Hodge has today made some changes to its Portfolio Buy to Let (PBTL) loans, including increasing its maximum LTV to 75%, as well as increasing the LTV for multi-unit freehold blocks (MUFB) for up to 15 units to 70%.
We’e also introduced a variable rate product which will have a rate of 3.25% over Bank of England base rate, offering an alternative to our five year fixed rate loan.
Mike Clifford, head of commercial propositions at Hodge, said: “Here at Hodge, we’re always keen to add to the flexibility of our products and develop them in line with what landlords and brokers are telling us.
“Our recent research into the market found that flexibility is key for landlords and brokers, with 40% of landlords saying that finding the correct mortgage is frustrating. We’ve listened to these concerns, and come up with some changes to our product range that will give landlords greater choice in how they shape their lending; making managing their property portfolios more straightforward.”
Mike added: “In particular, the variable rate PBTL option will give landlords the option to select a rate that will reduce their early repayment charges significantly in the early years of the loan, while the fixed rate option offers certainty over their interest costs – allowing them to select products that are right for them, depending on what their investment strategy is.”
Our portfolio buy-to-let loan is designed for landlords with four or more properties, looking for one loan which covers them all, offering a practical solution to help professional landlords stay organised, helping to keep things streamlined and flexible. You can read more about the portfolio buy-to-let products at Hodge here.
We’ve been helping professional landlords meet their residential property investment aspirations for years, and we’ve recently revamped our products so that we can offer the best support possible. From landlords with a small number of properties, to larger investors with more complex portfolios, we offer specialist loans to meet a range of ambitions.
Our team are running a webinar on 21st July at 11am, where we’d love to invite you to learn all about how Hodge can support landlords in the Portfolio Buy-to-Let market. We’ll cover:
- An introduction to Hodge: who we are and how we can work with you
- What our Portfolio Buy-to-Let loan is, who it’s for, and how it works
- The core benefits and features of our PBTL loan
- How to get started with Hodge – how it works from application to completion.
To register for the webinar, click here:
We look forward to seeing you there!
Our recent research showed that portfolio landlords put ‘environmentally friendly’ properties in their top three list of priorities when it comes to purchasing new homes. Being environmentally friendly doesn’t just help landlords contribute to a more sustainable future for everyone, but it can also save them money. A few tweaks around a property can cut unnecessary costs while making homes more eco-friendly. Here’s our guide on the key things landlords need to do to make an environmentally friendly difference to a property.
Every house must have an Energy Performance Certificate (EPC), and making improvements to this is the first thing for landlords to tackle. Energy Performance Certificates measure the energy efficiency of a property on a scale of A-G (with A the most effective and G the worst).
How does the EPC work?
The EPC is a legal requirement for a building to be sold, let, or constructed, and landlords need to get an up-to-date EPC every 10 years. In April 2018, the Minimum Energy Efficiency Standards (MEES) came into force. This required all rental properties of new tenancies and renewals to have a minimum EPC rating of ‘E’ or above. Then, in April 2020, it changed again, so that Minimum Energy Efficiency Standards applied to all existing tenancies – not just new ones or renewals.
The higher the energy efficiency is for a property, the more environmentally friendly it is. Sustainability is a hot topic for most people right now and there are many ways landlords can help improve their EPC rating to make their properties much more environmentally friendly.
1. Upgrade the lighting to LED
Let’s start with a simple fix. LED bulbs may cost more than traditional light bulbs, but that shouldn’t put people off using them. LED light bulbs tend to last much longer, so spending a little bit more initially will save money in the long run. LEDs are up to 80% more efficient, lasting longer and emitting more light.
Landlords can also improve eco-friendliness by installing smart lighting. Motion sensors trigger the lights when someone enters a space and then, after periods of inactivity, switch off. It’s also possible to switch smart lights off remotely, so you don’t need to worry about them being left on for hours if tenants have gone out.
2. Insulate the walls and roof
Loft insulation: All properties must have good quality insulation or energy bills will, quite literally, go through the roof. On average, it’s estimated 25% of a home’s heat is lost through the roof. It’s essential then for landlords to check what’s in situ, because insulating the loft or roof is a simple and effective way to reduce heat loss and reduce heating bills.
Loft insulation is effective for at least 40 years, so it’s well worth the investment. If there’s nothing installed, or the existing insulation is 150mm (6 inches) or less, then add another layer to bring it up to the recommended 270mm.
Cavity walls: According the Energy Saving Trust, homes built after 1920 generally have cavity constructed external walls, made of two “skins” separated by a hollow space, or cavity, between them. Cavity wall insulation fills the hollow space, keeping the heat in and saving you energy. Filling empty cavity walls with wall insulation could be a very cost-effective way to retain heat in the property and save on energy bills.
