TAB has completed a £458,000 semi-commercial mortgage, refinancing an existing TAB bridging loan on a mixed-use property in Yeading, Hillingdon, west London.
The three-storey, mid-terrace building has a ground-floor shop. The upper floors, formerly a maisonette, now hold four self-contained studio flats. The property is fully occupied, and its rental income services the new semi-commercial mortgage.
The borrower bought the property as a long-term investment and asked TAB to move its bridging facility onto a commercial mortgage. It also wanted to release surplus capital for working capital and future investment opportunities.
TAB provided the funds as a first-charge commercial mortgage over a 60-month term at 69.4% LTV.
Underwriting raised five issues. The commercial tenant is a related operating company, and the rent on the commercial element sat above market rent. The property’s rent payment history showed minor anomalies, a fire risk assessment was outstanding, and a historic leasehold title still appeared on the records.
However, TAB had an existing relationship with the borrower, and its underwriting team received satisfactory explanations for the payment history anomalies. It confirmed that the historic leasehold title did not affect the property’s value, and the title is set to be removed.
TAB made the outstanding fire risk assessment a post-completion condition and underwrote the semi-commercial mortgage on market rent rather than the higher passing rent.
Business development manager Gary Melville (pictured) worked on the case for TAB. Harry Hepworth, a commercial broker at Berkshire Finance Group, introduced it.
“There aren’t many lenders who offer mortgage products on mixed-use properties,” said Melville. “There are even fewer who will look at deals that present additional difficulties in the form of related-party tenants or anomalous rents. We were able to take a pragmatic approach to the loan by, for instance, underwriting the property on a sustainable market rent basis. We also gained comfort from the fact we had an existing relationship with the borrower.
“We are seeing greater demand from landlords for longer-term finance following a bridge, particularly where they want to retain income-producing mixed-use assets as investments. We expect semi-commercial deals to become an increasingly important part of our business.”
“As well as being a bridging specialist, TAB is a pragmatic lender capable of delivering commercial mortgages at bridging speed,” noted Hepworth.
“The new facility provides the borrower with longer-term finance while retaining the property as an investment. Rental income from the fully occupied mixed-use property will service the mortgage throughout the term. Gary and the wider TAB team did a great job – they really are bringing momentum to lending.”
If you’re exploring bridging or development finance, get in touch and we can connect you with the right lender.
