A client recently returned to me looking to purchase a buy to let property. The client already had a portfolio of 25 properties, which Enness had previously secured finance for, and was a professional landlord with rental income to show affordability.
The property in question was a four-bedroom terraced house in Portsmouth, on the south coast of England, and was let out on a single tenancy agreement. The house was valued at £274,000 and they required a loan of £191,800 – 70% loan to value.
A number of challenges presented themselves in this case; firstly, the properties location. The house was adjacent to a car sales room and a row of shops, causing potential lenders to question how easy it would be to rent out and, ultimately, sell. This made them feel uncomfortable in terms of their security over the asset.
Secondly, the fact the client only had rental income was also a hurdle for most mainstream lenders as the majority do not lend to professional landlords with rental income as affordability. Particularly if they have more than four buy to let properties with mortgages against them.
Despite the above, and my client being a professional landlord with rental income, Enness’ whole of market lender relationships meant I was confident I would find one who would be willing to take a more bespoke approach to the underwriting of this loan.
Indeed, I approached a niche lender who did agree to lend subject to their valuation. I spoke to the underwriter before an application was made and presented them with the property and, unlike other lenders who had declined immediately, the lender chosen was very happy to take a more flexible approach.
As a result, I was able to secure my client exclusive rates with a niche lender who offered a 5-year fixed term at a rate of 3.49%.