Our client had developed two, high-end houses that were to be retained as long-term investments. They were placed on the market and attracted two tenants that were ready to pay a deposit and sign tenancy agreements.
Funding requirement: the client wanted to maximise the leverage on the properties to allow for further purchases into their portfolio. However, each house was valued at £4,000,000 and they were both on the same legal title, so even with good ASTs the properties were not straightforward ones to place when the client was looking for high gearing.
Facility provided: while the ASTs were strong, the yield was still low given the nature of the properties, therefore a standard high street product was not an option. We found a solution that allowed 75% leverage by using a combination of a fixed rate for 5 years, giving the client peace of mind over the monthly repayments, and ‘top slicing’ from the client’s other income.