A recent case shows how Foundation's specialist holiday let mortgages can work through complexity, after the lender helped a broker secure funding for a complex investment property in Burford, Oxfordshire.
The case involved the purchase of a newly developed holiday let property in Burford, forming part of a six-unit development within a wider renovation project. The property, valued at £205,000, was being purchased on a freehold basis by an experienced landlord, with a mortgage requirement of £153,700.
The investment showed strong affordability credentials, supported by projected rental income figures from Sykes of between £19,863 and £24,277 per annum. That resulted in a healthy interest coverage ratio (ICR) of 176.58%, while confidence in the development was further supported by Foundation having previously completed another case on the same site.
Despite these strengths, the case required a specialist lending approach. The property was constructed using traditional brick and mortar, but its chalet-style appearance presented an unusual security type. Its use as a holiday let also narrowed the owner-occupier market, while occupancy restrictions limited stays to a maximum of eight weeks.
Additional considerations included the property's location on a busy road, which raised potential marketability concerns, alongside exposure and concentration risks within the development. Limited comparable sales evidence was available to support the valuation, and the building warranty status was unknown, factors that reduced appetite among some lenders.
Following discussions with Foundation's team, the broker identified that Foundation's specialist holiday let proposition was well suited to the case. A commercial valuation was commissioned to reflect the property's holiday let restrictions, while standard loan-to-value terms and first charge security were applied. Exposure within the development was carefully managed and limited to two units to mitigate concentration risk.
Taking a pragmatic, specialist view of the application allowed Foundation to provide a lending solution that met the client's requirements and enabled the purchase to proceed. The case reflects how a tailored approach to holiday let propositions can help deliver positive outcomes for landlords purchasing more complex investment properties.
"This case demonstrates the importance of specialist lending when assessing holiday let investments that fall outside standard criteria," said Nathan Goodridge, head of sales at Foundation.
"While there were a number of factors that required careful consideration, the property's strong affordability, experienced borrower profile and robust rental projections supported a positive outcome. By taking a pragmatic approach, we were able to help the broker secure funding for their client and continue making mortgages happen."
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