Sibling buy-out to raise money for holiday let property mortgage

Sibling buy-out to raise money for holiday let property mortgage

Article by James Blackler Mortgage Adviser

What was the situation?

My client contacted LDN Finance in search of a specialist brokerage firm that are experts in handling holiday let mortgages.

One of three siblings, the client was reaching out on behalf of all of them. The property in discussion is located in a beautiful coastal area of Anglesey in Wales. The house itself was owned by three, who had inherited it after being in the family for many decades.

There had been previous discussions of buying out one of the siblings, therefore the client was looking for enough money to buy out the sibling and then raise additional funds to renovate the property. This way they could maximise the rental return the property could generate as a holiday let business. The loan size the siblings were after was £450,000, and the property was valued at £900,000.

What was the issue?

The clients had previously used mortgage brokers on other transactions but when they approached their most recent broker, they didn’t have any specific knowledge of holiday let options. LDN Finance has years of experience with this type of enquiry, and know exactly what lenders are best to approach, so I knew we’d be able to help!

What was the process?

After understanding their requirements, I was able to present holiday let mortgage products for both personal and limited company/special purpose vehicle (SPV) options within a short period, depending on how they intended to handle their holiday let business.

By knowing which lenders to approach for product comprehensiveness and client circumstances, I was able to move quickly during the period of uncertainty when rates were volatile and lenders were repricing their product ranges.

I liaised with the lender swiftly on providing any additional documentation that was required, ensuring the mortgage offer was issued as quickly as possible. The lender initially returned a lower loan amount than requested, but we subsequently arranged for an additional valuation for the lender-recommended holiday let companies. Due to their knowledge in holiday let complexities, this allowed the mortgage offer to be revised to the full amount.

What was the solution?

The end result was that I was able to secure the clients with the full £450k of lending that they needed to achieve both of their goals; buying out their sibling and providing them with the necessary capital to refurbish the house before the busy summer booking period this year.

A loan of £450,000 was achieved, equating to 50% loan to value (LTV) at a competitive rate at just over 3.5% fixed for 5 years. This fixed period meant that the clients have a very cost-effective way of financing the property for the foreseeable future.

Once we had secured the loan for the clients, they could then proceed with lining up the transfer of equity to have one of the siblings removed from the title deeds as per their intentions.

Lending solutions with LDN Finance

Are you looking to buy out a sibling or purchase a Buy-To-Let property and need some advice? We’re here to help you find a solution – no matter how complex your circumstances. At LDN Finance, 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.

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Our happy clients

Excellent and outstanding professional service from start to finish. From offering as many options as possible, to explaining to me very quickly what the benefits are and what I should really be thinking about moving forward. Thoroughly recommend.

Mr. M

July 2021

5 Stars! The LDN team supported us purchasing our family home, without their support and as an expat it would have been very difficult to obtain our new home in the UK. I would totally recommended them.

Mr. S

August 2021

Johnny Martin held our hands through the entire process calmly and professionally. Brilliant service, efficient and swift in response to everything. He made the entire journey uncomplicated even when the bank made it complicated. Highly recommended.

Mr. H

July 2021

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