Refinance of block of flats owned by trust to repay loan and extend property
We were approached by an experienced landlord-cum-property developer-cum-architect who was looking for refinance on a five-storey freehold block of five flats in West London in order to pay off an existing loan and raise additional funds for further development. The property is owned by a family trust, one of the trustees of which is the client.
The additional funds would be used to extend the top floor flat from a small one-bed to a three-bed duplex apartment, which would considerably increase the overall value of the entire property and the rental income.
The number of lenders willing to consider this project was severely limited because:
• The client was looking to raise nearly £1 million – the LTV being too high for mainstream lenders.
• The property is owned by a family trust – not something many lenders will consider.
• In addition to the client, one trustee is an Irish national living in Eire and another is more than 90
years old – some lenders which do lend to trusts will not accommodate the age or foreign
After some research and initial conversations with a number of providers, we were able to negotiate the following terms with a specialist development and bridging lender: