- Client: UK-based self-employed property developer with multiple businesses and international income
- Property: London residential property valued at approximately £6.5 million requiring around £300,000 of refurbishment
- Challenge: Required simultaneous refinancing of a buy-to-let property and purchase of a high-value primary residence
- Finance: 70% LTV on both the new purchase and buy-to-let remortgage at 1.8% above LIBOR, fixed for five years at the time
Remortgaging a buy-to-let property can become more complex where the borrower is self-employed, has multiple businesses and receives income in different currencies. Enness was approached by a successful UK-based property developer who was looking to refinance an existing buy-to-let property alongside the purchase of a new primary residence in London.
The client owned several businesses in the UK and overseas, resulting in a complex income structure with earnings received in multiple currencies. The proposed transaction involved two elements: releasing equity from an existing buy-to-let property and using the funds towards the acquisition of a new London home.
The new property was valued at approximately £6.5 million and was intended to become the client’s primary residence. The property had previously been divided into three units of accommodation and required approximately £300,000 of refurbishment to return it to a single dwelling.
The client wanted the purchase and buy-to-let remortgage to be completed as one overall financing package. This required a lender comfortable with both the client’s complex income profile and the combination of residential and buy-to-let borrowing.
A conventional high-street approach would typically have resulted in a more conservative LTV, with the source indicating that around 60% LTV was more usual at the time. Enness therefore looked for a lender prepared to take a more flexible view of the client’s wider circumstances.
Following discussions with a suitable high-street lender, Enness was able to negotiate terms that provided 70% LTV on both elements of the transaction. This allowed the client to refinance the existing buy-to-let property while also securing the required level of borrowing against the new London residence.
The resulting facilities were arranged at a rate of 1.8% above LIBOR, fixed for five years at the time.
The case demonstrates how buy-to-let mortgage finance can form part of a wider property financing strategy, particularly where a borrower is self-employed and has multiple sources of income. Combining a buy-to-let remortgage with a high-value residential purchase can require a lender willing to assess the overall circumstances rather than each transaction in isolation.
For property developers and other self-employed borrowers with complex income structures, specialist mortgage finance can help identify lenders able to consider multiple income sources, international earnings and more complex property requirements.
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, valuation and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise. Buy-to-let investments involve risks including changes in property values, rental demand, void periods and associated costs. Where income or assets are held in different currencies, exchange-rate movements may also affect affordability and the cost of borrowing.
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.
