From the elegant Georgian parades found in Bath and London, to the rows and rows of houses that were built for the rapidly growing urban population during the Victorian era, terraced properties have been a key feature of the country’s housing stock for nearly 400 years.

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Not surprisingly, terraces have been popular with landlords for a long time, too. Relatively cheap to buy compared with detached or semi-detached properties, and in plentiful supply, they’ve long been seen as the ideal starter property for investors looking to take their first step in the rental market. 

You’d be hard pushed to find many landlords without a terraced property in their portfolio. However, the drive to improve the energy efficiency of the UK’s housing stock might result in some landlords having second thoughts about purchasing one of these in the future. 

As I’m sure you’re already aware, the publication of the Clean Growth Strategy in 2017  set out the government’s ambition of ensuring as many homes as possible have an energy performance certificate (EPC) rating of C by 2035 . The government has gone even further when it comes to the private rented sector, proposing that the preferred policy scenario for new tenancies are achieved by April 2025, and for all tenancies from April 2028.  

Although the 2025 deadline is still a few years away, we’re already starting to see landlords rethinking their priorities. As many terraced properties are now decades’ old, it can often be difficult to bring them up to 21st century standards of thermal efficiency. This means there could be opportunities for investors willing to carry out improvement works to buy BMV properties at auction.

Traditionally, landlords have faced difficulty in securing finance to refurbish a property before letting it out, but bridging finance could provide the answer they’ve been looking for.

A bridging loan is a specialist, flexible, short-term borrowing option for those looking for a fast turnaround to meet tight transaction deadlines and can often be arranged in days, compared to weeks and sometimes months for a mortgage. As most auction houses usually require a successful bidder to pay a 10% deposit on the day and settle the balance within 28 days, a bridging loan could be the ideal way for investors to snap up a bargain, allowing them to purchase an under-value property quickly without having to be a cash buyer.

And for those landlords looking for an exit onto a BTL mortgage once the improvement work has been completed, refurbishment BTL brings together the flexibility of bridging finance with the surety of a long-term mortgage — providing the property meets the expected valuation following refurbishment.

The BTL market has undergone many transformations in recent years, and the government’s Clean Growth Strategy looks likely to result in further changes in the future. However, as one door closes, another one opens, and bridging finance could help those willing to adapt to the new landscape make the most of any new opportunities.