Refinance of 7-flat development valued at £7m on a single title

In 2014 we were approached by an experienced developer looking for finance to convert a Thames warehouse into luxury apartments.

With the works now successfully complete the developer returned to us for help in refinancing the property onto a buy to let mortgage, whilst raising capital for future projects.

The block of flats comprises of seven spacious apartments located on the Thames riverfront with an overall value in excess of £7m.

To qualify for the desired finance, the client needed to gain tenants for at least four of the seven flats before a new loan could complete. This did add a slight delay to the process as the flats couldn’t be put on the rental market until the property had been signed off by building regulations.

Once the property had been signed off the flats quickly gained tenants, with monthly rents of roughly £23,000

There were a few complications with this deal which meant we would need to approach a specialist lender.

  1. The client was keen to refinance the property on one title, instead of seven separate flats
  2. The client was looking for a loan amount of over £4m
  3. Even though the flats all produced what may seem to be a generous rental income it was not enough to meet the stress test requirements of many mainstream lenders

We took the case to a specialist lender with whom we have a strong relationship. This particular lender accepts large residential investments and takes a more commercial approach to underwriting. Happy with the desirable location of the property and the client’s track record an offer was made. Here are the details of the deal.

Property value: £7,100,000

Loan amount: £4,420,000

LTV: 62%

Rate: 4.55% 5 year fixed

Term: 10 years interest only

Borrower: Individual applicant

Lender arrangement fee: 1.2% of loan amount (£53,030)

Mortgage payment: £24,126 pcm

Rental income: £23,311 pcm

Gross yield: 3.94% pa

Consultant: David Whittaker, 01732 471601

 

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ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Need similar finance?
If you require finance for your next development, do get in touch to see how we can help. Remember we can source finance for both residential and commercial projects and we help businesses as well as developers. Call us on 0345 345 6788.

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