Unconventional Case Studies

An experienced landlord, with a large portfolio of properties, who had recently completed the construction of new student accommodation near to the University of Liverpool. The client wanted to pay off the development finance and raise additional funds for his next development project.

The accommodation was a row of nine terraced houses, each split into a seven bedroom HMO, providing lodging for 63 students in total. An added complication was that all the properties were held on the same title.

The total value of the properties was £3.3 million and the landlord wanted to borrow 80% LTV. R & E Finance was able to arrange a loan of £2.64 million with interest serviced, on a five-year term.

A 61 year old self-employed director who had successfully developed two adjacent four-bedroom detached houses on a plot of land in Oxfordshire. Both properties were listed on the same title and both were tenanted. The total value of the houses was £1.73 million.

The client wanted to raise £1.07 million to clear the development loan, pay off existing debts and fund a new project. A lender was able to structure a solution to meet the client’s requirements, with a product that enabled him to roll up some of the interest and service the remainder.

A limited company application, with three individual applicants, looking to purchase a desirable maisonette in Fulham for £400,000. The clients wanted to borrow £295,000 to buy the property but the rental value was only £1,495 per month and so the numbers did not stack up.

As the clients were experienced landlords, a lender was able to structure a solution by splitting the balance and enabling the clients to roll up interest of part of the loan and service the interest on the remainder. Because there were no monthly payments due on the roll up element of the loan, this portion was not subject to a stress test and so it meant that the serviced loan element, as it was now a smaller balance, met the required stress test.

As a result, the clients were able to invest in a sought-after property with robust potential for capital gains even though it delivered a low rental yield.

A buy to let investor who was looking to purchase a property in need of a new kitchen, bathroom, and modernisation throughout. The purchase price of the property was £200,000 and the investor intended to increase both the capital and rental value by carrying out the required work, with no requirement for the property to be tenanted.

With its Refurb to Let product, a lender was able to lend £124,000 (62% of the purchase price) to the borrower, on a 12-month term and then roll up all the interest on top. The minimum interest obligation on this product is three months and so, from the fourth month, the investor was free to remortgage or sell the property with complete flexibility.

A 50 year old self-employed ex-pat living in Zimbabwe. The client wanted to raise funds on a buy to let property in England in order to purchase another property abroad. The unencumbered detached house in Kent was already tenanted and valued at £875,000. The client wanted to borrow £300,000 on a five-year term and wanted to service the interest. The rental income was sufficient to cover the stress test for this loan balance and so a lender was able to mortgage the property, releasing the capital the client wanted to access.

A Russian national based in Europe who wanted to remortgage an apartment in London. The property was vacant and being marketed for sale, with a valuation of £7 million. The client wanted to borrow £3.5 million and although he was a successful real estate developer, he had no credit record in the UK.

A lender was able to lend the required amount, on a two-year term, with interest serviced monthly. The Early Repayment Charge on the product was only three months and so, if the client was able to sell the property in this time, he would be able to redeem the loan from the fourth month with no charge.