Structuring Later Life Lending for a Non-standard Property Purchase Before Sale

What was the situation?

Our clients, a married couple in their seventies, owned a property in Hertfordshire valued at £1.5 million, with a mortgage of £140,000.

They were planning a property move as part of their transition into retirement and wanted to release equity from their existing home to fund the purchase of a distinctive thatched cottage in Suffolk for £620,000, a home they saw as their long-term base.

One client was employed while the other had already retired, with income supported by pension provision, including a joint SIPP of £250,000.

What was the issue?

The clients needed to raise capital from their existing property to fund the purchase, while ensuring the structure allowed for future sale and repayment without restriction. This required a lifetime mortgage that provided both flexibility and control, not a feature available across all lenders.

The purchase property presented its own challenges. Its thatched construction, single-skin walls and reliance on a log burner rather than a conventional heating system had previously resulted in a nil valuation, not uncommon where construction falls outside standard lending parameters.

The case also needed to be structured around a transition into retirement, with affordability supported by pension and SIPP income.

What was the process?

Darren Johncock, Later Life Lending Director at LDN Finance and an award winning later life lending specialist, structured the case across two coordinated elements to support both the purchase and the clients’ longer term plans.

An early repayment charge free lifetime mortgage was arranged on the existing property at 40% LTV, raising circa £500,000. This provided the required liquidity while retaining the flexibility to support the planned exit, allowing the borrowing to be repaid on sale or ported if appropriate.

For the purchase, Darren identified a lender with specific experience of thatched and non standard properties. The case was positioned to ensure the property was understood in the right context, enabling the lender to look beyond the initial nil valuation and take a considered view of the security.

Through direct engagement with senior underwriters at an early stage, Darren shaped how the case was presented and assessed, ensuring it was understood and supported ahead of formal submission.

An interest only mortgage of £340,000 at 50% LTV was secured against the purchase property, structured to align with the anticipated sale of the existing property. Affordability was supported through pension and SIPP income, presented in line with lender criteria.

What was the solution?

This approach enabled the clients to proceed with the purchase of their chosen Suffolk property with confidence and clarity, while maintaining control over their wider financial position.

The early repayment charge free lifetime mortgage provided the required liquidity without restricting future repayment, supporting a clear and flexible exit strategy linked to the planned sale of the existing property. Lending was secured against the purchase property, despite the earlier nil valuation, through careful lender selection and precise positioning of the case.

Importantly, the structure avoided a conventional monthly repayment commitment, aligning with the clients’ preference as they moved into retirement, while allowing them to retain their wider assets, including their pension provision, rather than drawing on these to fund the purchase.

This placed the clients in a strong and flexible position, with a defined route to reduce or fully repay borrowing following the sale of their existing property.

This case demonstrates how later life lending can be used as a structuring tool, enabling outcomes not typically achievable through standard lending routes. Here, it allowed the clients to proceed with the purchase of a non standard property that required careful lender selection and positioning, without drawing on existing assets or taking on a conventional repayment commitment.

It also reflects the type of case Darren is known for, where experience, judgement and careful positioning bring multiple elements together into a single, workable structure.

How LDN Finance can help

Are you exploring the option of gifting money to your children by releasing equity? At LDN Finance we’re here to help you find a solution – no matter how complex your circumstances. Our expert brokers have extensive experience in providing creative solutions to secure large loans for our clients.

We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates.

Get in touch with us to organise an initial consultation.