A new buy to let mortgage product aimed at investors looking to purchase or refinance properties in need of refurbishment has been launched by Mortgages for Business.

The Refurbishment Mortgage will, says the company, provide a one-stop-shop deal for this type of investor.

Loans will be based on up to 70 percent of the property value after refurbishment with a works retention at outset.

Rates will be set at five percent above base with a one percent loading during the refurbishment phase.

In the past property investors have been restricted by lenders who are unwilling to take a view on a property’s refurbished value. Once investors have gained initial finance they then have to repeat the process once refurbishment is complete – often doubling the administration costs.

David Whittaker, managing director of Mortgages for Business, said: “The Refurbishment Mortgage has been designed to make the process of investing in property in need of some renovation easier and more cost effective. Investors are suffering the burden of going through the loan process based on initial purchase price and paying all the costs associated with it.

“They then have to go through this again once the refurbishment is complete – often with a different lender who uses a different panel of valuers and conveyancers. This product – which is exclusive to us – will streamline that process and bring the total cost of financing these properties down.”

• The Council of Mortgage Lenders (CML) reports that the recently published Bank of England mortgage data confirms the likelihood that there may have been a ‘bunching’ of house purchase transactions in December to beat the stamp duty concession deadline.

The gross lending total of £13.4bn in December 2009 was in line with the CML's estimate (£13.5bn) and seems to confirm the CML's view that much activity was ‘rushed through’ to beat the stamp duty deadline. Gross lending totalled £143.5bn in 2009.

Net lending remains up from the near stagnation in the middle of the year. For 2009 as a whole net lending totalled £11.5 bn. This was the lowest level on record (back to 1987), but higher than the CML forecast of £8 bn. It was largely driven by the relative strength of house purchase activity, which picked up over the latter part of the year, and weak levels of repayments.

The CML says it has seen little if any evidence that households, in aggregate, are using low interest rates to pay down mortgage debt more quickly.

CML economist Paul Samter said: “These figures confirm that the mortgage market ended 2009 in much better shape than it started, but it still looks like a slow haul back to meaningful levels of activity.”