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The Client’s Situation
The property was a mixed-use asset consisting of a ground-floor retail unit, let on a fully repairing and insuring lease (FRI) to the client’s trading business (a convenience store), with five self-contained flats above, let as short-term accommodation. The client was an experienced landlord and business owner looking to refinance this semi-commercial/mixed-use property in order to release funds for further investment.
The Challenge
Because the asset was mixed-use, most lenders based borrowing on the investment/block value of the flats rather than on their individual saleable value. In this case the investment/block value came in at £785,000, which constrained how much the client could raise and limited their ability to invest further.
Our Solution
We leveraged our specialist market access and identified two lenders who were willing to value the flats on an aggregate value basis — treating each flat individually as long-lease sales rather than as part of a single block. Each flat had to be over 30 m² and capable of independent sale. On that basis we secured an aggregate valuation of £1,115,000, which represented an uplift of £330,000 over the block/investment value.
The Result
Thanks to the higher valuation, the client was able to refinance, pay off the previous borrowing, and raise additional capital for further property investment. The use of the aggregate value approach unlocked significantly more borrowing power than would have been available otherwise.
How We Can Help You
If you own a semi-commercial or mixed-use property and want to maximise how much you can borrow, Advocate Finance can help identify lenders who will apply the aggregate value method rather than standard block/investment valuations. This can substantially improve your refinancing or capital raising outcome.
