4 solutions for an unsold property: rent, redevelop, raise capital or re-assess

Refresh the property with a development loan
When a home isn’t selling, one option is to make it work harder by either making it better suited to your lifestyle, or more compelling to a future buyer. At Investec, we tailor development loans to the scale of the project, from minor renovations such as a new kitchen or bathroom, through to demolishing, restoring or rebuilding parts of a property. At the very top end, we offer self-build mortgages, where an owner constructs an entirely new dwelling.
For example, we helped an entrepreneur complete a £3 million renovation, converting an outbuilding into a guest annex and adding a swimming pool. We typically release funds in tranches on a variable rate, with variables like build delays, shifting materials costs and a less predictable rate environment. We’ll also look to cover the property beyond completion, so owners don’t have to reapply for a mortgage the moment the work is done.

Buy a new home while delaying a sale
A Home-Link mortgage is secured against both an existing home and a new target property. The borrowing on the existing property typically runs for up to two years, while the mortgage on the new home is offered over a longer term. There’s an expectation the original property will ultimately sell, but this gives owners the flexibility to choose their entry point rather than being forced to transact into a market where buyers are negotiating hard. Where the mortgage is on a variable-rate basis, no early repayment fees apply if the original home sells ahead of the agreed date.

Remortgage to unlock equity
Some clients would rather release equity from an existing property than proceed with an immediate sale and the risk of selling at a discount. This could provide capital to invest in a business, support family members, or simply keep options open.
We offer remortgages on buy-to-let and residential properties with personalised terms and will consider interest-only repayments and terms of up to 35 years. Structuring the borrowing appropriately remains an important consideration, particularly where there are multiple objectives to balance.

Convert your home to a buy-to-let
When a residential property is taking longer than expected to sell, another route is to remortgage it as a buy-to-let, freeing the owner to live elsewhere while retaining the asset. We recently helped a high-net-worth couple moving overseas remortgage their London home as a buy-to-let, on a competitive five-year interest-only basis.
When we assess buy-to-let, we look beyond the expected rental income and to wider wealth, for a more realistic view of what’s genuinely affordable. It may also be possible to obtain consent to let for up to two years on a property that already has a residential mortgage with us, in which case a private banker would look to switch the rate type without increasing the loan.