SIRIUS COMPLETES £12.4M BUY TO LET DEVELOPMENT EXIT
17 July 2023
Sirius Property Finance has completed a complex £12.4m limited company Buy to Let mortgage to finance the development exit on a block of 68 flats that the client wanted to hold as a long-term investment.
The loan, which was arranged by Craig Hardiman-Scott and Luke Casey at Sirius, was secured on a scheme of 68 studio and 1-bedroom flats in Chelmsford, Essex.
From the outset, the client’s intention for the scheme was to hold the asset as a long-term investment, adding it to their ever-growing portfolio and, in July last year, Sirius started the refinance process ahead of practical completion of the project in October.
The process began with four different lenders but, with the fallout of the infamous mini-Budget in September impacting the market, the lenders contracted their appetite at Offer stage and the transactions failed to proceed.
Sirius responded quickly, re-structuring the refinance to proceed with just one lender. The client wanted the freedom to sell some units and so a loan of nearly £12.4m was required at 75% LTV, whilst also providing the opportunity for early repayment strategies.
Leveraging the strength of its relationships, and following several meetings, Sirius structured a deal with one lender, with a loan agreed at 75% of the previously completed valuation report on a product that allowed the client to sell up to eight units at a reduced early repayment charge of 1% for the first 12 months. In order to be able to access this loan, the client needed to sell four of the units ahead of completion of the refinance, which was achieved thanks to the tireless work of the team.
The result was that the client was able to raise the funds to pay off the current debt for the development finance, which was structured as both a first and second charge loan, within the agreed time scales for redemption. The refinance also enabled the client to restructure the shares within the company, whilst providing five years of steady income to stabilise the asset.
Craig Hardiman-Scott, Head of Sales at Sirius Property Finance, says: “This case is an excellent example of just what can be achieved when a debt advisor works in true partnership with their client. Because of this partnership, and thanks to the meaningful relationships we have with lenders, we were able to respond quickly to the shifting economic landscape and successfully structure a very large Buy to Let mortgage that enabled the client to achieve their objectives.”
