Both light and heavy refurbs in strong demand as portfolio landlords seek to boost margins and, crucially, compete with PRS developments.
‘Product-less’ lender, Octane Capital, saw a 40% rise in refurb loan AIPS (agreements in principle) during the first quarter of 2019, compared to the same three months last year. Actual completions were also up sharply, by an impressive 22%.
Just over half way into the second quarter of the year, Octane Capital has also seen 12% more refurb AIPs compared to the whole of Q2 2018. The applications are an even mix of light and heavy refurb. Completion levels for H1 2019 are on target to be significantly higher than H1 2018.
Mark Posniak, managing director, Octane Capital commented:
“The number of refurb applications we’re receiving is going through the roof. With the current taxation regime squeezing margins, portfolio landlords are increasingly using refurb bridges to manufacture value out of their portfolios, whether through change of use or modernisation and refitting. PRS has changed the rules of the rental game and is forcing landlords to really raise the bar if they want to remain competitive with the new generation of more discriminating lifetime tenants.”