The Intermediary – February 2025 - Flipbook - Page 55
B RO K E R B U S I N E S S
Case clinic
lend and the build cost, which must include a 20%
contingency.
Without a confirmed costing in place, we
would not be able to assist, but would be pleased
to discuss further when the final figures have
been delivered.
C AS E T WO
Mixed-use property with
limited deposit
young professional couple earning a
combined annual income of £70,000
(£45,000 and £25,000) intend to buy
a £350,000 mixed-use property that includes
a ground-floor retail space and an upstairs
residential unit.
The couple plan to live in the residential portion
while renting out the retail space to supplement
their income. However, they only have a 10%
deposit and have struggled to find a lender willing
to finance a property with a commercial element.
Many lenders require a significantly higher
deposit or treat the property as a buy-to-let, which
increases the affordability thresholds beyond the
couple’s income.
The couple also lack prior experience as
landlords, which has raised additional concerns
for lenders.
A
HARPENDEN BS
We would be pleased to consider this property,
however our maximum loan-to-value (LTV) is 80%.
If the couple are able to obtain the difference, we
would treat the property as a residential, providing
the residential area is at least 40% of the overall
footprint. Also, there must be no internal access
between the residential area and the commercial
area. Lack of landlord experience would not be an
issue – we lend to first-time landlords.
a bridging loan, although they would need a
larger deposit.
Once acquired, they could set about splitting
the title to create one residential property, which
could then be refinanced using a traditional
mortgage – albeit from a lender happy to lend
on properties above commercial – and obtain a
commercial mortgage to refinance the commercial
property on the ground floor.
UTB would consider lending on a residential flat
above commercial if it had separate title.
BUCKINGHAMSHIRE BS
The society is unable to consider lending for this
case due to the retail space located beneath the
residential property.
Since the society would have no control over
the use of the retail unit, this could impact
the property’s resale potential, given its
mixed-use nature.
WEST ONE LOANS
How this property is categorised is crucial. At
West One, we would not view it as buy-to-let
(BTL), nor view the couple as landlords in the
usual sense of the term. These are cases we
often proceed with, though distinguishing the
commercial element of the property on a separate
title would be crucial.
TOGETHER
Together can consider this a regulated first charge
mortgage when over 40% of the overall footprint
is confirmed as being used for residential use.
This would include shared areas, such as a
driveway or garden. Although the max LTV we
offer wouldn’t quite get to 90%, the experience
level would be OK for Together to lend for
this transaction.
C AS E T H R E E
Mortgage with adverse
credit history
UNITED TRUST BANK
This property is a semi-commercial property if
the flat upstairs and the commercial element
underneath are on the same land registry title.
UTB Mortgages does not have a facility to
consider any lending on this at the required
borrowing amount.
One option may be for the couple to purchase
the property using short-term finance such as
client with an annual salary of £40,000,
employed full-time in a managerial role,
wants to purchase a £250,000 property
with a 10% deposit.
However, the client’s credit history includes
several missed payments and a recent County
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