Media Hub | News | 2015

Property Professionals 'equity rich but options poor'.

says Research from Just Cashflow.

The key to unlocking billions of pounds in UK property professionals' portfolios is being provided by Just Cash Flow PLC at the NACFB Expo conference on 17th June.

Research by the lender has revealed that £70bn* has been added to buy-to-let equity over the last two years as house prices have risen 15% nationally over this period and a staggering 30% in London**.

Just Cashflow Director John Davies says," Our research shows property professionals are equity rich but options poor. This is because prior to the financial crisis many had the foresight to take out tracker mortgages around just 0.5% to 1% above Base Rate.

"Understandably, the last thing they want to do is unlock the equity in their portfolios by remortgaging as this would significantly increase their overall borrowing costs. This can be extremely frustrating as they are unable to use their equity to take on additional properties or improve their housing stock."

These frustrations have led to Just Cashflow introducing the PortfolioBuilder facility - Your flexible bridging solution up to £500,000 for established UK property businesses that own at least one or more commercial properties, which includes buy-to-lets.

The facility operates in one of two ways.

Firstly, as a replica of a normal bridging loan when a much larger amount of funds is required for a new purchase.

Secondly, as an exact replica to a normal bank overdraft which helps flatten out the peaks and troughs of late rental payments and can allow the release of funds to carry out repairs and improvements.

"Our key focus at the NACFB Expo ( Stand C11) is to introduce the PortfolioBuilder facility to Commercial Brokers. We believe it is a great way for them to approach existing and potential property professional customers with the key to unlocking the rapidly growing equity in their portfolios," adds John.

The major difference with Just Cashflow as a business lender and not a property lender is that diligence is based on how the business is being managed and who is managing it. This results in potential access to loans at significantly higher LTVs if security is taken over real assets, although this is only part of the lender's consideration when underwriting a case.

*Of the 4.500K privately rented properties in the UK (census2011) approximately 2/3 are owned by landlords making use of mortgage lending (NLA), - approx. 2.814m properties. Assuming a conservative 25% equity in the property (average B2L deposit) two years ago, based on average property values, equates to £41,978. Add to this the additional equity from house price rises (£25,136) = £67,114 equity. This totals a minimum of £188bn total equity, with the additional equity being £70bn.

**According to latest available data from Nationwide House Price Index. National house price rises = £167,912 (May 2013) to £193,048 (April 2015). London rises = £306,919 (end Q1 2013) to £408,780 (end Q1 2015).

Date Issued 11 June 2015.

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