Acquiring new property in a buoyant property market

Gross Loan Amount:

£560,000

Property Value:

£750,000

LTV:

75%

Initial Circumstances

Two weeks before the end of June, one of our returning brokers introduced us to a new client who was in urgent need of funding. The client had decided to invest in a buy-to-let property in Stevenage, to take advantage of the stamp duty holiday.

Upon looking at the client’s case, we realised that they had lots of previous experience with buy-to-let property investment, having a portfolio of Northern properties under their belt. Despite the tight ten-day deadline, we knew we would be able to provide the funds by the stamp duty holiday deadline and were happy to assist in saving the client £15,000 of stamp duty fees.

MFS Solutions

With such a large saving at stake, we understood the importance of moving quickly with this case. The MFS underwriter was able to get in contact with one of our trusted panel members to get a valuer to the property the next day. Due to our longstanding relationship with the valuer, and the urgency of the case, we received the figures over the phone. This meant the underwriter could quickly instruct the legal side to ensure we would meet the reduction deadline. We received a physical copy of the report later in the week.

However, unfortunately, a complication did arise. The seller’s solicitor was taking longer than expected during the final stages of the case which caused the completion to miss the stamp duty deadline. We instantly got in touch with the borrower to discuss the next steps and to find a solution that worked for our client.

All parties had to work closely to find a solution and eventually came to an agreement. The seller’s solicitor arranged a gift deposit to cover the stamp duty charges. We were then able to complete the day following the deadline – meaning our client could stay on their schedule to utilise their new buy-to-let property.

The Benefits

Due to our bespoke bridging loans, good relationship with our panels, in-house and external funding lines, and our experience in complex circumstances, we were able to complete the very next day.

By using alternative finance in the form of a buy-to-let loan, the gifted amount was sufficient to cover the unforeseen stamp duty charges, and this did not affect the lending speed. If the client had proceeded using traditional finance such as a buy-to-let mortgage, the gifted deposit would have needed to be declared to the lender, potentially delaying the completion deadline even further.

The broker has a very good relationship with their MFS underwriter, having worked together on several property investment deals in the past and we look forward to working with them again in the future.