Keystone Property Finance has made its first move into the refurbishment lending market with the launch of a new refurb-to-let range, designed to provide a short-term funding solution for landlords upgrading properties before transitioning onto a longer-term fixed rate.
Responding to increasing broker and borrower demand, the new range enables landlords to carry out light refurbishments—such as installing new kitchens or converting standard dwellings into houses in multiple occupation (HMOs) for up to six occupants—before refinancing onto a fixed rate once the work is complete.
The initial refurb-to-let product offers loans from £100,000 with a maximum term of six months. To improve speed and efficiency, Keystone has streamlined the underwriting process for the light refurbishment phase and employs title insurance to accelerate legal proceedings and provide additional buyer protection.
Rates on the refurb-to-let loan start at 0.85%, with borrowing available up to 70% loan-to-value. Borrowers may choose to service the interest monthly or roll it up and repay it on exit.
Once refurbishment work is nearing completion, brokers can apply on behalf of clients for Keystone’s Refurb Exit Fixed Rate, which starts from 4.69%. Alternatively, the short-term loan can simply be redeemed. Clients choosing a fixed rate option can unlock additional borrowing and benefit from a free revaluation.
Brokers stand to earn a 1% procuration fee on the initial refurb-to-let product and an additional 0.55% if their clients move onto a Refurb Exit Fixed Rate product.
Elise Coole (pictured), managing director of Keystone Property Finance, said the new range was developed in direct response to market need.
“We’re excited to enter a new area of lending with the launch of our first-ever refurb-to-let range. Demand for this type of finance is soaring, as more landlords look to boost yields by converting properties into small HMOs or upgrading tired stock. Brokers told us they needed a product for exactly this reason – so we built one. We’ve designed the range to be fast, flexible and simple – with streamlined underwriting, the choice to roll up or service interest and a clear path to longer-term finance.”
She added: “With the addition of our updated Refurb Exit Fixed Rate range, landlords can also take advantage of further borrowing when they refinance the light refurbishment loan they have with us – all while benefiting from a smooth, end-to-end journey.
“Keystone now offers the full product lifecycle, from purchase and renovation through to competitive fixed rates and our innovative product transfer offering. We believe this gives us a unique proposition in the market and gives brokers and their clients another reason to give us a call.”
