Do I need my own solicitor to arrange a revolving credit facility?

Do I need my own solicitor to arrange a revolving credit facility?

For active UK landlords and property investors, speed and flexibility are essential. When you need to fund a refurbishment, secure an auction property, or bridge a cash flow gap during a void period, having quick access to capital is a major advantage. A Buy-to-Let (BTL) revolving credit facility acts like a property overdraft, allowing you to draw down funds, repay them, and draw them down again without having to reapply each time.

However, because this is a secured financial product and not an unsecured business loan or credit card, the setup process involves legal formalities. If you are considering this type of funding, you might wonder: do i need my own solicitor to arrange a revolving credit facility?

This article explains why legal representation is generally required, how the legal process works for secured second-charge facilities, and what you should expect when setting one up.

Why a solicitor is required for a secured facility

Unlike unsecured personal loans or generic business overdrafts, a BTL revolving credit facility is secured as a second charge against your residential buy-to-let property. This means it sits directly behind your existing first-charge mortgage.

Because the lender is taking security over your physical asset, the legal transfer of rights must be officially registered. This is where solicitors become necessary. A qualified solicitor must oversee the transaction to protect both your interests and the lender’s interests. The legal process typically involves checking the title deeds of the property, confirming there are no restrictive covenants that would prevent the second charge, and registering the new charge with the HM Land Registry.

Your property may be at risk if repayments are not made. If you default on your payments, you could face legal action, repossession of the property, increased interest rates, and additional charges. Because the stakes are high, lenders will almost always insist that qualified legal professionals handle the paperwork.

Separate representation vs joint representation

When arranging a secured revolving credit facility, you generally have two choices regarding legal representation:

• Joint Representation: In many cases, the lender may allow the same solicitor to act for both you (the borrower) and them (the lender). This is often the most cost-effective and fastest route, as one legal firm handles all the paperwork, reducing administrative delays.
• Separate Representation: Some lenders require you to instruct your own independent solicitor, while they instruct their own legal team. Although this can increase the overall legal costs, it ensures that your solicitor is solely focused on protecting your legal and financial interests throughout the transaction.

Even if the lender offers joint representation, you may still choose to instruct your own solicitor. Having independent legal advice can help you fully understand the terms of the second charge and the specific risks associated with securing further debt against your investment portfolio.

How the legal setup process works

Setting up a secured BTL revolving credit facility follows a structured legal path. Here is what you can typically expect during the arrangement phase:

1. Initial application and broker review

First, you will work with an FCA-authorised broker, such as Promise Money (FCA Ref: 681423), to find a suitable lender. The broker will assess your portfolio, your existing first-charge mortgage terms, and your financial requirements. To help prepare your financial profile, you can review your credit file beforehand. Get your free credit search here. It’s free for 30 days and costs £14.99 per month thereafter if you don’t cancel it. You can cancel at anytime. (Ad)

2. Valuation and legal instruction

Once you select a lender, they will typically require a valuation of your BTL property to determine the available equity. Around this time, the legal work begins. The lender’s solicitors will send the legal pack to your solicitor, outlining the terms of the second charge.

3. Title checks and consent

Your solicitor will review the property’s title deeds. Crucially, they must also obtain consent from your existing first-charge mortgage lender. Because the revolving credit facility sits behind your main mortgage, the first-charge lender must formally agree to the second charge being registered.

4. Signing the deed and registration

Once consent is granted and all legal checks are complete, you will sign the legal charge deed. Your solicitor will return the executed documents to the lender’s legal team, who will then register the second charge at the Land Registry. Once complete, the facility is open, and you can typically draw down funds within 24 to 48 hours whenever you need them.

Comparing revolving credit to bridging finance and remortgaging

When UK property investors need to release equity for auction purchases, EPC upgrades, or refurbishments, they generally look at three options: remortgaging, bridging finance, or a secured revolving credit facility. Each has a different legal profile:

• Remortgaging: This process involves replacing your existing first mortgage entirely. It requires a full legal process, which can take several months, and may trigger expensive early repayment charges on your current mortgage.
• Bridging Finance: Bridging loans are short-term, one-off loans. They also require solicitors and legal registration. Bridging loans can be “open” (with no fixed repayment date, though usually limited to 12-24 months) or “closed” (with a clear, predetermined exit strategy, such as a confirmed sale). Most bridging loans roll up interest, meaning you do not make monthly payments, but you must repay the full balance at the end.
• Revolving Credit Facility: Like bridging, this requires a solicitor to set up the initial second charge. However, once the legal work is completed, the facility remains open. You do not need to instruct a solicitor or pay legal setup fees again when you want to draw down more funds. You only pay interest on the money you actually draw, making it highly cost-effective for ongoing portfolio management.

People also asked

What is a BTL revolving credit facility?

It is a secured second-charge financial product for UK landlords that acts like a property overdraft, allowing you to draw down, repay, and redraw funds against the equity in your buy-to-let property without reapplying.

How long does it take to set up the legal work for a revolving credit facility?

The initial setup, including property valuation and legal registration of the second charge, typically takes between three to six weeks, depending on how quickly your existing mortgage lender grants consent.

Can I use my local family solicitor for this process?

While you can often choose your own solicitor, lenders usually require them to have a minimum number of partners and specific experience in commercial property or secured lending transactions.

What happens to the legal charge when I repay the balance to zero?

The second charge remains registered against your property even if your balance is zero, which allows you to draw funds again in 24 to 48 hours. The charge is only removed if you formally close the facility.

Are solicitor fees expensive for a revolving credit facility?

Legal fees vary depending on the complexity of your property portfolio and whether you use joint or separate representation, but they are generally comparable to standard second-charge mortgage legal fees.

Next steps with Promise Money

If you are looking to expand your portfolio, fund a refurbishment, or secure funds for an upcoming property auction, a BTL revolving credit facility could offer the flexible liquidity you need. Because the legal setup only needs to be completed once, it provides a long-term, hassle-free alternative to repeated bridging loans or disruptive remortgaging.

To find out more about the rates, criteria, and legal requirements for this product, speak to the team at Promise Money. As an FCA-authorised broker, we can help guide you through the process from initial application to legal completion.

You can contact Promise Money today on 01902 585020 or visit our dedicated hub at promisemoney.co.uk/landlord-revolving-credit-100.