Make the most of your secret sales force

There are many ways to increase your sales and profits. And you can do this without having to spend

There are many ways to increase your sales and profits. And you can do this without having to spend a fortune.

 

One example is to unleash your secret sales team. In fact it is so secret, you may not know it exists. This team is your clients.

In a world of lead generation, social media and online marketing in general, it is often easy to overlook that the most effective form of promotion remains the same as it has ever been – word-of-mouth. Your clients can act as your secret sales force.

It’s an old saying that a happy client tells about three people, whilst a dissatisfied one could tell up to a dozen.  Actually, today a happy client may not tell anyone, because companies have to work much harder to get word of mouth promotion. To do this, you need to delight your clients; satisfying their needs is no longer enough. You need to exceed their expectations, meaning that you must continually find ways to add value. If you delight and exceed expectations, then you’ll have an advocate who will tell others about you. If you meet expectations, or simply satisfy, then your client may be loyal, but won’t necessarily tell others.

Warning: If a client becomes dissatisfied, they could be telling hundreds of their friends about this on online forums, blogs and the likes of Twitter. So you need to keep on top of this and quite often you can turn dissatisfaction into delight.

To delight your clients, your employees are a vital ingredient.

When thinking about client loyalty, start with your employees. It has been shown that the more motivated the employees, the more likely it is that your profits will rise. A motivated workforce means lower staff turnover, which reduces cost and ensures your service levels remain high; a new team member could take up to six months to get into the flow, understand your culture and client needs. In fact, the key rule of client loyalty is, serve your employees first so they, in turn, can serve your customer – who then can bring more customers to your door.

So to recap…

Your clients are your secret sales force. To make the most out of this, you must delight them and exceed their expectations. To do this, your employees are vital and the more engaged your workforce, the more likely it is that your clients will become advocates, a great way of generating incremental business.

Jeff Knight is Head of Marketing for Pepper Homeloans.
Pepper Homeloans prides itself on a more common-sense approach to mortgage lending. By not using Credit Scoring, they can provide a sensible solution for your tricky residential and buy-to-let cases. This includes clients with a blip on their credit rating or those that are self-employed.

 

Get it right with Right to Buy!

The prospect of finding a Right to Buy (RTB) product can seem daunting for even the most experienced

The prospect of finding a Right to Buy (RTB) product can seem daunting for even the most experienced broker.

But an increasing number of tenants are utilising the scheme to turn their long term council properties into their homes. While the scheme has been seen as controversial in certain circles, it’s enabled clients on a lower income to access property and created a lot more opportunities for business.

Compared to the same quarter of last year, RTB purchases have increased by 21% in April to June.  Figures like this are a clear indicator of interest in the sector; but what is the RTB Scheme, how do clients qualify and how does specialist lending come into the picture? You have the Right to know…

What is the RTB scheme?

The RTB scheme is a government mortgage scheme that allows long term tenants of council properties to purchase them from the Local Authority /Housing Association at a discounted rate. Simply put, the council discounts a sum of money from the market value of the house, therefore reducing the deposit needed. In some cases a discount can mean that no deposit is needed at all.

The discount applied to the property depends on the amount of time that the client has been living at the property. The chart below highlights how the property type and time spent residing at that property can affect the discount available.

Years of residence Discount (House) Discount (Flat)
3 35% or up to £42,000 50% or up to £60,000
10 40% or up to  £48,000 60% or up to £72,000
20 50% or up to £60,000 70% or up to £84,000
30 60% or up to £72,000 70% or up to £84,000
40 + 70% or up to £84,000 70% or up to £84,000

 

How do I know if my client qualifies?

2015 saw a change to the eligibility criteria on RTB applications. Clients only have to be living as a public sector tenant in the council property for three years (instead of the original five). Bear in mind that this time period doesn’t have to be in the same property, but has to be continuous.

The Process

There are really only three stages to securing a RTB property.

ProcessRTB.jpg

Once you have the Section 125, you can apply for a mortgage or loan to cover the purchase.

RTB’s are similar to vanilla residentials

When boiled down to the bare bones of the transaction, a RTB mortgage is no different to a residential mortgage – in fact, a residential mortgage could be used to fund the purchase if the clients can provide a cash deposit.

Simple to do and incredibly lucrative, any savvy mortgage broker should be making an effort to break into this expanding market.

