Property developer remortgages new build block of flats onto £1.6m+ buy to let mortgage
The client: An experienced property developer and successful businessman with over ten years’ experience in new build developments.
The property: One of our client's new developments - a block of eight flats adjacent to a railway line in North London. Comprising three 1-bed flats, four 2-bed flats and a studio, all the units have been recently let on Assured Shorthold Tenancy (AST) agreements generating in total just over £10k per month in rent.
The finance: Having used £934k of property development finance and a further advance of £194k during the build stage, now that the project was complete, our client was keen to remortgage the entire block onto a longer-term, less expensive product.
We suggested that his current lender might provide the best solution because:
- The lender is a leading provider of specialist buy to let finance accepting multi-unit freehold blocks of flats as standard
- From inception to completion of the project, the lender already has a strong financial relationship with the client, with us as the broker and the property, which should expedite the refinance process
- Working with the existing lender would allow us to negotiate a significant (c. £17k) reduction in the exit fee from the development finance
- The lender was also happy to reduce its standard arrangement fee to further recognise the relationship with the client
During the build Japanese Knotweed had been discovered close to the site, so the lender was keen to see proof that it had been dealt with and required the client’s solicitor to write a formal letter seeking confirmation that the knotweed had been satisfactorily eradicated/controlled. Subject to this condition, the following terms were offered and the deal completed once the necessary confirmation was received:
