Case Study –Residential Purchase | Affordability Calculated on Projected Income

Property Value	£2,200,000
Loan Amount	£1,650,000
Location	West London
LTV	75%
Achieved Rate	4.67%
Completed	April 2023
Adviser	Courtney Flockhart

The Client

In early 2022, our clients had identified a property for purchase; however, this transaction fell through, and in late 2022, amid the market destabilisation, their interest rate surged by over 2% from the original secured rate. The elevated standard variable rates, coupled with lenders’ tightening criteria, had significantly impacted affordability, turning a previously straightforward deal into a more intricate one. Moreover, the clients were acquiring a property for which probate had been granted, and the beneficiaries required a prompt exchange to finalise the purchase.

The Solution

We successfully identified a lender who adopted a comprehensive approach to evaluating the client's income. By utilising the latest year's financial figures and averaging them with a projection letter from a senior clerk, we were able to overcome the affordability challenges stemming from elevated background stress rates. Leveraging our extensive network of lender relationships, we engaged directly with the head of underwriting and pre-negotiated the terms of the case before submission, streamlining the process such that only a valuation was required to proceed.

The Henry Dannell Difference

Leveraging our in-depth understanding of the client's income structure, we engaged in a detailed discussion with the bank, which enabled them to adopt a holistic view of the case. Given our expertise in servicing clients of this type, coupled with our active role in assisting the bank with the drafting of their credit policy, they had a more nuanced appreciation of the income structure. This, in turn, instilled greater confidence in their lending decision-making, as they were readily able to demonstrate the upward trajectory and mitigate risk.