Around one third of the heat loss from most homes is through the walls, so cavity insulation could save you up to £160 a year in heating bills. In fact, according to figures from the Energy Saving Trust, cavity wall insulation could pay for itself within less than five years.
3. Invest in double glazing
Houses lose lots of heat through their windows and doors. In fact, it’s estimated that about 10% of a property’s heat escapes through glass. Energy-efficient double glazing can help reduce this.
Double glazing is basically two layers of glass with insulating gas trapped in between them, so that it acts not only as a shield against cold weather, but less heating is required too, which reduces the household bills – as well as helping the planet.
Other advantages of double glazing include noise reduction, increased security, a higher property value, less condensation, and less fading of objects close to windows and doors, as it reduces the amount of UV radiation that gets into the house.
Most importantly though, double glazing reduces energy consumption overall, making it much better for the environment.
4. Install an efficient boiler
The Energy Savings Trust estimates that heating accounts for about 55% of what you spend in a year on energy bills, so having an efficient boiler in a home makes a big difference.
Condensing boilers are the best eco-friendly option. Conventional boilers waste a lot of heat energy because they release hot gases through the ‘flue’. A condensing boiler, however, captures the wasted heat vapour and uses it to heat up water returning from the central heating system. It’s made more efficient by requiring less heat from the burner.
All new, modern boilers are now condensing boilers, and building regulations state that all boilers installed into new, domestic homes should be energy-efficient condensing boilers.
5. Get a smart meter
Smart meters record exactly how much gas and electricity is used by individual households and are a must for anyone looking to reduce their carbon footprint and decrease their energy bills. Smart meters accurately record the amount of energy used.
They can be programmed so that they only turn on at certain times of the day, and visible meters mean homeowners know exactly how much they are spending on what.
As part of a nationwide roll-out, every home in Britain should be offered a smart meter from their energy supplier by June 2025. Smart meters are part of the nation’s effort to create a smart grid, which is part of providing low-carbon, efficient and reliable energy to Britain’s households and installing one is a great step to making to improving the EPC of a property.
Making these improvements to a property’s EPC certificate will go a long way into making the property environmentally-friendly, as well as cutting costs that is being wasted on energy bills.
If you’re a professional landlord looking for a loan for your residential portfolio, our expert team would be happy to help support your investment ambitions. Take a look at our Portfolio Buy-to-Let and Specialised Residential Investment loans to find out more.
We’ve been helping professional landlords meet their residential property investment aspirations for years, and we’ve recently revamped our products so that we can offer the best support possible. From landlords with a small number of properties, to larger investors with more complex portfolios, we offer specialist loans to meet a range of ambitions. Here’s a guide to our two products – Portfolio Buy-to-Let and Specialised Residential Investment – explaining how they work, how they differ, and who they’re for.
What is the Portfolio Buy-to-Let loan?
We created our Portfolio Buy-to-Let product especially for professional landlords looking for one loan to house their entire residential property portfolio. It’s a practical solution to help professional landlords stay organised and perhaps release equity for further acquisitions.
Who is it for?
Our Portfolio Buy-to-Let loan could be for you if you’re a professional landlord, trading as either a Ltd Company, LLP, partnership, or sole trader.
It’s for landlords with residential portfolios made up of between four and 15 properties, looking for a loan of up to £5m, with an LTV of up to 70%. We offer a 10-year term and can accept small multi-unit blocks (up to four units) as part of the portfolio.
To make things easy, we’ve put together a portfolio and landlord checklist that you can use to cross reference criteria and suitability.
How does it work?
Our Portfolio Buy-to-Let loan is interest only, meaning you’ll make interest payments each month, and repay the full loan at the end of the term. When you apply for the loan, we’ll agree the amount you can borrow up front.
You’ll be given a dedicated Relationship Manager, so you’ll always be able to speak to someone who knows the details of your portfolio and understands your situation.
We understand that lots of our clients are active landlords, so, if you’d like to make any changes to your portfolio after completion, just get in touch with a proposal and we’ll work with you to try and find a solution .
What are the benefits?
Landlords tell us that there are two key benefits to our Portfolio Buy-to-Let loan:
- You can house your entire portfolio under one loan – keeping things simple and straightforward
- We’ll let you swap properties in and out of the portfolio as your ambitions grow and change – meaning you’ve got the flexibility to focus on what’s important.
Specialised Residential Investment
What is the Specialised Residential Investment loan?