But specialist enough that you may need a hand

Until recently, only prime lenders entertained the thought of RTB, thus clients with adverse were rarely accepted on a RTB mortgage. As the appetite for these kind of deals has increased, more lenders are willing to offer products that cater for wider circumstances. Within the specialist lending market, products will cater to those looking to borrow the entire of the discounted purchase price (up to the maximum LTV) and will consider clients with a less than perfect credit score.

Being able to complete business for your buy to let clients requires knowledge, experience and access to products. This is where the team at Crystal really adds value, by working with you to complete more business for your clients.

If you have a RTB case that you’d like to discus, contact your local BDM and we’ll be happy to help!

 

Broker Basics: Financing a chain break

While it’s great to have a foot on the property ladder, how do you take the next step? If your

While it’s great to have a foot on the property ladder, how do you take the next step? If your client decides that they’d like to move and they have to work quickly, having to hold onto their current property could tie up equity that would be pivotal for their new purchase.

Without other finance options your client has two choices: Lose their new dream-home or break the property chain.

 

Loosely put, the property chain is when purchasing a new home depends on the success/completion of other transactions. This situation is pretty common for anyone looking to move home, whether it’s a young family needing to expand or elderly clients hoping to downsize and free up the property’s equity.  There could be many links in the chain, all of which need to align.

With even more mortgages being declined on the high street, it’s becoming harder to sell your property than ever before. Stricter criteria and increasing prices could leave your clients home on the market for a lot longer than they’d like. When these funds are the driving force behind getting your clients new property they may have to consider breaking the chain and temporarily financing the property with an alternative product.

Bridging finance in an ideal option for those looking to finance their dream home while trying to sell their original property. These multi-use products usually span 3 to 12 months.  Securing this kind of finance provides a breathing space that allows your client to secure their next property while giving them adequate time to find a buyer for their current one – without having to accept a lower price. The loan can be secured against the current property, intended property or a combination of both to achieve the required figure.

Bridge_Chain_Break.jpg

As with all bridging products, an exit route is needed. The balance of the bridging loan, rolled up interest, legals and any ERCs are paid off once the original property has been sold. From there, a mortgage can be taken out on the new residence if needed.

 

If your client is looking to break their property chain, then we could find a bridging loan to suit their circumstances. Get in touch with a BDM for your area below for more information:

Contact a BDM

 

5 changes to the PRA underwriting standards that your client needs to know

Last week, the Prudent Regulation Authority (PRA) announced its final decisions regarding the underw

Last week, the Prudent Regulation Authority (PRA) announced its final decisions regarding the underwriting of buy-to-let (BTL) mortgages. The changes come as another blow to landlords that are already feeling the pinch of this year’s stamp duty and taxation changes.

So what exactly do you and your clients need to know about the updated Underwriting Standards for the BTL market? These are our top 5 points to take away from the PRA report.

 

It’s a little more stressful…

While currently, most lenders stress BTL affordability using the rental income and looking for coverage at around 125% of 5%, the new rules surrounding affordability are a lot stricter. An interest base rate of 5.5% will be the new normal – completely unrelated to the bank of England base rate.

Affordability is changing…

The way that the affordability of a BTL product is calculated will be changing. 

As well as the standard stress test, lenders can look at personal income to see if the mortgage payments can be made.

Lenders are no longer allowed to take into consideration the equity in the property when calculating affordability, nor any future rise in property prices.

Looking at portfolios…

Under the new guidelines, a borrower with 4 or more mortgaged properties is classed as a portfolio landlord.

While that may sound like a pretty watertight definition, it’s up to firms to determine how to verify the number of mortgaged BTL properties that the landlord has. Clients may be asked to show their experience in the BTL market, as well their current portfolio and mortgages.

There are exemptions…

Underwriting standards aren’t changing for everything. Holiday lets and bridging loans are all exempt from the new underwriting standards as they are not looked after by the PRA.

The changes are happening quickly…

Despite protests from certain lenders, the PRA changes are happening sooner, rather than later.

The first phase of the stress test integration comes into effect at the start of the year (January 1st 2017), to be completed by September 30th of the same year.

 

This leaves clients that are looking to begin their journey into property management, or expand their current empire, in a tricky position – act now or be priced out of an already competitive market.

