Foreign national completes complex buy-to-let auction purchase within tight deadline

case study foreign international auction property

Loan Amount:
£195,000

Property Value:
£305,000

LTV:
64%

Initial Circumstance

A new foreign national client reached out to MFS seeking auction finance, after finding us online. The client was looking to purchase a non-trading Bed & Breakfast with restaurant commercial space underneath. The property was in a prime location in Great Yarmouth.

Before the property can be utilised to its full potential however, it requires a substantial amount of refurbishment works. The necessary renovations require planning permission. The client was looking to keep the commercial assets in play, whilst applying for the necessary change of use and planning permission to convert the B&B into residential apartments.

As the property was bought via auction, we had to move quickly to get everything ready before the auction house’s deadline.

MFS Solutions

The client was assigned to Roger Taylor, our dedicated underwriter, who got to work on gathering all the information necessary to get the deal through. Due to our long-standing relationship with our extensive panel of valuers, we were able to get the valuation completed quickly.

The prime location of the property provided us with the confidence to move forward. Especially when we discovered the valuation report confirmed a higher value than the client paid at auction.

On top of this, the client had two potential exit strategies. Should planning permission be granted, they intended to use development finance to repay the bridging loan and convert the asset.  If permission was not granted however, we remained confident that the property could be sold on for a profit.

Benefits

Our expertise and knowledge of the industry allowed us to get this deal done in a timely manner, whilst keeping the client comfortable throughout the process. As we underwrite from day 1, the client was assured they’d be guided from start to finish.

With a commitment to communication, we’ll never leave brokers in the dark. Where exit strategies are not 100% clear – such as where planning permission has not yet been granted – we’ll work with the client to find alternatives or backup solutions to their timeline.

With our experience of working with multiple parties, from legal experts to valuers, we were able to push through the hurdles we came across. This deal was completed within the tight deadlines involved, keeping everyone involved happy along the way.

Interested in learning more?

Property auctions became extremely popular as the UK moved through the pandemic. During the earliest stages of the lockdown, almost 400,000 housing sales were stalled. As such, pent up demand was released when relative normality returned.

According to Auction Houses London, the number of lots sold per auction spiked in recent months, with all property auctions selling at least 81%+ of their lots between May 2020 and March 2021.

At MFS, we regularly receive enquiries from brokers trying to find out how their clients can use our fast bridging loans to complete their auction purchases quickly. Given the intense demand within the market, we put together a Guide to Property Auctions which breaks down everything you need to know, including:

  • Why people purchase properties from auctions and the methods involved
  • How properties bought in an auction can be utilised – from conversions to expanding a portfolio
  • What to do on the day of bidding and where to find the best auction houses in the UK

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