How bridge to let works
The strategy has three stages. First, a bridging loan funds the purchase, often quickly or at auction, of a property that a buy-to-let lender would not accept as it stands. Second, you carry out works and let the property. Third, a buy-to-let mortgage repays the bridge, ideally based on the higher value after the works.
The bridge is usually short, often six to twelve months, and the cost of bridging interest and fees is part of the investment. The strategy works best where the uplift in value, or the speed of purchase, more than covers that cost.
Lenders with their own buy-to-let route
Some bridging lenders also offer buy-to-let mortgages and make it easier to move from one to the other. On our panel, one lender offers a bridge-to-let option onto its own one or two year buy-to-let, and another offers free legal work and valuation if you refinance onto its own buy-to-let for standard properties.
A same-lender route can reduce costs and the risk of a gap at the exit, but it is not always the cheapest overall. We compare it with a standard bridge and a buy-to-let from another lender, so you can see the full cost of each path.
Planning the buy-to-let exit
The refinance is where bridge to let succeeds or fails. Points to check before you buy:
- Minimum ownership: many buy-to-let lenders want you to have owned the property for a period, often six months, before they lend on a new valuation rather than the price you paid
- Rental cover: the expected rent must cover the mortgage interest by the lender's ratio, which is usually stricter for higher-rate taxpayers and stressed at a notional rate
- Property type: HMOs, multi-unit blocks and flats above shops need lenders that accept them
- Your profile: first-time landlords, limited companies and portfolio landlords each have different lender options
Building in time for the works, letting, and the refinance itself, with some headroom, reduces the risk of needing to extend the bridge.
Arranging bridge to let
We compare bridging lenders on rate, loan to value, works funding and the exit, including those with their own buy-to-let route, then approach those that fit. Instant Quotes gives indicative figures as a starting point, and final terms depend on each lender's valuation and checks.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
