Well summer's gone, autumn’s here, and our lass has just become a football widow, again!! Only nine months love, “you know it makes sense”.

  Let's start on a positive note, shall we... we’re all aware of the current situation residential lenders have gotten themselves into, whereby they won't allow mortgages on property where the property hasn't been held in ownership for six months by the applicant.   We may all also remember the golden years of daylight bridging, well that coffin is firmly nailed down, but Northern Rock have shone out like a lighthouse in a stormy rock strewn sea, there to offer some salvation to us brokers, perfect for when this situation crops up.   This week I had a referral call me to explain his dilemma, this guy had opted (some may say unwisely) to leave behind a £100,000+ salary as a post office manager to enter the world of property management, and all its glory and stories of untold riches. He'd probably been watching the luscious Lucy Alexander on Homes Under the Hammer, whatever, he'd made the move to this sparkling pastime.   Armed with a cash pot of just over £100,000 or so, he purchased three properties at auction, all three purchases used the option of bridging finance and cash input. The first property was purchased for £86,000 with a bridge of £60,711, the second for £59,500 with a bridge of £43,218 and the third for £90,000 with a bridge of £59,882. So all told he put in cash of £75,000 – approximately. He then spent a further £22,000 on refurbishing the three properties, so the total outlay is the region of just under £100,000 including costs. The balance of his savings was to live off until he either sold the properties at profit or refinanced with BTL mortgages and got them rented out.   However three months into these bridges, the monthly interest cost, running at about £2,600 per month, was fast eating away at his savings and worry was setting in. In a discussion with a friend of his,  which just happened to be one of my clients, he got referred to me and called me for guidance and a solution.   Enter Northern Rock; their product offers 70% of the original purchase price, plus 70% of the costs of refurbishment. So the bottom line is, after all costs and fees etcetera are taken off the gross profit, he will end up with just over £13,000 to replenish his fast disappearing cash pot. And, more importantly, the three lots of bridging finance will be redeemed – saving £2,600 per month – being replaced with three BTL mortgages totalling just over £800 per month, plus the accumulative rental income is just under £1,600 per month. Bottom line is this: he’s nearly £3,500 per month better off. Job's a good UN!! And the DIP's flew through as well, underwriting well underway already.   But I wouldn't be me without a little moan, would I? Northern Rock could perhaps consider adding one or two tracker rates to the product offering, as the fixed rates –  at between 5-6% – are a tad high, but they know that, but what they also know is that they have no competition at this time, other than one or two that have these 2.5 year products, which start with a  six-month bridge that reverts to a two-year mortgage, or of course going down the commercial BTL route with its arduous stress testing and other strict underwriting criteria. So Northern Rock are sitting pretty, and quite rightly so.   To contact Bob directly email him at [email protected]