CASE STUDY – Securing Finance When Standard Channels Failed

A self-employed tradesperson based in Cornwall had identified a suitable ex-local authority property as their first step onto the property ladder. With a 10% deposit and a relatively modest borrowing requirement, the purchase appeared straightforward.

Their aim was to raise approximately £500,000 against an anticipated end value of £750,000, enabling them to progress with the construction of their new home.

The project was complex, not only because of the financial requirements but also due to the construction methods being used, which required careful consideration from potential lenders.

The client had found it difficult to secure financing due to the intricate nature of the project. The combination of historical land purchases, merging multiple titles, managing access, and ongoing living costs created challenges for affordability assessments. Additionally, the self-build nature of the project and the construction methods proposed meant that many traditional lenders were unable or unwilling to provide a solution that matched the client’s timeline and cashflow requirements.

Drawing on my eight years of specialised experience in self-build lending and my established relationships with lenders, I took a hands-on approach to finding a suitable solution. I engaged directly with lenders to discuss the merits of the project, highlighting the client’s strong planning, experience, and financial position.

By carefully structuring the application and leveraging my network of contacts, I was able to identify lenders who could accommodate the unique aspects of the build while offering competitive terms. Throughout the process, I provided detailed guidance on managing cashflow and structuring the borrowing to align with the construction schedule, ensuring the client had the flexibility to progress the project without financial stress.

A traditional self-build mortgage was successfully secured at a competitive rate, with a term tailored to suit the project and the client’s cashflow requirements. This allowed the client to move forward confidently with construction, knowing that their financing was structured to meet the demands of the build.

The solution not only enabled them to finally realise a home they had been planning for many years but also provided reassurance that the project could be completed smoothly.

The client was extremely grateful for the guidance and support throughout the process, and they are now on track to move into their dream home, excited to see years of planning and effort come to fruition.The property’s condition presented an opportunity rather than a concern for the client. Their professional background and network of tradespeople meant they were well-positioned to undertake gradual renovation work whilst living in the property.

However, the initial mortgage application hit an unexpected obstacle. A high street lender declined the case based on the property’s condition, and the client’s broker advised that the situation was unresolvable. The recommendation was to withdraw from the purchase and seek an alternative property. This presented a significant problem, the client had already incurred costs on conveyancing and surveys, and properties at this price point in the area were scarce. Simply moving on to another purchase wasn’t a practical solution.

A family member, a previous client of mine, suggested they seek a second opinion on the case. When they approached me, I recognised immediately that the previous broker’s assessment had been premature. Lender criteria on property condition vary considerably across the market. Whilst one mainstream lender may classify a property as un-mortgageable, other lenders operate with different risk parameters and may find the same security entirely acceptable, particularly for standard residential lending.

I conducted a comprehensive review of lenders whose criteria aligned with both the client’s financial profile and the property characteristics. The key was matching the specific circumstances of the case including a first-time buyer with a solid deposit, stable self-employed income, and a property requiring cosmetic rather than structural work, with a lender whose underwriting approach would accommodate these factors.

The solution came through a mainstream high street lender that assessed the property as acceptable security in its current state. I secured a two-year fixed rate mortgage at 90% LTV over a thirty-year term, with competitive pricing that reflected standard residential lending rather than specialist or adverse criteria. This outcome enabled the client to proceed with their purchase without compromise on either the property or the financial terms.

The result was significant for the client beyond simply securing the mortgage. They retained the property they’d committed to, protected their financial outlay on the transaction, and obtained mainstream lending terms that provided a stable foundation for their renovation plans. The case demonstrated that thorough market knowledge and persistence in exploring alternative lender options can identify solutions where initial assessments suggest none exist.

Richard Green ​​​CeMAP CeRER, Mortgage, Equity Release ​& Protection Consultant