The case demonstrates our commitment to making mortgages happen for brokers and landlords seeking finance for specialist properties.
The case involved the purchase of a newly developed holiday let property in Burford, Oxfordshire, forming part of a six-unit development within a wider renovation project. The property, valued at £205,000, was being purchased on a freehold basis by an experienced landlord, with a mortgage requirement of £153,700.
The investment demonstrated strong affordability credentials, supported by projected rental income figures from Sykes of between £19,863 and £24,277 per annum. This resulted in a healthy interest coverage ratio (ICR) of 176.58%, while confidence in the development was further supported by us having previously completed another case on the same site.
Despite these strengths, the case required a specialist lending approach. While the property was constructed using traditional brick and mortar, its chalet-style appearance presented an unusual security type. Its use as a holiday let also narrowed the owner-occupier market, while occupancy restrictions limited stays to a maximum of eight weeks.
Additional considerations included the property's location on a busy road, which raised potential marketability concerns, along with exposure and concentration risks within the development. Limited comparable sales evidence was available to support the valuation, and the building warranty status was unknown, creating further challenges that reduced appetite among some lenders.
Following discussions with our team, the broker identified that our specialist holiday let proposition was well suited to the case. A commercial valuation was commissioned to reflect the property's holiday let restrictions, while standard loan-to-value terms and first charge security were applied. Exposure within the development was carefully managed and limited to two units to mitigate concentration risk.
By taking a pragmatic and specialist view of the application, we were able to provide a lending solution that met the client's requirements and enabled the purchase to proceed successfully.
The case demonstrates our commitment to supporting brokers with flexible specialist lending solutions and highlights how holiday let propositions can help deliver positive outcomes for landlords purchasing more complex investment properties, making mortgages happen.
Nathan Goodridge, Head of Sales added:
“This case demonstrates the importance of specialist lending when assessing holiday let investments that fall outside standard criteria. While there were a number of factors that required careful consideration, the property's strong affordability, experienced borrower profile and robust rental projections supported a positive outcome. By taking a pragmatic approach, we were able to help the broker secure funding for their client and continue making mortgages happen."
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