Refinance of recently renovated £2.7m mixed-use property let to the NHS

The clients: SPV Ltd Co looking for funding to repay a loan taken out to renovate a large rental property. Both directors are full-time property investors with years of development experience under their belts.

The property: The clients own the leasehold of a mixed-use property in the midlands valued at £2.7m. The ground floor is let to the NHS. The three floors above (once used as offices) have been recently renovated and now comprise of 69 student apartments.

The property is in close proximity to the local university and railway station.

The finance: The directors were looking to raise capital against the property to repay the loan taken out to carry out the conversion and renovation works. They were hoping for a long term commercial mortgage.

The application process: Our first step was to find a lender willing to lend on the leasehold of a recently developed property. Not all commercial lenders will accommodate this.

Fortunately, the renovation project had been a huge success and all of the student housing was already being let out. This would work in the favour of the clients. As well as details of the recent project, we also provided the chosen lender with:

Details of the tenancy and lease
Property portfolio spreadsheet
Proof of address and ID for both applicants
Proof of rental income
Three years business accounts

Our lender was very pleased with the clients’ property and could see that they would be able to support the repayments using their rental income. A valuation was instructed, and a full mortgage offer was made.

Here are the details of the deal:

Property Details

Property value: £2,700,000

Loan amount: £1,000,000

LTV: 37%

Rate: 2.6% over bank base rate

Term: 5 years part and part.

Lender arrangement fee: 1.5% (£15,000 added to the loan amount)

Monthly payment: £3,070 Pcm

Consultant: Steve Bedford, 01732 47160