The Clients: Two business partners acting as joint shareholders of their Limited Company. This was their only property investment.
The Property: A large nine-unit Multi-Unit Freehold Block (MUFB) located in a busy town in South-East London. Because of the property’s central location, each unit was certain to achieve significant tenant demand.
The Finance: We contacted our clients as the fixed-rate mortgage we had secured them in 2020 was approaching the end of its product term. After an initial catch-up call, our clients told us they wanted to remortgage the property and capital raise to fund future property investments.
The Challenge: As existing clients, we already had a good understanding of their property investment circumstances and plans. Therefore, the only challenges we faced with this case were related to the mortgage product we were looking to secure.
Firstly, the rate was a Limited-Edition product from a specialist buy to let lender. As such, we had to submit the case and receive the offer on a tight deadline, as lenders often withdraw these products with only hours' notice.
Secondly, the product was a green mortgage rate, meaning each individual unit had to have a minimum EPC rating of A-C. When the lender reviewed the property details, we discovered that some units had expired energy performance certificates. Consequently, the clients needed to produce updated and valid EPC reports to reassure the lender they met the requirements for the rate. This threatened to delay the application process, which could ultimately have meant we missed the deadline for securing the limited-edition product.
The Solution: Our expertise in working on complex property types, coupled with our clients’ experience, allowed us to submit the mortgage application quickly. With our help, our client submitted all correct and up-to-date documentation that our lender required; all that was left to do was for our clients to book new EPC assessments on the individual units needing updated reports. Once the valid certificates came back proving the units had a minimum EPC rating of C or above, both the lender and the clients were happy to proceed. Here are the details:
Property value: £3,400,000
Loan amount: £2,210,000
Rate: 5.25%, five-year fixed
Term: 25 years, interest-only
Mortgage payment: £9,679 per calendar month
Lender arrangement fee: £2,495
Rental income: £14,000 per calendar month
Application: SPV Limited Company
Rate as at June 2023
28th September 2023