Foundation has supported a broker secure funding for a complex holiday let case in Burford, Oxfordshire.
The case involved the purchase of a newly developed holiday let property, part of a six-unit development within a wider renovation project.
The property, valued at £205,000, was being purchased on a freehold basis by an experienced landlord, with a mortgage requirement of £153,700.
The investment case was supported by projected rental income of up to £24,277 per annum. This resulted in an ICR of 176.58%.
Despite these strengths, the case required a specialist lending approach.
While the property was constructed using traditional brick and mortar, its chalet-style appearance presented an unusual security type. Its use as a holiday let also narrowed the owner-occupier market, while occupancy restrictions limited stays to a maximum of eight weeks.
Additional considerations included the property's location on a busy road and limited comparable sales evidence to support the valuation.
Following discussions with Foundation's team, a commercial valuation was commissioned to reflect the property's holiday let restrictions, while standard LTV terms and first-charge security were applied.
Exposure within the development was carefully managed and limited to two units to mitigate concentration risk.
By taking a pragmatic and specialist view of the application, Foundation was able to provide a lending solution that met the client's requirements and enabled the purchase to proceed successfully.
“This case demonstrates the importance of specialist lending when assessing holiday let investments that fall outside standard criteria,” said Nathan Goodridge, head of sales at Foundation.
“While there were a number of factors that required careful consideration, the property's strong affordability, experienced borrower profile and robust rental projections supported a positive outcome.
“By taking a pragmatic approach, we were able to help the broker secure funding for their client and continue making mortgages happen.”
