Breaking down funding for multiple buy-to-let investment strategies at once

case study buy to let rural area

Loan Amount:
£2,028,000

Property Value:
£2,900,000

LTV:
70%

Multiple strategies are available to buy-to-let landlords. Investors can target specific age groups, geographic locations, or types of property. An experienced landlord approached us for help with multiple buy-to-let investments, with a range of selling points at play.

This proved to be a complicated case, however. We not only had to factor in the feasibility of the investments, but we also had to account for a tricky company set up. The borrowers were aiming to refinance their existing portfolio, which fell under a mix of private companies and personal names. They wanted to bring their portfolio together into one limited company, while also raising capital.

Evidently, this deal required a lot of careful planning. Our Regional Sales Manager, Imogen Williams, got to work, making sure all the necessary details were accounted for.

Investing in multiple properties through a range of strategies

The borrower already had several residential properties within their portfolio and wanted to diversify. Investing in multiple properties at once, the borrower was looking at rural locations set in an open countryside, a town with plenty of residential potential, and an urban hub close to a major city.

To ensure these investments went through without a hitch, the Underwriter assigned to the case, Jemma Vaja, dug down into the details to establish that the funds would be used adequately. By working with the client and broker, we saw there was a solid plan for deciding how much money would be used for planning permissions, furnishings, legal costs and the like.

Additionally, we established there were multiple exit strategies available to the borrower. Also, by running multiple affordability calculations, Imogen and Jemma noted there was plenty of potential for the properties on the horizon.

Given these factors, along with the fact that most of the properties already had tenants bringing in income, we were happy to issue the loan.

The pandemic created a fresh wave of new investment strategies

Demand for both rural and urban property rose over the last two years or so. The pandemic led many to reassess their living situations. Workers across the UK suddenly found they could work from anywhere and as such, they started dreaming of greener, more spacious locations.

Many flocked to the countryside and seaside, creating unprecedented demand in places like Cornwall. Of course, as this demand rose, so too did prices and property holders in these regions likely benefitted.

Even those workers who still needed to be close to their offices had options available to them. Many businesses switched to flexible working arrangements. Here, staff would only need to come into their workplaces for a few days in the week. This created a lot of opportunity in certain commuter belts, such as the suburbs of London and towns on the new Elizabeth line.

Landlords may still be able to take advantage of this demand for space. But, they’ll want to do their homework on what regions – and tenants – could be targeted.  To help investors narrow down their options, why not check out our blog where we examine the urban vs rural debate.

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