Case Study – Complex Split Title Buy to Let Finance
5-Star Rated Award-Winning Mortgage Broker ⭑⭑⭑⭑⭑
Having found an attractive investment opportunity for an extraordinary country house mansion with adjacent land in a very sought-after location in the Greater London area, our client needed to act quickly to secure the property, valued at £4.4 million.
Needing in excess of £2 million in funding for the overall purchase, the client required expert advice on the best and quickest way to proceed. A swift Google search brought them to The Buy to Let Broker and Steve was the adviser for the task at hand.
Looking to purchase in a limited company, the client intended to acquire the entire estate that included a 7-bed detached house, an additional 2-bed flat and an adjoining plot of land.
Using this neighbouring land, after the acquisition the client intended to develop six further properties across the four acres to maximise the investment potential further, creating additional complexities as the property was currently held on a single title.
On top of this, although the client was a company director of a successful software firm with branches in both the UK and the US, it was a relatively new venture with less than two years accounts. The client was also an existing landlord with a portfolio of several properties held in personal name, which the client was in the process of selling.
The client was able to provide a substantial deposit for the acquisition but this was to be pulled from multiple sources, including an inter-company loan, an outstanding business loan owing to the client, the sale of property from the existing portfolio and a gift from a family member.
Unfazed by complexity, after an initial call with the client to fully understand their needs and requirements for the project, Steve set out to pinpoint not only a competitive deal for the client but a financial option that would support their long-term goal of splitting the title to allow the development of the new properties to go ahead with minimal restrictions.
Always going the extra mile, with the support of the case management team, Steve undertook extensive research into the property, the local area and even recent planning applications which allowed him to present the most compelling case to the lenders and help secure the much-needed funding.
Knowing the strength of the client’s deposit and further borrowing potential from their thriving business, Steve directly reached out to several senior contacts in the industry to discuss all the merits of the client’s case.
Collating all documentation and extensive proof of each deposit source, producing concise business overview reports and even demonstrating that there was adequate access to the plot of land to allow the development to go ahead without infringing on any existing tenants in the main property, Steve was clearly able to demonstrate the viability of the client’s plan for the development and approached specialist lender Hampshire Trust Bank (HTB).
Keeping in mind the client’s long-term plan, Steve liaised with the solicitor on the case to outline the boundaries on the property where the client’s proposed future development is planned for. Using this information and understanding the client’s full financial situation, Steve then negotiated with HTB to discount the value of the land from the overall proposition and only lend on the subject property and the remaining land surrounding it, the client would then cover the value of the development land with the deposit they already had available.
Structuring the finance in this way was not an option the client had considered but meant that they only needed a funding facility of £1.75 million (50% loan-to-value (LTV) of the revised valuation of £3.5million once the land was discounted).
This innovative solution benefited the client in a multitude of ways, firstly it would enable them to secure a more competitive rate for the mortgage and reduce their overall costs, but of equal importance; because the lender had ignored the land value at the inception of their mortgage, the title could be split freely at any future point with considerably less red tape, providing greater flexibility for the development which was of paramount importance to the client.
Having built such a strong relationship with HTB’s underwriting team and from the strength of his communication and extensive due diligence ahead of submission, HTB agreed to the terms and the client was able to secure the desired property swiftly and with an even better finance structure than was originally requested.
Ever using all of his expertise and passion for his clients to deliver an impressive service, we’re extremely proud of Steve’s exemplary work on this.
HTB’s Business Development Manager, Wes Baker, added: “It was a pleasure working with Steve and The Buy To Let Broker on this case. This is a great example of complex cases being delivered on the back of a solid broker & lender relationship and demonstrates that HTB`s appetite to lend remains one of the strongest in the market.”
Chat To A Mortgage Expert
Feefo Platinum Trusted Service Winner 2020, 2021, 2022, 2023 & 2024 ⭑⭑⭑⭑⭑
If you are looking for a buy to let mortgage and a broker with in-depth market knowledge, give us a call on 08009499410 today. You can also request a callback by entering your details below.
Any property used as a security may be repossessed if you do not keep up with repayments on your mortgage.