 

Jo Breeden, Managing Director of Crystal Specialist Finance, said: “For anyone with clients looking to get involved in the BTL market or grow the income that those properties can bring in, the next 3 months are key. Clients should look at securing funding now, to make the most of the competitive products that are in the marketplace, before the cost of a BTL property becomes prohibitive. While the appetite for rental properties is increasing, both due to lifestyle and circumstance, the PRA changes have the potential to cause a lull in the volume of BTL applications – perhaps not now, but in the long-term."

 

Do you think the PRA changes will change the amount of BTL cases you’ll see? Let us know in the comments section below!

 

Could Shared Ownership get your client on the property ladder?

The Government’s Help to Buy scheme has been hitting the headlines a lot over the past few mon

The Government’s Help to Buy scheme has been hitting the headlines a lot over the past few months, with first-time homebuyers finding it harder than ever to get onto the property ladder. A recent survey by Home Let revealed that 71% of tenants would prefer to own their own home rather than rent. So it’s imperative that the Government continue its commitment to delivering more affordable housing in the UK.

One way in which you could assist your clients in owning their own home is through Shared Ownership.

What is Shared Ownership?

Shared Ownership is an extension of the government supported Help to Buy scheme to assist prospective, first-time homebuyers get a foot on the property ladder. It offers an affordable way for some of your clients to buy a newly built or resale property that would have usually been outside of their price range, in an area that they really want to be in, at a price that they can afford. Something that they probably wouldn’t have been able to do without the option of the Shared Ownership scheme.

The scheme allows people to part-buy and part-rent a home. The homebuyer is able to purchase an initial share of the value of the property (between 25% and 75%), obtaining a mortgage for their share, and pay a subsidised rent on the remainder that they don’t own through a Housing Association. All Shared Ownership properties are always leasehold.

 

So who’s suitable?

Not everyone is eligible to purchase a home through Shared Ownership, so it’s important for you to recognise which of your clients would match the scheme criteria.

According to the Government website, you can buy a home through Shared Ownership if your household earns £80,000 per annum or less (with this increasing to £90,000 per annum or less within London), and that either:

  • You’re a first-time buyer;
  • You used to own a home, but can’t afford to buy one now; or,
  • You’re an existing shared owner.


The Shared Ownership scheme is aimed at people who don’t earn enough to buy a home outright. So if you have clients that are struggling to raise a large deposit, or have some savings but can’t commit to long-term mortgage repayments, then provide them with the option of a Shared Ownership home.

 

Homebuyers can also increase their shares in the property

Shared Ownership is a stepping stone for people to own their own home. The scheme will allow your client to buy what they can afford at the time of purchase, but they’ll also have the opportunity to (if they wish) buy additional shares in the property at a later date, as and when they can afford them, until they eventually own their home outright. This process is called ‘staircasing’.

Once the sale of the property is complete and the owner is in a position to buy greater shares in their home, they must first discuss their intentions with the Housing Association, along with their current lender or Financial Advisor when determining how much they wish to buy. The cost of the new share will depend on the valuation of the property at the time the owner intends to buy the share.

You should also make your client aware of…

In addition to the fees attached to a Shared Ownership mortgage (which vary between lenders), your client will still need to consider the costs involved when purchasing a property such as valuation and legal fees – exactly the same as if they were going through the process of purchasing a home outright.

Other costs that need to be taken into account when buying a Shared Ownership home include:

  • The Reservation Fee: These differ with each Housing Association, although it will typically be offset against the service charge account once the sale completes.
  • Advance Rent and Service Charge: As soon as the property purchase is complete, the first month’s rent and service charge will usually be payable.

You should advise your client to fully research and check all related fees with the Housing Provider before committing to the purchase.

Shared Ownership can open up the opportunities for those clients that want to purchase a house they want, in a location they want to reside in and at an affordable price. The combined cost of the mortgage on the share owned by the homebuyers and the monthly subsidised rent and service charge for the remaining share on the property can usually work out cheaper than if the client was to buy outright or privately rent.

Our comprehensive lender panel offers a large selection of products to cover a whole range of circumstances. Get in touch with one of our dedicated Business Development Manager’s today to discuss the products we have available for your clients looking at a Shared Ownership home.

