Finance of investment property above a commercial unit


An investment banker and his wife were recently introduced to me by Enness’ Business Development Manager, who were looking to purchase an investment property in London. The property in question was a new build in South London, valued at £620,000. My clients had already given a deposit and had exchanged contracts over a year and a half ago when the property was valued at a lower price. An issue arose however, as the property was above a commercial unit – a scenario which many lenders will not consider.

Furthermore, a key obstacle in this case was the relatively low rental yield in this area of South London, as the property values of new builds had accelerated faster than the rental yields. As well as this, my clients needed to complete the transaction within a month.


In order to tackle these hurdles, I conducted an extensive search of the market to, first and foremost, find a lender who would be willing to look at a property situated over a commercial building. I managed to source a lender who would not just consider this, but who was also able to look at the rental yield of the investment property as well as employment income, and could manually underwrite the case. This was very important, as this meant that I could evidence the case every step of the way, and explain any points of contention as the application progressed.

It just so happened that Enness have a very strong working relationship with the lender who took the case, and so I could use my relationship to stress the urgent time requirements of my clients. As a result, I was able to get an offer turned around within a day of the final request being satisfied.

With all considered, I would ordinarily look to secure a 5-year fixed product to suit these circumstances, to achieve a high loan to value (LTV) based on rental yield. However, my clients were keen to source a flexible term, and as this lender’s stress rates were slightly different to the norm, I managed to secure a fantastic alternative product. This was an excellent 2-year fixed term loan over a period of 25 years at 2.99%.

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