Background, Challenges & Outcome
In this case the property was already owned with the client looking to raise finance against the asset so they could purchase another investment property.
The complexity was that the tenant was a corporate entity rather than an individual who would be subject to a standard Assured Shorthold Tenancy (AST). This alone is an issue to many mainstream buy to let mortgage lenders.
What made this more complicated was that the corporate tenant was a company owned by the client, for many lenders it would appear to be the borrower letting their own property to themselves.
In many cases like this it is about proving the deal makes sense. The client used the property as a base for staff who would otherwise find the cost of living in London prohibitive. By offering accommodation the client could attract quality staff and retain them, subsidising their rent as part of their employment contract.
By proving why the deal makes sense and showing that the corporate tenant was liquid and could afford the rentals we overcame the lender objections.
A total of £324k of buy to let finance was agreed and completed in February 2020 with the client purchasing an additional property for the same purpose afterwards.