Property investment portfolio management

There are a number of different types of loan available for those who are managing a property investment portfolio in the UK and here is a guide for newcomers.

Buy-to-Let Mortgage

This is perhaps the most common form of borrowing for individual property investors in the UK.  Buy-to-let mortgages are for those who want to buy a property to rent out. Lenders will also look at potential rental income as a primary factor in determining how much to lend.

Lenders such as Alternative Bridging offer term loans to property investors. Our Alternative Term Loan is available from £250,000 to £2m up to 65% loan to value (LTV), for a term of up to five years and is designed to match cash-flow and minimise any possible financial risk.

Bridging Loans

These are short-term loans designed to bridge a gap in funding, often used by property investors to secure a property quickly or for properties that aren’t mortgageable in their current condition. Once the property is renovated, many investors will then refinance onto a more traditional buy-to-let mortgage or term loan. Bridging lenders will want to understand what the applicant’s plan is to pay off the loan – the ‘exit strategy’.

A bridging loan in the UK can be either regulated or non-regulated. The former is when the bridge loan is secured against a property that is currently or will be, occupied by the owner or a close family member. A non-regulated bridge loan is where the property the loan is secured against is held for commercial purposes.

The maximum term for a regulated bridging loan at Alternative Bridging Corporation is 12 months while unregulated loans can often last for 24 months.

Commercial Mortgages

If you’re buying commercial properties (like offices, shops, or industrial units), then a commercial mortgage can be the ideal product. The lending criteria, interest rates, and terms will be different from residential mortgages.

Development or Refurbishment Loans

For those looking to develop or extensively refurbish properties, there are specialist loans available.  These can cover the costs of both purchasing the land or property and the subsequent development costs. Alternative Bridging’s PartX product provides an exit strategy for developers by accelerating the sale of a property at its total value.  In addition, the owners of the part-exchange property can also sell their property at full value, completing their new home’s purchase without needing to wait for a buyer.

Auction Finance

Specifically designed for properties purchased at auction, where funds are often required in a much shorter timeframe than traditional property purchases.

At Alternative Bridging, our bridging loans are ideal for fast and flexible finance solutions, such as funding auction purchases.

Pre-agreed facility

Our Alternative Overdraft provides a flexible loan facility from £250,000 that can be drawn upon whenever required, avoiding delays and set-up charges each time a loan is needed or the paying of interest when the facility is dormant.

It provides the perfect overdraft for real estate, property auctions, site acquisitions or to fund work-in-progress. The loan term is up to 24 months and the maximum LTV is 70% for residential and commercial property. It can be secured by a first or second charge on a residential or commercial property.