A couple of months ago, Gary, a petrol retailer and one of our buy to let investors, called for a chat about an idea that he been considering, following a recent visit to his long standing Accountant.
Gary’s Accountant, knowing him very well, suggested that the purchase of a holiday let property would be a good addition to his portfolio, in terms of providing considerable lifestyle and tax benefits to his overall position.
The adviser was quick to refer Gary to the mortgage specialist in the Holiday Let Mortgages Dept. The adviser quickly talked him through the salient points and also recommended that he download the free electronic brochure, for some additional guidance.
Two weeks later, following a trip to his favourite part of North Wales, Gary called our Holiday Let Mortgages Dept with a new potential case.
He went on to explain that the current vendor lived at the main property, but had converted two outbuildings into two fully self-contained cottages within the boundaries of the land. However the planning permission on the cottages was conditional that the cottages being used for holiday letting purposes only (this is known as a 52 week usage restriction). Due to nature of the property, Gary thought that it may end up being classed as commercial finance, which he knew might come at a premium these days.
Through his experience, our consultant knew immediately that most conventional lenders would reject this case. Multiple dwellings on a single title are usually an instant “no” and the clincher was the usage restriction.
Even most commercial lenders would decline this type of security. However, this type of property security is quite often presented to specialist brokers, and our consultant contacted a lender with whom Holiday Let Mortgages has a strong relationship. He knew that the lender would look at the whole picture, and if there was good solid reason to lend-they would lend.
Our specialist knew that the lenders underwriter would consider:
- Gary’s personal financial strength, could he support himself without having to use the income derived from the holiday lettings?
- The property as a whole in terms of saleability, should repossession be necessary
- If the projected gross income from the holiday let strong enough to support the loan
Holiday Let Mortgages got the loan agreed at 70% and at non-commercial interest rates.