West One was approached by a self-employed individual who is a company director. The individual owns residential property in the UK valued at £525,000 which is mortgage free, they have clean credit, with no adverse credit risk. They are an experienced landlord with a portfolio of five BTL properties worth circa £1.7 million.
The property consists of five MUFBs, four separate flats being purchased with leases being created on completion, and the fifth on freehold which is being purchased outright by the applicant who is looking to retain the freehold. What makes this situation a challenge is that it is a limited company purchase. The landlord already owns five properties and will go on to own ten properties at the end of the transaction resulting in the overall exposure on the property by one lender sitting at 80%. Just one of these factors could lead to traditional lenders rejecting the opportunity to work with the client.
If we consider just one of these factors as an example, it is common for landlords to encounter difficulties when creating a portfolio of BTL when four or more properties are owned. We often see high-street lenders become reluctant to lend to 'professional' landlords. West One has products in place to lend on any additional properties to the individual with no limit on number of units owned.
The exposure on a block can cause further issues which complicates matters for some lenders. As the client owns the whole property, they may look to spell part of the block and retain the remainder. West One can help here by looking to lend against the freehold and value of the remaining block, with the leased units sold on.
The applicant is buying a five-unit MUFB for £650,000, with a loan of over £350,000. On the surface, a simple transaction, but the intricacy involved because the individual is self-employed, a 'professional' landlord and overall exposure on the block by one lender. These challenges on an individual basis can prove problematic, however specialist lenders like West One who work with applicants, and judge cases on their merits are able to work through challenges and provide a solution.
The advantage and value of using West One was having a specialist lender who approached the case in a flexible and open manner. Factor involved in the case could lead to many lenders declining the client's application, whether it be the employment status, the nature of the property or because they are a 'professional' landlord. Anyone of the factors made this a complex case, but as a specialist lender, West One can work through obstacles to a satisfactory agreement for all parties.
We are able to work with the client who was an experienced landlord but had a set of challenges which needed to be worked through in order to facilitate the lending. Along with the business challenges, the client also had to contend with any personal challenges of working through the situation which involved their ex-wife.