How much will the work cost?
The total cost depends on what work is done. We agree both the work and the cost with you before anything is started so there are no unwelcome surprises.
How do you work with local authorities?
Local authorities are able to offer owners of empty homes a grant to help with the cost of bringing their property back into use. However, the cost of work required is usually significantly larger than the grant.
London Rebuilding Society provides top up funds in the form of a loan secured against the property. We also deliver all property services and provide end-to-end project management.
The improved home is then leased to the local authority for a specified period in order to house suitable applicants from the local housing waiting list.
The loan from London Rebuilding Society is repaid with the rental income from the property. After the loan is repaid, the rental income reverts to the homeowner.
What is the Empty Homes Fund loan?
The legal instrument used by London Rebuilding Society to secure its loan against a property is an Equitable Mortgage. This creates a charge on the property which (if applicable) will be secondary to any Legal Mortgages already secured against the property.
The Financial Services Authority (FSA) – now Financial Conduct Authority (FCA), deemed this type of loan not to be a regulated product. This may change in the future.
Our contracts and processes have been approved by the then Office of Fair Trading (OFT) in line with the Consumer Credit Act 1974, now the Financial Conduct Authority (FCA).
Can you give me an example?
|Cost of works|| £30,000
|Works management fee (10% of works cost)|| £3,000
|LRS fee (surveys, legal fees, etc) *|| £7,000
|Total cost to homeowner||£40,000
|less Empty Homes grant (50% of works cost)||£15,000
|Loan from LRS to homeowner||£25,000
The property is then assigned to the Local Authority for an agreed period. The loan from London Rebuilding Society is repaid from rental income, with interest charged at 6% APR.
|Rent per month||£750|
|less Managing agent fee (10%)||£75|
|Monthly payment to LRS||£675|
|Repayment period||3.5 years|
In this example, the loan from London Rebuilding Society would be repaid in three and a half years. After that, the homeowner keeps the rental income.
What does the London Rebuilding Society fee cover?
Our fee covers the following:
- Single dedicated contact for the homeowner throughout the length of the process
- End-to-end project management, which includes:
- Providing access to finance
- Due diligence and support with title issues
- Executing all legal documents in relation to the loan
- Managing the loan from beginning to end (repayment)
- Engaging a surveyor
- Access to our panel of approved building contractors
- Managing the building contract
- Managing the site agent
- Payment of the following standard costs:
Title search £4 Valuation £300
Who keeps the rental income once the loan has been repaid?