Our Specialised Residential Investment loan is similar to our Portfolio Buy-to-Let loan, but works well for larger investors, or those with residential portfolios that are a little more complex.
Who is it for?
If you’re a professional investor, trading as either a Ltd Company, LLP, or sole trader, looking for a loan of up to £10m with an LTV of up to 65%, our Specialised Residential Investment loan could be for you.
We’ll look at portfolios with more than 15 properties, with no maximum portfolio size – making it great for larger investors with ambitions to grow. We can also support you with residential portfolios that’re a little out of the ordinary. We’ll consider multi-unit blocks, houses of multiple occupancy (up to 6 beds in a single property), and a little commercial mixed use (like a small shop).
How does it work?
We know you need a repayment plan that suits your business, and are happy to consider both interest only and repayment options. When you apply for the loan, we’ll agree the amount you can borrow up front, as well as agreeing on a monthly repayment plan and a strategy for final capital repayment if you opt for an interest only package.
You’ll be given a dedicated Relationship Manager, so you’ll always be able to speak to someone who knows the details of your portfolio and understands your situation.
If you need to borrow more money throughout, we can consider this under our ‘flexible amendments’ feature. On completion, you can get in touch with us to chat through your proposal, and we’ll look at ways we can work together to achieve your ambitions.
What are the benefits?
Our expert team have years’ of experience structuring complex residential investment loans, so we’re well placed to understand that each portfolio is different. We’ll work hard to make sure we really understand your goals, and how we can best support them.
When assessing your application, we’ll try to be as flexible as possible, looking at property quality, location, tenant covenant, and investor experience, as well as property type and sector.
How do I know which loan is right for me?
The best way to work out which loan is right for you is to review the criteria carefully, and speak to a trusted broker or financial advisor who’ll be able to guide your decision.
As a general rule, our Portfolio Buy-to-Let loan is suited to landlords with smaller, more straightforward portfolios, while our Specialised Residential Investment works for larger investors with a more complex mix of properties. You can find out a little more information on each loan here, as well as finding our contact details when you’re ready to get started:
If you have any questions or would like to find out any more information, you can also give us a call and speak to our experienced team, who’ll be happy to help run you through the way the different loans work in more detail.
As yet more material shortages affecting the construction industry hit the news this week, Gareth Davies, our Head of Development Finance, shares his thoughts on how developers – big and small – have been tackling the problem
Before the pandemic was even on the horizon, as Brexit loomed and started to take effect, the wider construction industry was conscious of the sheer volume of materials we import – and the impact potential delays and shortages might have on ongoing projects and developments.
So, when Covid hit and the UK went into the first lockdown, it wasn’t long before we started to see real shortages of materials throughout the supply chain. While many active construction sites were relatively quick to reopen, there was little clarity across Europe, and further afield, in respect of a road map to properly reopening supply markets. This left us in a fairly uncertain place in the development world. Projects were forced to pause, lenders tightened up their criteria, and developers became more cautious about starting new projects.
But, as we’ve worked through Covid, construction sites in the UK have increased in activity and have widely remained open throughout the second and third major lockdowns, resulting in increased activity across the residential development market. It undoubtedly remains a challenging market but we’re seeing more and more enquiries for development finance, with developers and investors cautiously optimistic about returning to building.
Outside of the development space, we’ve heard lots about the ‘accidental savers’ of lockdown, people who’ve found themselves with surplus cash as a result of international and domestic travel, hospitality and entertainment being closed. Clearly, lots of those have now started to invest in their own homes – having spent so much time there over the past 18 months – and are thinking about putting in a new bathroom or kitchen, repurposing accommodation, extending, or even just redecorating. This is exacerbated further by the explosion in house prices in some areas – where people may feel that it’s better to invest in their existing property, than to enter the process of buying a new home which can both be stressful, and, at the moment, requires the ability to move at lightening speed.
Demand for materials is high, not just in the UK but globally and the pressure on supply chains continues to have an impact on delivery. For both large scale building projects and developments, and small scale residential improvements that require just one or two contractors (or a brave attempt at DIY), being able to access the right materials is critical – and that’s where it requires some careful thinking, and ultimately, some tricky manoeuvring to plan ahead.
From conversations with our developer clients at Hodge, it’s clear that they’ve been monitoring the availability – and price! – of various materials for some time now, and adjusting plans accordingly. Lead times have frequently been extended, and, as simple economics would dictate when demand exceeds supply, prices rise. Just this week, the Construction Leadership Council has warned that cement, some electrical components, timber, steel, and paints are all in short supply.
