Our client had converted an office building in Harrow into an 11 bedroom HMO and separate studio apartment, but they needed to refinance away from their existing short term lender and onto a longer term buy to let facility.
The Problem
The main challenge was the valuation.
Our client was targeting a £2.1m valuation to raise the level of finance they wanted. However, this property wasn't a straightforward HMO. The HMO and a studio apartment were under the same title, so the valuation approach and choice of valuer were particularly important. A lower valuation would have reduced the amount the client could borrow and potentially affected their ability to fully repay the short term finance.
The Solution
Before submitting the case, Amandeep, our Specialist Mortgage and Protection Advisor looked closely at lenders that were comfortable with this type of property. We also researched their valuation panels to find valuers who had relevant experience with larger HMOs and similar properties.
We ultimately submitted two separate applications through different lenders and valuation panels. This gave us another route to explore when it came to achieving a valuation that properly reflected the property.
The strategy worked. We acheived a A £2.1m valuation and were able to secure the funding the client was looking for.
The Outcome
We arranged a £1.5m BTL term loan against the £2.1m valuation and completed the refinance in four weeks. The £1.5m facility gave the client enough money to repay their existing short term lender and move the property onto longer term finance.
Loan amount: £1.5m
Valuation: £2.1m
Purchase price: £850,000
Finance: Buy-to-let term loan
Property: 11-bedroom HMO and studio apartment
Location: Harrow
Completion: 4 weeks
From an £850,000 office purchase to a £2.1m valued HMO and studio, this client had added a huge amount of value in the property. Getting the right long term finance meant they could successfully move on from the short term funding used for the project.
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