Contact a BDM

Broker basics: How to fund an auction purchase

There are less than 4 months left for landlords to purchase property under the current, relaxed stre

There are less than 4 months left for landlords to purchase property under the current, relaxed stress tests on buy-to-let mortgages and other forms of portfolio finance.

If your landlord client is looking to expand their portfolio then now is the time, and a property auction can be an ideal place to find a bargain.

From the fall of the gavel, auction purchasers have 28 days to complete on the property in question, regardless of the price. The thrills and spills of the auction room are then carried into the financial sector, with buyers scrambling to secure funds before they lose their deposits.

With such a tight timeframe to get the ball rolling, it’s important that brokers understand how financing an auction purchase works.

As with any big financial decision, it's imperative that your clients have thought through the commitment of a new property – regardless of the level of work that has to be put into it. With this in mind, a reasonable upper spending limit should be set.

Fast funding

“Bridging” an auction purchase is one of the most traditional forms of finance for this transaction.

Usually spanning between 3 and 12 months, bridging loans are short-term financial products with a defined exit route, usually through sale or a long-term financial product such as a buy-to-let mortgage. Processing of these products is remarkably fast, with some lenders having funding available to draw down within just days of application.

Even if traditional lenders could provide funding on such a short timescale, the property criteria that they lend against is incredibly strict. This means that some auction properties will only be considered by specialist lenders, such as the ones we have on panel.

Building an investment

This year has seen a 150% increase in demand for HMOs. Thriving on the mobility of today’s students and young professionals, self-contained units with shared amenities are a great way to maximise the profit potential of a property.

Both residential and commercial units can be converted and let reasonably easily if the client has secured proper permission to do so. Unlike a buy-to-let, properties are subject to planning permission before conversion into individual units. A license is also required to operate an HMO.

Bridging finance can either be secured on the value of the property being purchased or against an existing portfolio/residence. If your client is looking at buying a property that needs a bit of TLC before it’s let or are looking to convert to an HMO, then it may be a better option to seek finance against a main residence or existing properties as more funds will be available in the short-term.


If you or your client are interested in learning about the HMO scene, we’ve put together a handy eGuide that is useful to both broker and client alike. Covering everything from finding to financing your next step in property, our comprehensive guide will ensure you have the knowledge to operate effectively.

Make 2016 the year of the landlord!
Get in touch with a Business Development Manager today to discuss how to secure funds after an auction purchase and the products that are available for your client.


Download your free HMO eGuide here

 

#WorkshopTour visited the capital!

Event: Specialist Lending Market Overview WorkshopLocation: Council of Mortgage Lenders Office, Aldw

Event: Specialist Lending Market Overview Workshop
Location: Council of Mortgage Lenders Office, Aldwych, London
Date: Tuesday 26th July 2016 

Our highly anticipated London workshops took place this week.

Despite parking issues, we love visiting London - the financial hub of the UK. The brokers we work with here are amazing and it was great to meet a some of them in person. Hosting our event in the Council of Mortgage Lenders offices made it that little bit more special.

Crystals Specialist Finances’ close friend Roger Morris, Director of Sales for Precise Mortgages, came back to join our very own Managing Director, Jo Breeden, to talk all things Specialist Lending. As with our Tamworth workshops, we held both a morning and afternoon event highlighting Specialist Finance and its place in the marketplace, as well as April’s property tax changes and the options for Limited Company ownership.

The workshop provided an overview of the specialist lending market, with a large focus on buy-to-let and the implications of April's property tax changes, all bought to life with real-world examples. In addition, brokers had the opportunity to discuss cases that they have come across and, with the guidance of our experts, found the best solutions.

If you'd like to learn more on the recent UK tax changes and how they will affect property professionals, then download our useful eGuide here.

After the presentations, there was ample time for cases, questions, and of course, tea and biscuits!

We’re heading north for winter!

After a short summer break, the specialist lending Workshop Tour is heading north! If you’re interested in booking a place at our workshops in Manchester (6th October), Newcastle (27th October), Leeds (8th November) or Glasgow (17th November) then register your free place below.

Register here

 

Houses in Multiple Occupation (HMOs) – An essential guide

A House in Multiple Occupation (HMO) is defined by the Government as: “A property rented out b

A House in Multiple Occupation (HMO) is defined by the Government as:

“A property rented out by at least 3 people who are not from 1 ‘household’ (e.g. a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.”

But what is a ‘household’?

