"As people gradually return to city life for work - even if only for three or four days a week - and hospitality reopens, then the allure of London will return."
Little wonder that Rightmove has reported the average number of days for a property to sell has dropped to a new record low at just 45 days. The best properties are going even more quickly, with a quarter of those that had a sale agreed in March spending less than a week on the market according to the property portal.
But there are always big regional differences when it comes to the housing market, and nowhere is that clearer than in London. The traditional draw of the capital has suffered of late. It’s not just the higher price of buying property in the city that has dented interest, particularly in smaller properties and flats, but the pandemic has had a big impact too.
After all, London may be an incredible place to live and work in normal times, but when everyone is told to work from home and all leisure pursuits, from pubs and bars to theatres and restaurants are closed, then the premium you pay for that London flat might not seem quite so enticing.
This presents an opportunity for investors however.
Some of the properties that have struggled to sell over the last year or so have been those flats which are in need of refurbishment. They aren’t quite up to the level of rival properties in the area, and as a result they have lost out even in the midst of the extraordinarily busy market we have at the moment.
But as people gradually return to city life for work - even if only for three or four days a week - and hospitality reopens, then the allure of London will return. That may explain why we are seeing strong interest from investors looking to snap up those properties which may be in need of a little love.
By making use of a dedicated refurbishment loan, the investor is able to get the funds not only to cover the purchase of the property itself but also to cover the improvement work necessary. Once that work is completed, they can put the property back on the market again, confident that it will stand out among rival homes and flats and deliver a profi whether they want to sell it on or hold it as a buy-to-let investment.
We know only too well from our discussions with brokers how strong the demand is from investors with refurb plans. It’s because of this that we have developed our new Fast & Flexible Refurb product, providing funding for investors from smaller projects at the £100,000 range to those with much bigger plans who require funds of as much as £3m.
The Fast & Flexible Refurb allows for up to 100% of the cost of works funded in arrears and can be used to finance renovations, extensions or even conversions. The product also allows for further advances, which can be considered for additional work without the need for a new facility – avoiding additional legal or other fees. This is particularly useful if new planning permissions are secured on the property during the course of the renovations.
It’s a perfect example of how important it is for lenders to recognise how the bridging market is moving, and to design products which adequately meet the needs of brokers and their clients. The bridging market is in a far healthier and competitive position today than just a few years ago, and that’s because of lenders taking a more innovative and proactive approach to product design.
However, designing products that serve a particular need is only one part of winning favour from brokers. It’s also vital for lenders to deliver the speed and service that property investors require, to ensure that funds are provided rapidly, allowing them to add to their portfolios without getting caught up in a bidding war for appropriate properties.
Markets like London may be a little slower than others at the moment, but investors need fast support from lenders in order to grasp the opportunities that present themselves.
