Financing pre-63 properties

We have covered pre-63 properties in the past and talked about how many of them have very strong cash-flows.

The recent downside we’ve seen is that lenders shy away from financing them for several reasons, the first and foremost is down to them being a multi-unit that requires a professional landlord to manage and banks tend to be of the view that if you don’t have lots of property already that you won’t be up to the task (which spells future losses in their books).

The next thing is SI534 which is changing the building standards for rented accommodation, this legislative change means that many pre63’s are not up to scratch, which also means most of these properties require substantial retro-fitting.

This second hurdle means that even when financing the property that you have to prove the borrower can make payments while investing in the work that needs to be carried out, because roll-up accounts are a thing of the past (something developers used), it …

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