CHL deal welcomed with open arms

Ramesh Sharma

April 8, 2006

The CHL deal is aimed at landlords who want to purchase and then refurbish a property prior to letting it. The light refurbishment product is available up to 85 per cent LTV of the unimproved property’s purchase price.

Following this, the landlord has three months to refurbish the property, after which time up to 85 per cent LTV of the post-improved valuation is available. This is subject to 125 per cent rental cover and other buy-to-let criteria.

The light refurbishment product is available at Bank of Engand Base Rate (BBR) plus 1.15 per cent for the term of the loan, with a completion fee of 1.25 per cent, which can be added to the loan. There is a 5 per cent early repayment charge (ERC) on the range, until June 2009.

Commenting on its launch, Trevor Child, head of marketing at CHL, said: “We knew we would stir the market with this product and all of our predictions are coming true. Everyone is a winner and it gives landlords the opportunity to improve housing stock. We have been inundated with calls since its launch.”

Alan Lakey, senior partner at Highclere Financial Services, said the deal was an example of a lender taking the right approach. He said: “The Capital Home Loans latest buy-to-let offer is very interesting. I have had a few cases where clients have seen properties that they wanted to buy and renovate, but because of the state of the property they were unable to get a lender to loan on it. Everyone could see the potential of the property but the lender was still unwilling to budge. The CHL deal, which seems to be the only one of its kind on the market at the moment, means this wont happen. It’s good to see lenders taking a more flexible view.”

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