An investment banker and their partner were introduced to Enness while seeking finance for a new-build investment property in South London. The property was valued at £620,000, and the clients had already paid a deposit and exchanged contracts around 18 months earlier, when the valuation was lower.
The transaction presented several challenges. The apartment was located above a commercial unit, which can restrict the number of lenders willing to consider the security. In addition, rental yields in the area were relatively modest compared with the rate at which new-build property values had increased. The clients also needed to complete within a month, creating additional time pressure.
OUR SOLUTION
Enness reviewed the available options and identified a lender prepared to consider the property despite its location above a commercial premises. The lender was also able to assess the application using both the expected rental income and the clients’ employment income, with the case being manually underwritten.
The manual underwriting process allowed the circumstances surrounding the purchase to be presented in greater detail, including the property’s rental potential and the clients’ wider financial position. Enness’ established relationship with the lender also helped maintain momentum as the application progressed.
Following submission of the final requirements, the mortgage offer was produced within a day, helping the clients meet their tight completion deadline.
A two-year fixed-rate mortgage was arranged over a 25-year term. The structure provided the flexibility the clients were seeking while accommodating the lender’s approach to assessing rental income and affordability.
This case demonstrates how specialist mortgage sourcing can help investors purchasing properties with features that may fall outside standard lending criteria. A lender’s approach to property type, rental income and manual underwriting can be particularly important where timing is also a key consideration.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
