Buy-to-Let
Buy-to-Let
A buy-to-let mortgage is designed for landlords investing in residential property to generate rental income. Unlike residential mortgages, these loans are assessed primarily on the property’s rental yield rather than the borrower’s personal income, often resulting in more competitive rates since lenders factor in the rental income achieved by the asset.
Financing is available for a wide range of residential investments, including HMOs and multi-unit freeholds. Whether expanding a portfolio, refinancing existing assets, or consolidating debt, we secure tailored solutions that align with investment goals and market conditions.
Product Highlights
Case Study
Complex HMO Buy-to-Let Refinance
Challenge:
A client approached Longstride Capital Advisory with the opportunity to purchase a £760,000 six-bedroom HMO property in a high-demand university area. The property required extensive refurbishment, including the installation of two additional bathrooms, upgraded kitchen facilities, and compliance work to meet HMO fire safety and space regulations. The renovation costs were estimated at £120,000.
Traditional lenders were unwilling to provide finance due to the property’s condition. Since the client planned to refinance onto a buy-to-let mortgage post-renovation, a bridging loan of £760,000 was required to complete the purchase and fund the works.
Solution:
Longstride Capital Advisory secured a 75% LTV bridging loan, covering £570,000 of the purchase price, with an additional £120,000 allocated for refurbishment costs. The loan was arranged on an interest-roll-up basis at 0.85% per month for a 12-month term, allowing the client to focus on completing renovations without immediate monthly payments.
The estimated GDV upon completion of the works was £900,000, and the client planned to refinance onto a long-term buy-to-let mortgage based on the improved value and rental income potential. We assisted in identifying lenders who were comfortable with the HMO structure and the expected rental returns.
Outcomes
- Fast Access to Capital: The bridging loan enabled the client to act quickly, securing the property and funding renovations without delays.
- Seamless Transition to Buy-to-Let Finance: With a clear refinance plan in place, the client will secure long-term financing once the property was fully compliant.
Increased Property Value: The expected GDV of £900,000 and projected rental income of £6,000 per month positioned the property as a high-yielding investment.
