Delivering auction finance quickly for a first-time landlord

Loan Amount:
£230,000

Property Value:
£320,000

LTV:
75%

It can be difficult for first time landlords to find their way in the BTL market. But this can be even more challenging when an investment is being made via an intense route.

A borrower turned to us for finance for a BTL property that was being bought at auction. This meant we had to move quickly to keep up with the process, while also ensuring their exit strategy sat on solid ground.

Fortunately, by working closely with the broker involved, our underwriter was able to address this deal’s challenges.

Working closely with the broker

As the borrower was a first-time landlord, their lack of experience may be considered too risky by many lenders. Luckily, this scenario is something we come across regularly at MFS, even first time landlords purchasing at auction – so we knew exactly how to deal with it.

Plans were put in place to have additional resources at the ready to help manage the property (and eventual tenants) should they be required. Also, if challenges still persisted, the borrower was willing to hire a property management company.

Outside of these addressed issues, our underwriter saw the borrower’s financial position was sound. As such, they’d likely have no problems in moving onto a long term BTL loan for the exit strategy as well as other options. With a promising outlook, we provided the auction finance in time for the bidding.

Auction demand is on the rise

The auction scene is thriving in 2024¹, which may create many opportunities for property investors and landlords. In fact, BTL investors specifically could benefit from keeping an eye on what’s coming to auction this year.

Some landlords are cutting their portfolios² in the face of a challenging market, and this may only continue in light of recent announcements³. Over the coming months, we may see some landlords turn to auctions to dispose of their assets quickly, and exit the market.

This could result in more stock coming to the market for investors who want to expand. For those, we will be there with bespoke products at the ready to secure BTL assets of all shapes and sizes.