For the purposes of the Housing Act 2004, a ‘household’ is expressed as members of the same family living together. This can include married or a residing couple, relatives that live together which also includes half-relatives and any domestic staff that they have working for them.

Domestic staff are included when living in accommodation provided by their employer and paying no rent.

What is the difference between an ‘HMO’ and a ‘Large HMO’?

A property is an ‘HMO’ if at least three tenants live there, forming more than one household. These tenants must share facilities such as a kitchen or bathroom between households. 

Properties can also be classed as a Large HMO if more than five tenants occupy a property of at least three storeys, creating more than one household. As above, all tenants must share facilities with other tenants.

Is a block of flats classed as an HMO?

The Housing Act 2004 details certain types of properties that would not be classed as an HMO (although these will still be subject to the Housing, Health and Safety Rating System [HHSRS] regime), and a purpose built block of flats is not an HMO.

Special provisions are made for converted flats. A block of purpose built flats do not form an HMO as a block. However, individual self-contained flats within the block can still fall within the HMO definition (whether purpose built or converted) if it is let to three or more tenants, and at least one of them is unrelated. With this in mind, the flat will not be subject to ‘mandatory licensing’ unless the local council has introduced an ‘additional HMO licensing’ scheme.

Keen to know more?

We've created an essential short guide to HMOs that includes:

  • What is an HMO?

  • Obtaining an HMO licence and what is included in the licence

  • What funding options are available for your client, including: licensed HMOs, multi-lets and converting a property into an HMO

  • The top 10 things to consider before purchasing and operating an HMO

 

Download your free HMO eGuide here

 

The Changing Face of Bridging Finance

Bridging Finance has long been thought of as an undesirable quick fix financial solution. Traditiona

Bridging Finance has long been thought of as an undesirable quick fix financial solution. Traditionally undertaken as a last resort to ‘bridge the gap’ between a property transaction deadline and the main line of credit being secured, Bridging Finance used to be a dirty word.


However, times are changing, as they are now part of everyday financial options. Bridging loans have been growing in popularity for the past number of years as its application diversifies.

What is a bridging loan?

Bridging Finance is a short-term funding option, which can generally be arranged quicker than a conventional mortgage. Available to both individuals and businesses for almost any purpose, a bridging loan can be used until long-term funding is acquired (refinance) or upon the sale of a property. This source of funding can also be secured on properties that may not be eligible for traditional mortgage finance.

When could Bridging Finance be the solution?

Clients looking for a bridging loan can use them for a variety of purposes including:

  • Auction purchases – auction houses require quick completions for property purchases, so the client can usually rely on the speed of a specialist bridging lender to promptly secure funding for the initial deposit percentage and remaining amount.
  • Chain break when a client is involved in a property chain that has fallen through due to one member of the chain withdrawing, bridging finance can be used to salvage the rest of the chain and enable them to still progress with the purchase of their new property.
  • Capital raise – using existing land or property as security against a bridging loan (by way of a First or Second Charge), the client can raise capital for almost any loan purpose in a short timeframe.
  • Fast property purchase – many landlords/investors are progressively using short-term finance to quickly turnaround transactions. Securing a bridging loan in a matter of days can make all the difference for purchasers to act quickly when finding a suitable property.


Property professionals, landlords, investors and developers make up the bulk of those utilising bridging loans as a practical solution for raising capital quickly for many different situations. Increasing numbers of borrowers are greatly appreciating the flexibility that Bridging Finance presents them to benefit their property transactions and their businesses.

Both residential and commercial properties can benefit from a quick cash injection using this fast, flexible and secured funding option.

Combining speed with flexibility, a Bridging Loan can be used to fund a plethora of situations – typically assisting in portfolio growth, property acquisition, conversion and development. They can be vital in facilitating a property purchase that otherwise would not be possible.

With Bridging Finance being a short-term loan (usually 18 months or less), rates are generally expressed as the rate per month; meaning that it can work out more expensive than long-term finance options. Therefore, it’s important that your client has a clearly defined exit strategy in place when taking out a bridging loan – a key area for specialist bridging lenders when assessing cases.

A Change in Landscape

Use in Bridge to Let…

The buy-to-let market is increasingly turning to Bridging Finance in order to develop both new and existing portfolios.

