How Long Does the Legal Work Take When Setting Up a BTL Revolving Credit Facility?

How Long Does the Legal Work Take When Setting Up a BTL Revolving Credit Facility?

For busy UK landlords, timing is everything. Whether you are looking to secure a property at auction, fund a light refurbishment, or cover a sudden void period, having quick access to capital is essential. A Buy-to-Let (BTL) revolving credit facility from Promise Money works much like a property overdraft, allowing you to draw down funds, repay them, and draw them down again as needed. However, because this is a secured facility, it requires legal work to set up initially.

So, how long does the legal work take when setting up a BTL revolving credit facility? Generally, you can expect the initial legal setup to take between two to four weeks. This article will break down what happens during this period, why it is necessary, how it compares to alternative funding routes, and how you can help speed up the process.

Understanding the Legal Process for Secured Facilities

Unlike an unsecured personal or business loan, a BTL revolving credit facility is a secured financial product. It sits as a second charge behind your existing first-charge mortgage on your residential buy-to-let property. Because of this, lenders must perform essential legal due diligence to protect their investment and ensure everything complies with UK land law.

This legal work is handled by solicitors. They must verify your ownership of the property, check for any existing restrictions, and register the new second charge with HM Land Registry. While this initial process takes some time, the major benefit is that once it is set up, you can typically draw down funds within 24 to 48 hours without needing to go through the legal process again.

Step-by-Step Breakdown of the Legal Stages

To understand why the legal work takes two to four weeks, it is helpful to look at the steps your solicitor and the lender’s legal team must take:

• Instruction and Onboarding: Your solicitor is formally instructed and will perform standard identity checks, anti-money laundering (AML) verifications, and gather your initial property documents.
• Title Investigation: The legal team will review the title deeds of your buy-to-let property. They check for any covenants, restrictions, or easements that could affect the security.
• Obtaining Consent: Because the revolving credit facility is a second charge, the solicitor must contact your existing first-charge mortgage lender to obtain their consent. This step is often the most common cause of delays, as different lenders have varying processing times.
• Underwriting and Offer: The lender’s solicitors review the findings and draft the legal charge deeds and facility agreement for you to sign.
• Signing and Registration: Once you sign the documents, the solicitor registers the second charge. The facility is then officially live and ready for you to use.

How it Competes with Bridging Finance and Remortgaging

When property investors need to raise capital, they typically look at remortgaging or bridging finance. Here is how the setup time and legal process compare to a BTL revolving credit facility:

Remortgaging

Remortgaging to release equity from a property is a popular option, but it is rarely fast. The legal work and underwriting for a full remortgage typically take four to eight weeks, or even longer. Additionally, remortgaging means replacing your entire first-charge mortgage, which might trigger high early repayment charges if you are locked into a competitive fixed rate.

Bridging Finance

Bridging finance is designed for speed and can sometimes be arranged in one to three weeks. However, bridging loans are usually structured as single-use, short-term options. Landlords can choose between open bridging loans (which have no fixed repayment date but must usually be repaid within a year) and closed bridging loans (which have a strict, pre-agreed repayment exit date).

Most bridging loans roll up interest, meaning you do not make monthly payments, but the outstanding balance grows over time. While bridging can be fast, it does not offer the ongoing flexibility of a revolving facility. Furthermore, your property may be at risk if repayments are not made. If you miss repayments or default on a bridging loan or revolving facility, this could lead to legal action, repossession, increased interest rates, and additional charges.

What are the Typical Uses of a Revolving Facility?

Once the legal work is complete and the facility is active, the money is available on demand. Landlords use this flexibility for several strategic purposes, such as:

• Auction Deposits: Bidding at property auctions requires a fast deposit payment. Having a pre-arranged facility allows you to act immediately.
• Property Refurbishments: You can draw down funds to pay builders, buy materials, and update a property, then repay the balance once the work is complete or the property is revalued.
• EPC Upgrades: Bringing rental properties up to modern energy efficiency standards can require upfront investment.
• Covering Void Periods: If a property is temporarily empty between tenants, the facility can bridge the gap to cover running costs.

Because interest is only charged on the drawn amounts rather than the full limit of the facility, it is a highly cost-effective tool for ongoing portfolio management.

How to Speed Up the Legal Setup

If you want to ensure your legal work is completed closer to the two-week mark rather than the four-week mark, there are several steps you can take:

• Instruct an Experienced Solicitor: Use a solicitor who specialises in secured commercial or buy-to-let finance. General residential conveyancers may not be as familiar with the speed and requirements of second charge facilities.
• Gather Documents Early: Have your identity documents, proof of address, property title details, and current mortgage statements ready before you start.
• Check Your Credit File: Ensure there are no unexpected surprises on your credit report that could delay underwriting. 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)
• Engage with Your First Charge Lender: Inform your existing mortgage lender early on that you are seeking consent for a second charge. This can dramatically reduce communication delays between solicitors.

The Importance of Using a Broker

As a landlord, navigating the legal and administrative steps of securing a second charge facility can be complex. Promise Money is an FCA-authorised broker (Ref: 681423), not a lender. Working with an experienced broker means you receive expert guidance to find the right facility for your investment goals, and they can help liaise between lenders and solicitors to keep the process moving smoothly.

If you are ready to explore your options or want to speak with an adviser about setting up a facility, you can call Promise Money on 01902 585020 or visit our dedicated hub page at promisemoney.co.uk/landlord-revolving-credit-100.

Your property (your home or investment property) may be at risk if you do not keep up repayments.

People also asked

What is a BTL revolving credit facility?

It is a secured second-charge financial facility that functions like a property overdraft, allowing landlords to draw down, repay, and redraw funds against their rental property without reapplying each time.

How does a revolving credit facility compare to a bridging loan?

A bridging loan is a single-use, short-term product often with rolled-up interest, whereas a revolving facility remains open for ongoing use, and you only pay interest on the specific amounts you have drawn down.

Do I need my current mortgage lender’s permission?

Yes, because the revolving credit facility is secured as a second charge behind your primary mortgage, your first-charge lender must provide formal consent during the legal setup process.

Can I use the drawn funds for any property-related expense?

Typically, yes. Landlords use these facilities for refurbishments, auction purchases, EPC upgrades, void period cover, and securing deposits for new portfolio acquisitions.

What happens if I cannot make the repayments?

Because the facility is secured against your property, failing to make repayments can result in legal action, additional charges, increased interest rates, and ultimately the repossession of your property.