CHL Mortgages launches buy-to-let refurbishment range
CHL Mortgages has introduced a buy-to-let refurbishment product range which is designed to help landlords improve the energy rating of their rental stock and/or improve the general condition of the property. The products offer the ability to release the costs of the refurbishment upon completion, without having to change product.
The refurbishment product range consists of three products: Light Refurbishment, Cosmetic Improvement and EPC Improvement. The first two products are designed to increase the future asset/rental value of the property, with the latter a Green Mortgage option which is specifically designed to improve the energy efficiency of the property.
The range is available to individuals and limited companies and is applicable on standard buy-to-let properties, small houses in multiple occupation (HMO) and small multi-unit freehold blocks (MUFBs) with five-year fixed rates starting from 4.41%. Lending will be calculated on the pre-works value with a retention held based upon the post-works estimated valuation.
The product range has a maximum 75% loan-to-value (pre and post works, which means landlords can release more if the value of the property has increased post works) and the maximum cost of work must not exceed 25% of the pre-work property value.
Light refurbishment – this product has been designed for works not requiring building regulation sign off and includes works that can be signed off under the Competent Person Scheme.
Examples of these works include:
- installation of a replacement kitchen
- installation of a replacement bathroom
- rewiring
- new hot water & heating systems
- installation of replacement doors & windows
- replacement roof coverings
EPC improvement product – is for landlords looking to improve the energy efficiency of their buy-to-let property to meet the UK governments’ proposal for existing rented properties to have a minimum EPC rating of C or higher from April 2025.
Examples of these works include:
- installation of replacement hot water & heating systems
- installation of new windows
- installation of new doors
- installation of insulation improvements
Cosmetic improvement product – designed for properties requiring cosmetic and minor improvement/repairs works, allowing the landlord to improve the condition of the property.
Examples of these works include:
- general painting, plastering & decorating
- installation of replacement floor coverings
- minor improvement works – such as replacement of internal doors
- updating fixtures and fittings
For all products the refurbishment works must be completed within three months of completion of the initial advance and landlords must supply a detailed schedule of the proposed works at application.
Ross Turrell, commercial director, CHL Mortgages commented: “This product range has been designed and developed in line with feedback received from our intermediary partners and a growing number of their landlord clients who are looking for a product which offers a single, one-stop solution which removes uncertainty around funding refurbishment supported by a simple process.
This alternative Green Mortgage product is more than a simple pricing play and provides an additional and viable option to alternative forms of finance such as ‘bridging’ and ‘refurb in term’ solutions whilst helping to reduce administrative burdens and save on multiple inspection and legal fees. Our extensive and highly knowledgeable BDM team will play a key role in supporting our intermediary partners to help them explain the options we can now provide that will make a real difference for their landlord clients.”
* The full range of fixed rate options are as follows:
| Applicant & property type | Refurbishment Product | Product Description |
| Individual and Limited Company | Cosmetic Improvement | 75% LTV 5 year fixed initial rate 4.41% with 2% fee |
| Individual and Limited Company | EPC Improvement | 75% LTV 5 year fixed initial rate 4.61% with 2.5% fee |
| Individual and Limited Company | Light Refurbishment | 75% LTV 5 year fixed initial rate 4.76% with 2.5% fee |
| Small HMO/MUFB | Cosmetic Improvement | 75% LTV 5 year fixed initial rate 4.6% with 2% fee |
| Small HMO/MUFB | EPC Improvement | 75% LTV 5 year fixed initial rate 4.8% with 2.5% fee |
| Small HMO/MUFB | Light Refurbishment | 75% LTV 5 year fixed initial rate 4.95% with 2.5% fee |
