I was recently referred a client who was a property investor with a portfolio of over 20 properties, specialising in houses of multiple occupation (HMOs).
My client wanted to purchase a property for holiday lets as he wanted to enter a new area of the rental market and maximise his opportunities as a landlord. He had a property in mind in Lower Lydbrook, Gloucestershire, valued at £370,000.
Throughout the process, there were a number of challenges encountered. Firstly, the property was quite large so the number of bedrooms posed a challenge. Properties with a large number of bedrooms can be considered a commercial let so it was necessary to ensure we secured the preferential rate of a residential mortgage, rather than commercial. Furthermore, due to the client’s large property portfolio, he had a high level of secured debt.
In order to overcome these obstacles, we had to demonstrate to the bank the client was a professional landlord and with an excellent track record. We were also able to demonstrate similar properties in the vicinity which were marketed for holiday rentals, giving the bank comfort knowing the client would be able to achieve the anticipated rental expected.
Thanks to our exceptional relationships with lenders, I knew of a very niche lender who specialised in the rental market. We chose this lender as they were able to take a flexible approach in terms of affordability as well as offering attractive terms, suitable for the client’s requirements. This would not have been possible without my strong relationship with the lender and its head of lending.
The result was a two-year term at 3.48% and my client was able to make the purchase and enter the holiday rental market.