Planning for the future has never been more important in development finance. It’s far more difficult now to make a last minute call to a supplier at short notice, as products that previously would’ve been available the next day, might now not even be available the next week, or even month.
For developers, big and small, to continue building successfully and to keep control of costs, managing the build programme, human resource, and supply chain is crucial – and building in space for future delays into project timelines and potential cost increases is sensible practice for the foreseeable future.
Hodge has joined the National Association of Commercial Finance Brokers as a Patron Lender
We’re delighted to announce that Hodge has joined the National Association of Commercial Finance Brokers (NACFB) as one of the organisation’s Patron Lenders.
The NACFB is a leading membership organisation, made up of over 2000 commercial finance brokers across the UK, dedicated to finding funding solutions for a broad range of clients.
As a Patron Lender, Hodge will work closely with the NACFB and its broker members, offering specialised residential investment, portfolio buy-to-let, and development finance solutions to professional investors, landlords, and developers.
Speaking about Hodge’s membership of the NACFB, Kevin Beevers, Managing Director for Commercial Lending at Hodge, said, ‘It’s a fantastic step for Hodge to become a part of an organisation like the NACFB. Having access to a strong network of brokers, with a diverse client base, will really help us to engage with landlords, investors, and developers up and down the country – developing our solutions and offerings in response to what our clients and brokers are telling us they need.’
‘We pride ourselves on taking a relationship-based approach with our clients – no matter how big or small the deal we’re working on – and work as flexibly as possible to help them achieve their ambitions. Becoming a Patron Lender of the NACFB will help us go from strength to strength at Hodge, and I’m looking forward to working together.’
Find out more on how Hodge can support your professional residential investment and development ambitions.
We created our portfolio buy-to-let product especially for professional landlords looking for one loan to house their entire residential property portfolio. It’s a practical solution to help professional landlords stay organised.
And, because we consider the whole portfolio, we can help to keep things streamlined and flexible. To find out more about how our Portfolio Buy-to-Let team could help you, or your clients, achieve their residential investment goals, take a look here.
Our Portfolio Buy-to-Let team have been busy supporting landlords on a wide variety of projects and investments over the last few months. Here’s a sample of some of the clients we’re proud to have helped recently.
Hodge has completed a development finance facility with Griffon Homes to fund the conversion of a former care home into nine spacious apartments in central Bristol
Working with developer Griffon Homes, Hodge has completed a deal for £1.1m, funding the conversion of a former care home into nine apartments in central Bristol – all with outdoor space and car parking.
Just 10 minutes from Bristol city centre by car, the development – located in Fishponds, a popular residential area – will consist of a mix of one, two and four bedroom flats, close to local amenities, schools, and public spaces, and priced affordably, suitable for first-time buyers and young professionals or families.
Griffon Homes is a new client for Hodge, a partnership made up of a collaboration between two experienced, well-known developers based in Bristol, Jon Morgan and Steve Storey.
Speaking about the deal, Senior Development Finance Manager Greg Pescott, said, ‘This is an exciting development in a popular residential area of Bristol, breathing new life into an old building and giving it a brand new purpose. Griffon Homes is a new client for Hodge, and we’re delighted to support them with their latest venture”.
Jon Morgan, of Griffon Homes, said, ‘This development finance funding from Hodge will allow us to develop nine, much-needed apartments in Fishponds, and we look forward to the project progressing with Hodge Bank.’
To find out more about Hodge Development Finance, click here.
Working with Beckingham Homes (Alton) Limited, Hodge has funded the development of five new build properties, on a site previously taken up by a disused furniture warehouse, in Hindhead, a popular commuter village in Surrey.
The development, which consists of two one bedroom flats, two two-bedroom semi-detached houses, and one two-bedroom bungalow, is in a well-connected location, within walking distance of local amenities, a short drive from both Hindhead and Grayshott, and just 50 minutes from London Waterloo by train.
Hodge is providing just under £1m in funding to Beckingham Homes, an experienced developer with extensive experience of development projects similar to this.
Speaking about the deal, Greg Pescott, Senior Development Finance Manager, said, ‘It’s great to work with Beckingham Homes on this latest deal. I’ve built a strong and trusted relationship with them over the years, and they’re an excellent partner for a project like this. The development itself is set to be a fantastic asset to a local community where housing demand is high. I look forward to watching it progress.’
Andrew Macleod, Director of Beckingham Homes, said, ‘We’re delighted to have Hodge fund our latest development project. We’ve worked with Greg in the past, and have always found his approach to be pragmatic and commercially-minded, while being as flexible as possible. We hope to work with Hodge again in future.’
For more information about how Hodge can support your Development Finance ambitions, take a look here.