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When a customer needed a commercial mortgage secured against a mixed-use property that supported both their trading business and their buy to let portfolio, success depended on a deep understanding of how the business and asset operated together.
Introduced by one of Redwood’s long-standing brokers, White Rose Finance Group, Redwood worked with the customer and broker to establish a market rental figure for the commercial premises and put a formal lease in place between the property owner and trading business – enabling the transaction to be structured as a semi-commercial investment using and OpCo/PropCo model.
THE SITUATION
The customer required financing against a semi-commercial property in Liverpool, valued at £565,000. The property comprised four residential flats above a commercial ground floor unit, which was occupied by a business owned by the customer.
Because the commercial space was owner-occupied, no rent was being paid by the trading business. To support the application, the valuation established a market rental figure for the commercial premises and a formal lease agreement was put in place between the customer and the business.
With a lease in place, the transaction adopted an OpCo/PropCo structure, with the trading business operating from the ground floor commercial unit and the property element forming part of the wider asset alongside four residential flats above.
Redwood’s underwriting team and Regional Business Development Manager, Jane Hand, worked closely with David Fine, Client and Projects Manager at White Rose Finance Group, to formalise the lease, allowing for an OpCo/PropCo structure where the rental income was used as the main component of affordability.
THE SOLUTION
Redwood successfully delivered a loan of £403,410 at 71.4 per cent LTV, with completion achieved in under four months.
THE EXPERIENCE
Jane Hand, Regional Development Manager (North and Midlands), said: “This was a great example of how OpCo/PropCo structuring and semi-commercial lending can sit alongside each other in more complex cases. By taking the time to fully understand the trading business and property elements of the deal and the customer’s long-term objectives, we were able to deliver a solution that supported both their immediate needs and future investment plans.”
David said: “Redwood’s personal approach and willingness to look at the detail of a case is what sets them apart. The team took the time to understand the structure and worked collaboratively throughout, which gave us and the customer confidence from the outset. Having direct access to experienced decision-makers made a real difference in getting the deal over the line.”