First-Time Commercial Owner-Occupier Mortgage During Lockdown
The Clients: A self-employed couple who run a highly reputable butcher and bakery in their local community. Besides their own home, they didn’t own any property.
The Property: A large mixed-use trading premises consisting of a sizeable ground-floor retail unit which our clients already rented, and three self-contained flats above. Located at the heart of the neighbourhood, and with excellent transport links, the property was ideal for their business and residential rental opportunities.
The Finance: Using retained profits from their business as a deposit, our clients required a semi-commercial owner-occupier mortgage in order to purchase the property from the existing freeholder (their landlord).
The Challenge: As the existing freeholder was keen to sell as quickly as possible, we were working against the clock. Our clients had already approached one broker about the finance but were unhappy with the fees and terms offered. Desperate not to lose the property, they came to us for help.
It’s fair to say that commercial lenders have tightened criteria due to the pandemic, as it’s been tough for many businesses to remain open during lockdowns. We’d need to put together a strong case for our clients, highlighting their business’s strength and longevity to convince a risk-alert commercial lender to take the case. We also knew it was important to our client to achieve a competitive deal, with no hidden costs or ‘surprise’ clauses.
The Solution: Our clients had tried, unsuccessfully, to contact their usual funding source for help with the deal. We were able to get through on their behalf, and while the lender was happy to proceed, could only offer a 60% LTV mortgage which wasn’t ideal but our client was willing to proceed. However, it became apparent that the processing times with this lender were not going to meet our requirements.
Determined to secure the finance our clients needed to own their own commercial property and become landlords, we turned to a reputable challenger bank. We put forward our case and were able to secure a mortgage offer almost immediately. Mindful of the cases' time pressures, the lender was able to underwrite the mortgage before completing a valuation. Happy with the terms, our clients are now well on their way to owning their own premises! Here are the details: