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Paragon building on Budget boost with refurb loan

Specialist lender Paragon Mortgages is launching a product which is aimed at maximising Chancellor Gordon Brown&#39s property tax incentives which featured in this month&#39s Budget.

The buy and refurbish to let mortgage is aimed at investors looking to bring dilapidated property back into residential use following the Government&#39s attempts to increase investment in neglected property and areas.

The Chancellor stated that the Government would offer a raft of incentives including stamp duty exemption on sales of property in disadvantaged areas and a reduction of VAT to 5 per cent on the cost of converting residential properties which have been empty for three years or more.

The new mortgage is available at up to 70 per cent loan to valuation and offers extra lump sums being made available as work on the property continues.

After a year of the loan being taken out, these development funds can be rolled into an ordinary buy to let mortgage on the best Paragon rate available.

The lender says its customers have expressed a need for a buy, develop and refurbish package to take advantage of the growth in the lettings market.

Managing director John Heron says: “Hopefully, this special package for investors in the private rented sector, together with new tax allowances and VAT rates, will bring more of the existing housing stock into use. We have taken a lead from the Government and are following its drive to improve the housing stock generally and the quality of the privately rented sector in particular.”

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