is complete, the advantage being no additional fee and the ability to borrow against the new GDV to 75% LTV. This creates further cash flow benefits and opens up more investment opportunities as a result.

Adrian Rawle from B2B Financial comments;

“It’s encouraging to see this kind of innovative product hit the market at a time where the BTL landscape faces some real challenges. The lending for costs option really fills a need in the market and the 16 day completion timeline was quite superb. Our client is delighted with the outcome and we are grateful to Shawbrook for making this an incredibly slick process with excellent service all round”.

Gavin Seaholme, Head of Sales for Shawbrook Commercial Mortgages added;

“We were really pleased to bring this product to market over the summer and it has generated significant traction already. With research just in from our 2018 Buy-to-Let Report that indicates a slightly dampened market, forward thinking products like this allows the professional investor and landlord community to continue to build and grow, and we are delighted to be able to facilitate this”.

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