Turning two into one

Our HNW clients were looking to purchase a 4 bedroom London home. