How do I raise finance?

The question that is asked all the time by property investors is - how do I raise the finance to begin?  If you are starting from the great perspective of having a good chunk of capital or you are able to release equity from a property to work with when you begin to buy property; then that is great. 

It makes the process much easier as it gives you the confidence to know that any offer you make is backed up by funds in the bank and therefore offers you greater bargaining power.  Coupled with the right knowledge and guidance, it also means that you can start your search sooner rather than later and get going on your chosen strategy.

Raising Finance

If you are trying to raise finance, then it would be a good idea to check your credit rating and mortgage status.  Speaking to a mortgage broker who specialises in lending for investment purposes about your ability to raise a mortgage would be a good place to start to see if you’re at least in the running in this sense. 

Regarding raising finance for the deposit or to buy outright, this can be a tricky subject.  There are a number of ways in which you could pull money together and we have listed them below:

  • Credit Card (short term)
  • Borrow money from relatives or very close friends
  • Borrow money (in the form of a loan) from friends or acquaintances
  • Raise Bridging Finance (in a number of different ways)
  • Bank Loan
  • Angel Investor/High Net Worth Individual/Sophisticated Investor
  • Vendor Finance (in certain circumstances)

 Check out our commercial finance and our mortgage section for more information on raising finance. 

The great divide

  HMRC figures show that many savers are still at risk of wasting the tax benefits of their ISA allowance.There is no doubt that ISAs have been a big success in helping foster the UK’s savings habit. A new report from HMRC¹ reveals that the market value of all ISA holdings is now around £518 billion, a testament to the popularity of the scheme, which is estimated to have cost the Exchequer £2.6 billion in tax relief last tax year.Encouraged by the government’s move to raise the annual ISA allowance by nearly 50% over the last five years, the average subscription in the 2015/16 tax year rose to a record high of £6,338. Overall, around £80 billion was subscribed to ISAs last year, an increase of £1 billion on 2014/15.Yet the figures also reveal that the majority of ISA savers are not making the most of the long-term tax-saving and...
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Calling UK Landlords: How to Get Prepared for Tax Relief Changes

As you may already know, there have been a lot of reports published by the press showing how young people in the UK are struggling to get onto the property ladder. In fact, they have been labelled as “generation rent”. Arguably, this is due to savvy investors choosing to make a good living through buy-to-let mortgages. To be more specific, a greater demand for properties drives up house prices and rent in certain areas. As a result, the government have decided to make a set of changes to tax relief. Arguably, this is a thinly veiled attempt to reduce the attractiveness of the buy-to-let investment strategy, thereby allowing more people to jump onto the property ladder. Depending on your investment strategy and financial strategy these changes could affect you. Let’s delve into the tax relief changes, and how you can use the information to gain a legal advantage. Notably, the...
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Diminishing Returns

  HMRC figures show that many savers are still at risk of wasting the tax benefits of their ISA allowance.There is no doubt that ISAs have been a big success in helping foster the UK’s savings habit. A new report from HMRC¹ reveals that the market value of all ISA holdings is now around £518 billion, a testament to the popularity of the scheme, which is estimated to have cost the Exchequer £2.6 billion in tax relief last tax year.Encouraged by the government’s move to raise the annual ISA allowance by nearly 50% over the last five years, the average subscription in the 2015/16 tax year rose to a record high of £6,338. Overall, around £80 billion was subscribed to ISAs last year, an increase of £1 billion on 2014/15.Yet the figures also reveal that the majority of ISA savers are not making the most of the long-term tax-saving and...
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Buy To Let Tax Changes Within Section 24 Of The Finance Act

Landlords could be set to lose out on tens of thousands of pounds of income from their buy to let investments, starting next year when proposed tax changes come into force. Under Section 24 of the Finance Act - introduced by George Osborne in his Finance Bill last summer – landlords will be taxed on the turnover of their property, rather than just the profit. It applies to existing as well as future buy to lets but not to foreign landlords (since they are not taxed under the British system).  Tax to be fully operational by 2020 The government plans to phase in the new ruling on a sliding scale from April 6 next year so that landlords pay 25 per cent in the first year, 50 per cent for 2018 and 75 per cent the following year.  By 2020 the full 100 per cent tax bill will apply. This means...
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Stretching margins

  New data shows UK banks raised mortgage rates despite falling interest rates, making life harder for borrowers and savers alike.Shortly before the Bank of England pushed interest rates to a fresh 300-year low early last month, a number of UK lenders chose to raise their mortgage rates, leading many commentators to call into question the benefit of the central bank’s action. Banks’ customers now face a two-pronged challenge – a near-zero return on their savings, and an unnaturally high interest rate on their mortgage.This was not what the Bank of England had envisaged when it lowered rates – knowing that lower rates would hurt savers, it hoped that banks would pass on lower borrowing rates too, thereby providing a boost to economic activity and risk-taking.Recent research by Moneyfacts tells a different story, however, despite Bank of England governor Mark Carney saying that lenders had “no excuse” not to pass...
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