Bridging loans on uninhabitable properties are readily available from specialist lenders

Bridging loans on uninhabitable properties are readily available from specialist lenders, whereas standard buy-to-let mortgages require the property to be immediately lettable with a functioning kitchen and bathroom.

A critical barrier for investors buying heavy-refurbishment projects (such as repossession properties stripped of copper piping) is that high street banks will place a £0 retention on the mortgage. They require the property to have a functioning kitchen, an indoor bathroom, and be generally watertight and secure before they will release any funds.

Bridging lenders, however, are entirely comfortable with derelict or uninhabitable security. They lend based on the underlying value of the bricks and mortar and the viability of the borrower's refurbishment plan. The investor uses the bridging loan to acquire the property and make it habitable, and then swiftly refinances onto a traditional buy-to-let mortgage to repay the expensive bridging debt.