It is quite common for buy to let landlords to buy property that requires a certain amount of refurbishment as they seek to buy a bargain. The downside of this is that lenders may be reluctant to lend whilst the property is only in a semi habitable state.
Using a bridging loan to buy this type of property enables the landlord to complete the purchase quickly, install tenants and then refinance later at their own pace. A refurbished property is worth a lot more than one that requires work, which means that when the landlord seeks long term funding the loan to value ratio is reduced thus enabling the landlord to obtain a lower mortgage rate. In some circumstances this can be a complex area especially as some lenders have rules relating to how long you have owned a Buy To Let property before they will consider refinancing. Our underwriters are experienced in dealing with these types of situations.