Lockdown Case Studies
Scottish Development Company
Recently completed on a loan worth a total of £584,500, gross income £8767.50 – this included a 1% broker fee.
The applicants are experienced property developers who have developed the former Panmure Hotel in Monifieth in Scotland into 9 luxury apartments https://thorntons-property.co.uk/Panmure-Apartments-Tay-Street-Monifieth-New-Build
Due to the slower property market during the pandemic, the clients decided to let two of the flats and finance them in order to repay JV investors. As part of the deal they also financed a property that they were taking in exchange on a different development. The purchasers were doing a straight swap with their current residential so the clients purchased their residential property on a BTL basis, thus adding that property into their portfolio.
The following difficulties were overcome by excellent client management by the AR and coordinated working with the BDM at Paragon:
- Properties are in Scotland with a limited lender market
- Security was held in a development company – this was surpassed by setting up a new SPV with the development company as 100% shareholder
- The clients had no BTL experience – they had requested more properties initially but compromised on the maximum available by Paragon
- LTV was restricted at underwriting to 70% due to the in-experience
The case was presented to us April and completed 11th August, however the actual application with Paragon wasn’t submitted until 3rd June, so was only actually a 10 week process including some complicated legals.
We are hopeful that we will now be able to place additional properties from a different development for the clients with Paragon moving forward.
Buy to Let Purchase
Client purchased a 3 bed flat in Watford for £325,000, this included a share of the freehold. As a high rate tax payer, the client decided to purchase his first BTL in a limited company.
As a prime case, following a full fact find with the client, the case was submitted to The Mortgage Works on 2.84% fixed for two years.
The application was submitted on 10th June and completed 18th August in the middle of a pandemic.
Gross total fee income £1689.37.