Case Study –Raising Capital to Purchase a Neighbouring Property

The Client

A homeowner with an unencumbered residential property valued at more than £1 million wanted to raise capital to purchase the neighbouring property with cash.

Being able to proceed without acquisition finance would strengthen the client’s position as a buyer.

There was, however, an additional consideration.

The existing property included a converted outbuilding on the same title, which the client intended to let occasionally on a short-term basis.

The Solution

Lender selection was particularly important because residential mortgage providers can take different approaches to short-term letting, with some restricting it or requiring prior consent. We therefore considered the capital-raising requirement alongside the client’s intended future use of the property. A three-year fixed-rate mortgage at 3.85% was secured with a lender whose criteria permitted the proposed occasional short-term letting without requiring prior approval. The capital release then enabled the client to approach the neighbouring property purchase as a cash buyer.

The Henry Dannell Difference

The strongest solution was not simply the lender prepared to provide the required capital. It needed to support the client’s wider plans for the property as well. By identifying the short-term letting requirement before approaching the market, we were able to select a lender whose criteria aligned with both the immediate acquisition and the intended future use of the existing home. For more considered borrowing requirements, the detail that sits around the mortgage can be just as important as the amount being raised. Your home may be repossessed if you do not keep up repayments on your mortgage. Short-term letting is subject to lender criteria and other applicable requirements.