Octopus Property is one of the largest bridging loans and property finance providers in the UK. The company was originally launched in 2009 and traded under the name Dragonfly before being rebranded to Octopus Property in 2016. Being one of the most established lenders in the industry, they had lent out over £2.2 billion by the end of 2016. It is part of the larger Octopus Group which was established in 2000 and currently manages over £6 billion of funds for 50,000 investors.
Loan Value Available
£50,000 to £25 million
1 month to 5 years
Typical Time to Fund
Starting from 0.60%
Max 65% LTV
FCA License Number
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Bridging Loan Hub
5 Prospect Close
Octopus have a variety of loan products in the regulated and non regulated sector – so they should have an offering to suit your requirements. Loans are always secured so you risk losing this if you cannot keep up with repayments long-term. It is not common for properties to be repossessed as the lender will always carry out other measures to help you repay your loan.
This is residential property only and is commonly used for mortgage delays, people moving home and buy to let. The minimum amount you can borrow is £200,000 and the loan-to-value ranges from 50% to 65%. The lower your LTV, the lower the interest rate you pay since you are taking more equity in the property and borrowing less as a percentage of the loan.
Octopus only offer this as a first charge, meaning that it must be the first priority on your list when it comes to making any mortgage repayments and is not second choice after your own mortgage or any other properties. The company can lend to any customer and property located in the United Kingdom.
This product should not be used to repair your credit history but instead using for development, refurbishment or for moving property. Customers are able to repay early after one month of redemption and interest is calculated on a daily basis, although it typically starts at 0.5% or 0.6% per month of the property’s value.
Some fees can be added or deducted to or from the loan advance and others are payable up front. The property is valued on a 180 day Open Market Valuation basis and base our maximum lending on this figure. There is also an arrangement fee of 2% and procuration fee of 1.25% of the loan’s value and this required to help fund all the set up and administration involved with getting your loan ready for funding.
2nd charges are available in both a regulated and non regulated environment. The minimum amount you can borrow is £300,000, the maximum LTV is 65% and the monthly interest rates start from 1.00%. The terms you receive for a second charge tend to be a bit more restrictive in bridging, simply because now this is the second property in the line of mortgage repayments. Since lenders known that they are not the main priority, they have to assess risk and this means charging slightly more and allowing you to borrow slightly less.
Octopus consider all properties situated in the UK and are able to handle complex structures and foreign nationals. The exact words on their website are ‘test us’ – in case you have a very complicated case that you want to apply for. These types of loans are always secured but you cannot live in this property (especially if it is unregulated), as it must just be used for investment purposes or for raising finance.
Customers can apply for either a bridging loan product or term loan product. Interest is charged on a daily basis and whilst you can repay early at any point, you have to run with the loan for at least one month. In terms of the repayment method, Octopus state that they are flexible with the interest and you can choose to service it or retain it for unregulated loans. If the loan is regulated, we will roll and compound the interest and then it will be paid upon the end of the loan term. Whilst customers with bad credit can apply, there may be additional checks involved. You can read more about the rules for second charges here.
Other products offered by Octopus include:
Buy to let loans – this is for landlords looking to renovate or refurbish a property and then rent it out to tenants. But because they are not selling the building at the end of the loan term, they will usually refinance when the term expires.
Bridge to let loans – this is very similar to the buy to let offering above, but because it involves bridging, it is more for those that do not have a deposit or any funds, but want to move fast on a very strong business opportunity with good potential.
Octopus Company Information
Address: 33 Holborn, London, EC1N 2HT
Countries they operate: England only
Member of: NACFB, ASTL, Association of Bridging Professionals