This weeks case study concerns the purchase of a North of England apartment block costing £1.13M. The client sought not only loan of 75% of the purchase price, but also needed our help to fund half of their deposit as well. The apartment block was on a single freehold title.
To add to the complexity, the block contained 11 apartments, but one of those was owned by an unrelated party and could not be purchased. Lenders use the term “broken block” to describe this situation ie. when an applicant is not able to purchase or own a whole block of apartments leaving one or more owned by other parties. Most lenders do not like these situations. Additionally, the client has extensive property holdings with many different limited companies, and many “cross company” loans between them – a complex situation that some lenders also find unacceptable. Indeed, such a “cross company” loan was to be used to help pay the clients deposit for the purchase.
We looked at c. 20 of the best portfolio buy to let lenders to come up with the best outcome for the client. We were able to secure a fantastic deal – a 20 year interest only loan of 75% of the purchase price. This provided a fixed rate for the first 10 years of 3.7%! (Note that this rate was booked in Autumn 2022, but we have been able to work with the lender to ensure that the client was still even able to access that rate now. The loan has just drawn down this week.)
The deposit was part funded via a separate short term loan with a different lender against an unconventional commercial property which again, many lenders had difficulty with. We were able to provide a flexible loan from our own “in house” loan company – Yorkshire Property Finance – which the client believes can be paid off within a fairly short timescale. More on Yorkshire Property Finance shortly…….
All in all – a challenging case but a happy client!