Clients that are looking to purchase property in need of renovation at a steal (usually at auction) will need an extra boost to their cash flow in order to make the building habitable for tenants. In these circumstances, Bridging Finance enables investors to buy an un-mortgageable property and renovate the interior of the property quickly prior to letting and securing long-term funding on a buy-to-let mortgage; thus increasing yield.

With the impending PRA changes, landlords could stand to see a serious turn on investment in properties purchased this year, despite the April tax changes.

Download your free UK Tax Changes eGuide here
Use to fund stage development…

There is also a growing interest in Bridging Finance being used to aid development loans. Development loans are released in stages, based on building criteria agreed within each loan’s terms.

So where do bridging loans come into this?

Bridging loans are at the heart of what property developers use to finance their projects. Using Bridging Finance for their development projects enables your client to release funds from increased equity whilst refurbished properties are refinanced or sold, so that they can move onto another project.

Gaining planning permission is paramount when your client is considering a development project, however securing this can be a long and arduous task. Bridging Finance can provide your customer with a quick, short-term solution to secure the planning permission they need against the land or property. As soon as this is obtained, the land or property instantly increases in value; giving your client the option to sell the land or property at a profit without having to carry out any refurbishment works.

If your client is a property developer or investor, then you may be wondering whether a bridging loan or development finance is best suited. It fundamentally all comes down to how extensive the project will be. To distinguish what type of finance your client requires for their circumstances, it’s useful to see which of the below groups their project fits within:
 

  • Light refurbishment – no planning permission or building regulations are required and no change to the overall use of the property. It includes aesthetic rather than structural changes i.e. new kitchen, rewiring, decorating, new windows.
  • Heavy refurbishment or renovations – in addition to aesthetic changes, this would include structural work where planning permission and building regulations are necessary i.e. moving internal walls, adding an extension, loft conversion.
  • Ground-up development – involving the most work, this is usually starting with a plot of land to build upon or a very heavy refurbishment or conversion (where nothing remains other than stonework).


Bridging finance can be secured for clients with projects fitting within the above ‘light refurbishment’ and ‘heavy refurbishment/renovations’ categories. Your clients can use short-term funding to get the necessary work done for the property to be in a mortgageable/ lettable state, after which they can choose to sell the property or refinance and move to a buy-to-let mortgage. A huge plus point with a Bridge to Let is that it allows property investors to withdraw capital on the completed project, freeing them to invest in their next project.


If your client’s project fits in with the third ‘ground-up development’ category above, then their circumstances would align more with development finance, not a bridge.

You may also have some clients that require finance to purchase a single dwelling property with the aim of converting it into an HMO (House in Multiple Occupation). In these specialist cases, their main funding option will be Bridging Finance - due to the quick turnaround required to transform the property (with the necessary refurbishment works) into single accommodation units with shared facilities and communal areas.

If you have a landlord looking to venture into the HMO market or an experienced investor looking to expand their property portfolio with an HMO, then Crystal Specialist Finance can help! We've compiled your essential go-to eGuide for everything you need to know about advis

Bridging Finance has long been thought of as an undesirable quick fix financial solution. Traditionally undertaken as a last resort to ‘bridge the gap’ between a property transaction deadline and the main line of credit being secured, Bridging Finance used to be a dirty word.


However, times are changing, as they are now part of everyday financial options. Bridging loans have been growing in popularity for the past number of years as its application diversifies.

What is a bridging loan?

Bridging Finance is a short-term funding option, which can generally be arranged quicker than a conventional mortgage. Available to both individuals and businesses for almost any purpose, a bridging loan can be used until long-term funding is acquired (refinance) or upon the sale of a property. This source of funding can also be secured on properties that may not be eligible for traditional mortgage finance.

When could Bridging Finance be the solution?

Clients looking for a bridging loan can use them for a variety of purposes including:

  • Auction purchases – auction houses require quick completions for property purchases, so the client can usually rely on the speed of a specialist bridging lender to promptly secure funding for the initial deposit percentage and remaining amount.
  • Chain break – when a client is involved in a property chain that has fallen through due to one member of the chain withdrawing, bridging finance can be used to salvage the rest of the chain and enable them to still progress with the purchase of their new property.
  • Capital raise – using existing land or property as security against a bridging loan (by way of a First or Second Charge), the client can raise capital for almost any loan purpose in a short timeframe.
  • Fast property purchase – many landlords/investors are progressively using short-term finance to quickly turnaround transactions. Securing a bridging loan in a matter of days can make all the difference for purchasers to act quickly when finding a suitable property.


