£564k commercial investment mortgage offer in just 3 weeks
We were approached by a new client, a limited company director with a portfolio of six buy to let properties held in a SPV limited company. The client wished to purchase his first commercial investment property, a convenience shop near Portsmouth.
The agreed purchase price was £940,000 and the client wished to borrow 60% loan to value, a total of £564,000. The vendor was pushing for a quick sale, so we needed to use a lender that would make a quick decision and then proceed to offer and completion without delay. Also, we needed a lender that would offer a competitive rate despite the client having no experience of commercial property investment.
The shop is currently let to a well-known chain, which is attractive to lenders as it gives them confidence that rent payments will be made on time. There is also a good length of time remaining on the lease, just shy of ten years, which again, is an attractive feature for a potential lender as a longer remaining lease duration means more time before the first potential void period. These factors helped us to put together a strong proposal on behalf of the client to submit to a lender which we knew from experience would be interested in this type of deal, and crucially, would be able to work to the timeframe required.
A full valuation confirmed the suitability of the property as an investment, but unfortunately, down-valued it by £20,000. However, the lender confirmed that it was still happy to lend £564,000 which meant that the deal could proceed if our client could increase his deposit or get a reduction in the asking price. The vendor was not willing to budge on price, so our client, not wanting to lose the property, made up the shortfall.
Conscious of the timescales involved, the lender issued a formal mortgage offer just three weeks later. We then managed the application carefully, liaising with the client, the lender and the both legal representatives to ensure that the deal completed successfully and on time.
Here are the details of the rate agreed.