An existing client approached Enness seeking to raise capital against a buy-to-let property to support the purchase of an additional investment property. The client was an experienced property investor with a substantial residential portfolio and also held a senior position within a design business.
The property in question was located in South London and had recently been valued at approximately £440,000. The client owned the leasehold interest and also held part ownership of the freehold, with both interests held personally.
The ownership structure presented an additional consideration for the lender. With the freehold and leasehold interests held by the same borrower, the lender needed to be comfortable with the security structure and the associated legal considerations.
The size of the client’s existing property portfolio also narrowed the available lender pool. The client already held a significant number of buy-to-let properties and had reached lending limits with several existing providers. In addition, the rental income generated by the property did not initially support the level of borrowing required under more conventional rental stress assessments.
OUR SOLUTION
Enness approached a specialist buy-to-let lender with experience in larger property portfolios and more complex ownership structures. The lender was comfortable considering the client’s existing portfolio and wider financial position, while also taking a flexible approach to the freehold and leasehold structure.
The lender was able to accommodate the proposed borrowing despite the rental income being lower than required by some mainstream lenders. A five-year fixed-rate structure was arranged over a 25-year term, providing greater certainty around the client’s mortgage costs and supporting the intended capital-raising strategy.
The facility was secured on a competitive fixed-rate basis, with the valuation also arranged without a separate valuation fee, subject to the agreed lender terms.
The structure enabled the client to release capital from the existing buy-to-let property while retaining their wider investment portfolio and providing funding towards a further property acquisition.
This case demonstrates how specialist buy-to-let lending can provide solutions where portfolio size, rental coverage or unusual property ownership structures may restrict access to mainstream lenders. Careful lender selection and presentation of the wider financial position can be particularly important for experienced landlords with complex portfolios.
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, property suitability, affordability 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.
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.
