Two UK-based applicants approached Enness Global seeking finance to purchase a circa £2 million buy-to-let property in Central London at approximately 65% loan-to-value (LTV). The applicants had previously owned buy-to-let properties and had recently sold one, with the proceeds intended to provide the deposit for the new acquisition.
The applicants were currently renting and did not own another residential property. They also owned two established limited companies with strong net profits, although they drew relatively modest personal incomes from the businesses. This created an additional consideration for the lender, as the absence of an existing residential property could raise questions around whether the proposed purchase was genuinely intended as an investment.
Buy-to-let lending is typically assessed differently from residential mortgage lending, with greater emphasis placed on the anticipated rental income and the property's ability to support the borrowing. In this case, it was important to demonstrate that the applicants had a credible investment rationale and that their wider financial circumstances could be considered alongside the proposed investment.
Enness Global reviewed the applicants’ wider financial position, including the profitability of their businesses and their existing personal circumstances. The strength of the companies provided useful context when considering the applicants’ overall financial position and potential residential affordability. In addition, the applicants were already committed to a long-term tenancy, and their rented property was larger and more conveniently located for their family, including proximity to their children’s school.
These factors provided additional context supporting the proposed investment rationale for the Central London property and the applicants’ intention to retain their existing rented accommodation.
Enness Global secured a 65% LTV buy-to-let mortgage on a fixed-rate, interest-only basis, subject to lender criteria. The facility enabled the applicants to proceed with the acquisition while retaining the flexibility associated with an investment property and making use of the deposit generated from their previous property sale.
The case demonstrates the importance of presenting the full financial and personal circumstances of applicants when arranging specialist buy-to-let finance. Where a transaction falls outside a lender’s typical profile, detailed consideration of the applicants’ wider circumstances, existing commitments and investment rationale can help identify lenders whose criteria are better aligned with the case.
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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.
