The mortgage is funded by Newcastle Building Society and Preferred through Solent’s branded partnership vehicle, Trafalgar Homeloans.
It allows a broker’s client to raise the capital to take advantage of the discount and then refinance to the full value of the property.
Paul Robinson, CEO of Solent Mortgage Services, explained: “The main problem that small buy-to-let investors have when offered the opportunity to benefit from a builder wishing to sell a number of part-completed properties quickly at a discount, is to lay hands on sufficient capital to fund the transaction. As a result they tend to lose out to larger businesses with deeper pockets.
“However, with Solent’s Builders Gifted Deposit product, smaller investors can level the playing field. Assuming a 15 per cent discount on the true valuation (£85,000 on a value of £100,000), Newcastle will provide bridging finance for three months on the full discounted purchase price and at the end of that period Trafalgar will refinance the full £85,000 on a buy-to-let basis.”
Robinson added: “There is a fully-worked example on our website. This product really offers brokers an opportunity of putting a ground-breaking product in front of investors, which can give them real chances to take advantage of builder discounts.”
