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NEW BUILD BTL MORTGAGE FOR FOREIGN NATIONAL WITHOUT UK MAIN RESIDENCE


Client:

Coreco Commercial were recently approached by a Ukrainian national who was looking to purchase a new build property in Central London to add to their portfolio of rental properties. They already owned two unencumbered Buy to Let properties in UK, but didn’t own a main residential home in the UK.

Requirement:

The initial challenge was faced with the client’s background. As a Ukrainian national, they had a Tier 1 visa with previous connections to other Eastern European countries. This made underwriting the mortgage more complex.

There was then a large reduction in the loan available due to high service charges. This significantly reduced the net rental income that could be obtained, therefore had to be taken in to consideration by the lender for coverage of the loan payments.

Finally, there were large delays with solicitors as legal issues were faced surrounding ground rent and an entrance to the property. The ground rent was uncapped meaning that although it was in line with RPI making it seem like a standard agreement, it could still exceed the limit within London which is £1,000 pa. As a result, some lenders won’t lend on properties such as this because it may impact the ability to sell the property further down the line. The access ways also presented challenges as one entrance to the property would be blocked off if drainage or water pipes had to be worked on in future.

Facility:

Despite the challenges, there was one lender willing to work with Coreco Commercial adviser Peter Davies to bespoke a product that would work for the client. Hampshire Trust Bank worked tirelessly to review their risk exposure for each complexity, and created work arounds where possible to take a common-sense approach to lending.

The facility was signed for the day before the offer and valuation expired, almost 12 months to the day from the application being started!

 

Do you have a complex property finance requirement that you need some help with? At Coreco Commercial we’re experts at sourcing the most suitable solution for your needs, be it a bridging loan, development finance or even offshore mortgages if you’re looking to purchase property aboard. Talk to us today or call 0207 220 5100.

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