Collaborative approach supports refinancing of nine bedroom assisted living HMO

Refinancing HMOs in the assisted living sector can be complicated, requiring a lender that understands both the asset and the social value it provides. This was the challenge faced by a property developer seeking a term loan to replace an existing bridging facility on a specialist HMO.

Already an existing Redwood Bank customer, with two HMO properties financed by the Bank, the developer worked with Rokform Finance, part of the Rokform Group, to identify the most suitable solution. Rokform quickly concluded that Redwood was best placed to support the customer’s third property, building on an already strong relationship.

THE SITUATION

The customer required a term exit from a bridging loan provided by Rokform Capital, secured against a nine-bedroom residential HMO in Bristol, along with additional capital for forward investment. The property, valued at £900,481, had already undergone extensive renovation works.

The developer specialises in creating properties for the care sector and had previously drawn a total of £1.4 million in funding from Redwood.

This HMO is let on a long-term lease to a care provider delivering high-quality supported living accommodation for adults aged 18 and over with learning disabilities and autism. The organisation focuses on empowering individuals to live fulfilling and independent lives, either within their own homes or shared living environments.

Given the nature of the tenants and the services provided, Redwood assessed the case as a residential investment mortgage rather than a commercial mortgage.

Throughout the process, Redwood worked closely with Rokform. In addition to providing financial services to developers, Rokform is actively involved in property development itself, giving the team first-hand insight into the challenges and demands of the market.

THE SOLUTION

Redwood approved a residential investment mortgage of £561,000 with a 2 per cent fee on a two-year fixed rate at 6.49 per cent and an LTV of 62.3 per cent. The loan will then roll on to a base rate at +3.49 per cent variable for the remainder of the 20-year term.

Thanks to the property’s EPC rating, the loan also qualified for Redwood’s Green Cashback Reward, providing a 0.20 per cent cashback incentive.

THE EXPERIENCE

Ian Tudor, Business Development Manager at Redwood, said: “This was a great example of how a strong broker relationship and an existing customer partnership can come together successfully. We were delighted to provide a suitable long-term solution for the customer, particularly one that also qualified for our Green Cashback Reward.

“Supporting projects in the assisted living sector is especially rewarding and we were pleased to work collaboratively with Rokform to deliver certainty and clarity throughout the process.”

Joel Reynolds, Lending Relationship Officer at Redwood, said: “It was a real pleasure working alongside Rokform on this case. A lot of time and effort went into preparing and packaging the deal for our underwriting team, and it was very much a joint effort.

“Everyone involved pulled together to make sure the customer received the right outcome and it was great to see that teamwork result in a successful completion.”

Kelly Flanagan, Senior Mortgage and Protection Broker at Rokform Finance, said: “We were delighted that Redwood was able to support our customer with the latest addition to their portfolio. Retaining all of the customer’s finance with one lender makes the facilities far simpler and easier to manage.

“Redwood demonstrated flexibility throughout the process and responded quickly when the customer requested an increase in the borrowing amount. That responsiveness made a real difference in helping us achieve the right solution.”