West End Medical Practioners (November 2009)
Our customer was looking for funding to purchase a property containing mixed residential and medical practitioners in a prime location in the West End of London. Medical practitioners occupied the premises under short-term licenses of one to three year terms and this was not suitable for many lenders. Indeed, many licenses had been allowed to lapse as the vendor had intended to sell with vacant possession.
The customer also required a steady cash flow in order to invest in the property during the initial years after the purchase. A considerable amount of both internal and external refurbishment was required to achieve maximum income.
How did we help?
After a number of meetings with the clients, we were able to negotiate a five year interest only period on the loan to allow refurbishment to occur and also to allow time for a review of the current medical licenses to the medical practitioners.
We negotiated the following funding for the purchase:
- Scheme: Bank Base Rate + 2.5%
- Property value £2.1 million
- Loan amount: £1.575 million
- Loan to property value: 75%
- Repayment: Interest only for the first 5 years, converting to capital and interest
- Term: 20 years
- Property value £2.1 million
- Loan amount: £1.575 million
- Loan to property value: 75%
- Repayment: Interest only for the first 5 years, converting to capital and interest
- Term: 20 years
Since the completion of the refurbishment exercise and a substantial uplift in income, the property has been revalued at £3m. A further advance has been agreed to provide the capital required for a new purchase.