Property professionals, landlords, investors and developers make up the bulk of those utilising bridging loans as a practical solution for raising capital quickly for many different situations. Increasing numbers of borrowers are greatly appreciating the flexibility that Bridging Finance presents them to benefit their property transactions and their businesses.

Both residential and commercial properties can benefit from a quick cash injection using this fast, flexible and secured funding option.

Combining speed with flexibility, a Bridging Loan can be used to fund a plethora of situations – typically assisting in portfolio growth, property acquisition, conversion and development. They can be vital in facilitating a property purchase that otherwise would not be possible.

With Bridging Finance being a short-term loan (usually 18 months or less), rates are generally expressed as the rate per month; meaning that it can work out more expensive than long-term finance options. Therefore, it’s important that your client has a clearly defined exit strategy in place when taking out a bridging loan – a key area for specialist bridging lenders when assessing cases.

A Change in Landscape

Use in Bridge to Let…

The buy-to-let market is increasingly turning to Bridging Finance in order to develop both new and existing portfolios.

Clients that are looking to purchase property in need of renovation at a steal (usually at auction) will need an extra boost to their cash flow in order to make the building habitable for tenants. In these circumstances, Bridging Finance enables investors to buy an un-mortgageable property and renovate the interior of the property quickly prior to letting and securing long-term funding on a buy-to-let mortgage; thus increasing yield.

With the impending PRA changes, landlords could stand to see a serious turn on investment in properties purchased this year, despite the April tax changes.

Download your free UK Tax Changes eGuide here
Use to fund stage development…

There is also a growing interest in Bridging Finance being used to aid development loans. Development loans are released in stages, based on building criteria agreed within each loan’s terms.

So where do bridging loans come into this?

Bridging loans are at the heart of what property developers use to finance their projects. Using Bridging Finance for their development projects enables your client to release funds from increased equity whilst refurbished properties are refinanced or sold, so that they can move onto another project.

Gaining planning permission is paramount when your client is considering a development project, however securing this can be a long and arduous task. Bridging Finance can provide your customer with a quick, short-term solution to secure the planning permission they need against the land or property. As soon as this is obtained, the land or property instantly increases in value; giving your client the option to sell the land or property at a profit without having to carry out any refurbishment works.

If your client is a property developer or investor, then you may be wondering whether a bridging loan or development finance is best suited. It fundamentally all comes down to how extensive the project will be. To distinguish what type of finance your client requires for their circumstances, it’s useful to see which of the below groups their project fits within:
 

  • Light refurbishment – no planning permission or building regulations are required and no change to the overall use of the property. It includes aesthetic rather than structural changes i.e. new kitchen, rewiring, decorating, new windows.
  • Heavy refurbishment or renovations – in addition to aesthetic changes, this would include structural work where planning permission and building regulations are necessary i.e. moving internal walls, adding an extension, loft conversion.
  • Ground-up development – involving the most work, this is usually starting with a plot of land to build upon or a very heavy refurbishment or conversion (where nothing remains other than stonework).


Bridging finance can be secured for clients with projects fitting within the above ‘light refurbishment’ and ‘heavy refurbishment/renovations’ categories. Your clients can use short-term funding to get the necessary work done for the property to be in a mortgageable/ lettable state, after which they can choose to sell the property or refinance and move to a buy-to-let mortgage. A huge plus point with a Bridge to Let is that it allows property investors to withdraw capital on the completed project, freeing them to invest in their next project.


If your client’s project fits in with the third ‘ground-up development’ category above, then their circumstances would align more with development finance, not a bridge.

You may also have some clients that require finance to purchase a single dwelling property with the aim of converting it into an HMO (House in Multiple Occupation). In these specialist cases, their main funding option will be Bridging Finance - due to the quick turnaround required to transform the property (with the necessary refurbishment works) into single accommodation units with shared facilities and communal areas.

If you have a landlord looking to venture into the HMO market or an experienced investor looking to expand their property portfolio with an HMO, then Crystal Specialist Finance can help! We've compiled your essential go-to eGuide for everything you need to know about advising your clients on purchasing an HMO or converting a property into an HMO. Get your free copy by clicking the link below.

