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The Client’s Situation
A professional property investor approached us looking to refinance a 5-bedroom, 5-ensuite HMO which was fully let on a 5-Year YMCA Property Lease, generating £2,750 per calendar month.
The client’s primary objective was to refinance with a lender that would allow the property to be leased out, then raise capital from the property to reinvest in further acquisitions and continue expanding their portfolio.
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The Challenge
- The tenant, being a social care provider, required a lender comfortable with this type of lease structure
- We required a lender that would consider valuing the property based on an investment valuation, rather than a standard bricks-and-mortar valuation
- Securing competitive terms despite the specialist nature of the asset
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Our Solution
We were able to find a specialist lender with experience in properties with a secure property lease in place with YMCA. The lender could also accept an investment valuation on a heavily adapted HMO.
By structuring the case correctly, we were able to secure an investment valuation that reflected the property’s income-producing nature rather than just comparable sales, all whilst still financing the property at a competitive interest rate.
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The Result
The refinance was successfully completed, enabling the client to:
- Repay their existing mortgage in full
- Raise £26,400 in additional capital
- Secure competitive terms fixed for 5 years
- Strengthen their liquidity to reinvest in further property opportunities
This outcome demonstrates how the right lender and valuation method can significantly improve leverage on income-producing HMOs, particularly where properties are let to supported living providers.
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How can Advocate Finance help?
If you are looking to purchase or already own a HMO or property let to a social housing provider like the YMCA and are looking to refinance or raise capital, we can help structure the most effective solution for your circumstances.
We work with a wide panel of specialist lenders to ensure your property is assessed correctly and your borrowing potential is maximised.
We provide a FREE assessment on all our services.
Please contact me directly for more information, or use the Get in Touch With Us Today feature at the bottom of this page.
