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Empty property loan


Contents

About the loan

We are suspending the processing of loan applications from 31 March 2024 to fully review our product and its ongoing suitability. Any enquiries or applications made  before this date will be reviewed and considered but we can not guarantee that a loan will be provided.

We offer short term, low interest loans for properties that have been empty or unused for at least six months.

The loans are to help with repairs, renovation or conversion to bring properties to the decent home standards, and the Cornwall Rental Standard.

Loans are available:

  • up to £60,000 are available for single dwellings
  • up to £210,000 where a project involves multiple units of accommodation

Properties that may benefit include:

  • existing single dwellings
  • single dwellings being sub-divided to create more units of accommodation
  • non-residential buildings which have achieved planning permission for the
  • creation of residential units
  • unused spaces in buildings such as above commercial premises

The more units of accommodation refurbished/created the greater the loan amount available.

Loans are secured by way of first or second legal charges on the empty/unused properties, or other properties which have sufficient equity.

Repaying the loan

There are no monthly repayments to make.

Loans are repaid in full on the sale of properties, or within 3 months of the completion of works if owners are retaining ownership.

Our loan information leaflet gives further information.

The policies enabling the recent changes to the loan are below;

Enquiry form

Submit an enquiry to see if you may be eligible for a loan:

Initial Enquiry form

Empty property details










Types of projects the loan can support

A property may have been purchased with the intention of refurbishment or conversion works, then selling or renting it out. Your personal circumstances may have changed. You may not be able to secure finance. You may not be able to afford monthly repayments associated with traditional loans. 
 
The Empty Property Loan is repaid in one lump sum on the sale of the property or within 3 months of completion of works. No monthly repayments needed. If there is enough equity in the property offered as security, then it is likely that a loan application will be successful. 

If your property has been on the market for sale for some time with little or no interest.  You've had feedback from your agent that buyers are being discouraged by the condition of the property. 
 
An empty property loan can be used to undertaken any works within the boundary of a property, including landscaping. It can be used for:
  • general repairs
  • renovation works
  • to fit new bathrooms and kitchens
  • general decorating
  • improving the external appearance of a property such as replacing windows. 
In this situation the aim of using the loan is to increase the chances of achieving a sale.  The loan is repaid on sale of the property.

You may have an existing mortgage or finance secured against the property but is has fallen into disrepair. You may have little or no equity. In this situation a property can not be used to secure the empty property loan. However, if you own other properties in Cornwall, with sufficient equity, these couold be used as security. The Council would place a legal charge on that property and the loan would be repaid on the sale or refinancing of the empty property.
 
A recent example of this is a large property in Newquay which was in negative equity.  The owner had been marketing the property for sale without success.  The owner lived in a property with a large amount of equity. The owner obtained planning permission to convert the empty property into 5 self-contained flats. We agreed to secure the legal charge on the owner’s own home.  The conversion went ahead using the empty property loan. The property value increased. There was enough equity, allowing the owner to get finance and repay the loan within 3 months of completion.  On repayment of the loan the Council removed its charge from the owner’s home.

You may have an existing mortgage or finance secured against the property but is has fallen into disrepair. You may have little or no equity. In this situation a property can not be used to secure the empty property loan. However, if you own other properties in Cornwall, with sufficient equity, these couold be used as security. The

Owners of large empty/unused properties creating a number of units of accommodation have the potential to access larger loan amounts.  There is no restriction on the type of property that can be assisted if owners have relevant full residential planning permission.

Some examples would be former office space, empty/unused space above shops, pubs, and former nursing homes.  On completion of works owners can either repay loans within 3 months or sell enough units of accommodation.  So, for example, if converting to 7 units then an owner could either refinance to retain ownership of all the properties or sell enough units to facilitate repayment of the loan whilst retaining the remainder. 

This may apply if:
  • You were a cash buyer
  • Inherited a property
and it is not possible to secure a mortgage to help with refurbishment works.  In these cases it may still be possible to secure an empty property loan. 
 
Examples might include:
  • if a property is suffering from mundic decay. The loan could be used to undertake necessary remedial works so that the property becomes mortgageable. 
  • properties of 'Cornish unit' construction. The loan could be used to undertake works to bring it up to mortgageable and habitable standards. 
 
This type of loan is sometimes referred to in the finance industry as a bridging loan. 

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