Download your free HMO eGuide here
So if you’re seeing an increase in bridging cases on your desk, you know where to turn! 

By aligning yourself with the recent tax changes and approaching PRA rules, then you’ll be in the best position to assist with placing your customers’ situation with the best product. Our product panel is comprehensive and covers a range of terms, circumstances and property types. So if you find yourself unsure of what funding option is best, then let us help you to find your client the perfect short-term finance solution

rty into an HMO. Get your free copy by clicking the link below.

Download your free HMO eGuide here
So if you’re seeing an increase in bridging cases on your desk, you know where to turn! 

By aligning yourself with the recent tax changes and approaching PRA rules, then you’ll be in the best position to assist with placing your customers’ situation with the best product. Our product panel is comprehensive and covers a range of terms, circumstances and property types. So if you find yourself unsure of what funding option is best, then let us help you to find your client the perfect short-term finance solution

Could 2016 be the year of the landlord?

While last quarters property tax changes may still loom over the heads of those in, or contemplating

While last quarter's property tax changes may still loom over the heads of those in, or contemplating getting into, the buy-to-let market; 2016 could actually be the year of the landlord.

Now is a great time for your client to expand their property portfolio. Given the recent changes to the property professional landscape, that statement could seem peculiar to some, but there is actually some pretty sound reasoning behind it.During a recent roundtable interview (July, 2016) between our very own Jo Breeden, leading representatives from lenders in the industry and chartered surveyors, the topic of buy-to-let mortgages was covered extensively. They discussed the generational divide between homeowners and this country’s shift to a more European rental-focussed housing trend. As life becomes more diverse and opportunities more varied, increasing numbers of young people are looking for flexibility in their lifestyles and therefore housing choices – something a mortgage can’t provide.

So, there is obviously a demand for landlords, but why should they be acting now?

January 2017 will be a pivotal point in the buy-to-let market. Affordability calculations are going to become more stringent under the planned changes from the Prudent Regulation Authority. Their reasoning behind the decision was to put a stunt on the market that has more than tripled in the past decade in order to reduce demand from investors; thus increasing the properties available for first-time buyers.

It shouldn’t come as a surprise, as high street lenders can be seen increasing their affordability testing since late 2015. Barclays was the first high street lender to introduce a 135% stress test amid fears that prospective property magnates wouldn’t be able to foot the bill.

This leads to one simple conclusion. Landlords should be releasing equity trapped in their property now and re-investing it before it becomes more difficult. Included in our product panel is a product that allows up to 75% LTV on properties under £15m.

Equity release now is particularly prudent for those living in London. Additional value gained over the past six years of growth is prime for re-investment; allowing landlords to invest in property outside the centre and truly capitalise on what they’ve already got! Stamp Duty changes have made investing into London a waste, if not nearly impossible, so landlords should be looking further north in order to maximise their yield potential.

Though refinancing doesn’t have to lead to more properties. Equity released from the properties currently in your clients’ portfolio could be used to finance their future development.

And while we’re maximising profit, let’s talk about Limited Companies!

Just between us, everyone leasing property in today’s market should be doing so under a Limited Company.

There are a lot of pro’s to owning multiple properties through a Limited Company, but the main draw for most landlords are the tax benefits. Rental profits from a Limited Company are taxed at 20% if landlords are earning under £300,000; compared to rates of up to 45% on a personal tax rate, without including charges incurred by capital gains. The switch from personal to a Limited Company means the landlord could also receive incorporation relief to further offset the corporation tax payable.
Make 2016 your client’s year!

If your client is looking to build a property portfolio, expand their existing investment property portfolio, or even capital raise to improve existing properties, then 2016 is their year! Our product panel is diverse and could help them access the funds they need to achieve their buy-to-let dreams. 

For more information regarding April's property tax changes, download our essential free eGuide below.
Download your free UK Tax Changes eGuide here

About Us

Crystal Specialist Finance is one of the most well respected and fastest growing finance distributors in the UK.

We offer specific expert advice, products, and award-winning service to brokers and networks across five core markets: Commercial Finance, Bridging Loans, Development Funding, Second Charge Loans and Specialist Mortgages.

Operating across England, Scotland and Wales, we have access to over 70 lenders, including exclusive lines.

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