Client circumstances:
Our client was a property investor who – through their limited company – specialises in purchasing residential properties, renovating them and re-mortgaging at the asset’s increased value before letting each one out to students. Having previously purchased a property in the autumn of 2022 for £250,000 using a short-term loan, the client completed a full refurb and was now looking to secure long-term finance to repay the existing charge and release capital to purchase further BTL properties. Knowing our ability to work with HMOs, their broker reached out to our buy-to-let team.
MT Finance solution:
While the property had originally been a single household dwelling, our client’s renovations had transformed it into a HMO in line with local authority planning and guidance. With a HMO licence already in place and a Student AST secured from July 2023, this gave us the confidence to issue a buy-to-let mortgage of £313,685, including fees, at 76% loan-to-value against the property’s increased open market value of £410,000. The term was set for 25 years.
The benefits:
Thanks to our willingness to lend against HMOs, our client was able to repay their existing loan, release capital for further BTL purchases and, secure long-term finance on their property. While they ultimately plan to let it out to students at the beginning of the next academic year, the client also has the option to generate income in the interim via short-term lets. The property’s central urban location will make this easy to achieve.