View more on these topics

Paragon offers refurbish and buy to let

Buy-to-let mortgage specialist Paragon Mortgages has designed its buy and refurbish to let mortgage in response to incentives for property renovation that were announced in the March 2001 budget.

The mortgage allows borrowers to buy run-down properties and develop them to let. The finance for development is granted up to 70 per cent of the original purchase price up to a maximum of £500,000. The interest rate will remain at four per cent above the Libor rate for up to twelve months. There are no early redemption penalties.

After refurbishment, the mortgage can be converted to any of Paragon&#39s buy-to-let mortgages, which are available for loans of up to 85 per cent of valuation of the refurbished property.

In this year&#39s budget, the Chancellor announced a series of measures to encourage landlords to develop run-down properties for residential use. Value added tax was reduced to five per cent for conversions and renovations in a number of circumstances and there will be 100 per cent capital allowances for the conversion of office space to residential dwellings. The Paragon mortgage could be useful for landlords who want to take advantage of these incentives.

According to Moneyfacts on March 26, 2001, there are no similar mortgages on the market. This means that Paragon has created a niche for itself in the buy to let market. However, it may be possible to negotiate a loan for property development with other existing buy-to-let lenders, which some borrowers could prefer to do.

.

Recommended

Corporate bond from Lincoln

Lincoln Unit Trust Managers is launching its first corporate bond fund, to be managed by Goldman Sachs Asset Management. The product is designed to provide investors with regular income but also offers the option of reinvesting for growth. There is an introductory initial charge of 0.25 per cent until April 30 compared with the standard […]

The new pension prizes

This year sees a number of major changes to pensions. Stakeholder is the dominant word in the new pension universe but the opportunities are not just limited to those provided by the launch of stakeholder. Here are 10 ideas that I believe IFAs would do well to exploit over the next few months. Pensions and […]

Big business &#39apathetic over stakeholder&#39

Big business in the UK remains apathetic and misinformed about stakeholder, according to research by consulting actuaries Punter Southall.The pensions experts surveyed pensions managers in the UK&#39s largest 250 companies earlier this year and revealed just 10 and 23 per cent of employers respectively believed they would be offering a stakeholder schemes to their contractors […]

Skandia adding to multi-manager range

Skandia is to add four funds to its life and pension multi-manager range, taking the total number of funds offered to 236 from 22 providers.The new funds, which will be offered from April 4, will include the range&#39s first zero-dividend preference share fund, Aberdeen&#39s progressive growth fund.This fund will also be added to Skandia&#39s multi-fund, […]

UK housebuilders remain a value trap – despite post-Brexit falls

By Mark Martin & Holly Cassell, Neptune UK Equities As investors continue to digest the UK electorate’s vote to leave the EU, Neptune’s Mark Martin and Holly Cassell explain why they believe housebuilders remain dangerously overvalued Click here to view full article Important information  Investment risks  Neptune funds may have a high historic volatility rating and […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment