Empty Properties

Empty Property Loan

If you have an empty property in Pendle, we can help you bring it back into use.

Who is the loan for?

If your property has been empty for more than 6 months, you can apply for an Empty Property Loan. It can help you to pay for essential repairs and renovations. It's a good way of getting help if you are struggling to get finance, or would like some help from the Council.

How does the loan process work?

  • We will lend you 80% of the money you need for repairs and improvement works. You can borrow between £1,000 and £15,000 depending on what work needs doing. You will have to pay the other 20%. You will have to show that you have this money when you make your application
  • We secure the loans as a legal charge against the empty property. This is like the security needed for a mortgage
  • The loan is for a maximum of 5 years, or sooner if you sell the property before the 5 years is up
  • You can make monthly repayments or lump sum repayments and you can choose what period you repay over
  • If you repay the loan within 3 years, we do not charge you any interest
  • After 3 years, we add 3.75% interest to the loan for each of the next 2 years
  • The loan must be repaid by the end of year 5. This can be a lump sum
  • If you sell the property, you have to repay the loan

The loan application process

If you are interested, you need to complete a loan application enquiry form. We will assess whether you are likely to qualify. If you are, we will contact you and arrange to visit the property.  

When we visit your property, we will inspect its condition. We will make a schedule of works that are necessary to make the property habitable again. We will be able to tell you roughly how much the work will cost.

When you receive your schedule, you will need to get 2 independent quotations for the work. The loan will be assessed on the lower of the quotations.

You do not have to use the contractor who has given the lower estimate, but your loan will still be based on the lower estimate. You will need to fund any shortfall yourself.

If you don't want to use either contractor, you will have to start the loan application process again.

We will lend you 80% of the total cost of the works. We will check that the work has been done properly, and then pay our share straight to the builder. You are responsible for finding the other 20%, and paying your share to the builder once the work is finished.

The loan is secured against the property, and we take a charge over it, which is registered at the Land Registry. Because of this, we recommend that you use a solicitor, although you don't have to if you don't want. You will have to pay any solicitor's fees yourself.

The loan agreement

Once you have confirmed that you want to go ahead with the loan, we will send you a Loan Agreement. You need to sign it and send it back, along with any direct debit or standing order repayment mandate if you are making regular payments.

The legal charge

We will send a copy of the loan agreement to our Legal Department and they will arrange with you for the legal charge document to be drawn up.

If you are using a solicitor, we will forward all the paperwork to them. If not, we will send it directly to you. It is important that you sign and return the legal charge as soon as possible. Work on your property cannot start until the document is signed and registered at the Land Registry.  

What happens after the legal charge is set up?

You will be able to tell your contractor to start work. You are responsible for managing the contractor throughout the project.

When all the work is done, we will inspect the property again to make sure everything has been done to a satisfactory standard. When we get the final invoice, we will pay the contractor the loan amount directly and you will pay your share.

We will send you a Completion Statement, confirming the amount of the loan, date of the legal charge, any repayment schedule, and the date the loan has to be paid back by.

You will then get a statement every year which tells you the outstanding balance, any repayments made, interest accrued and the action you need to take about future repayments.

What happens once the work is done?

Once the property has been improved, you might want to:

  • sell it and repay the loan in full
  • rent the property out and use your rental income to make regular loan repayments
  • live in the property

Remember, the loan has to be re-paid at the end of the 5 year term. And remember too, that the loan is for you to bring your property back into use as soon as possible after the work is completed. If you don't, we can ask you to pay the loan back in full.

How do I apply?

If you are interested in a loan, please complete our Empty Property Loan enquiry form.