The context
The clients were experienced portfolio landlords with an established track record in property development and operational management. They required funding for a semi-commercial acquisition alongside the refinancing of an existing PBSA asset.
The semi-commercial property had non-compliant extensions carried out by a previous owner and was being sold by receivers. The PBSA asset had a title restriction preventing remortgaging or letting to non-students, as well as a small commercial unit at ground-floor level.
What needed to be considered
For the semi-commercial property, the non-compliant extension required a clear route to remediation while the receiver-led sale added further complexity.
For the PBSA, the title restriction needed to be considered in relation to the long-term position. It was established that the restriction could be removed in a timeframe shorter than the proposed loan term.
Our approach
We identified a lender able to accommodate both assets and involved senior management from the outset so that the principal issues were addressed early.
For the semi-commercial property, we presented the clients’ track record alongside the wider application. A retention was held from the loan for potential remedial works, giving the lender protection while allowing the purchase to proceed. Planning approval was secured one month after drawdown, at which point the retention was released.
For the PBSA, we established that the title restriction could be removed within a shorter period than the loan term. We therefore agreed a pre-arranged interest-rate reduction once the restriction was lifted.
The outcome
The £11.6m facility completed at 75% LTV over a five-year term, funding both assets while addressing their individual legal, planning and lending considerations.
Planning approval for the semi-commercial property was secured within one month of drawdown, enabling the retention to be released without delay. The agreed rate reduction on the PBSA provided a clear route to lower financing costs once the title restriction was removed.
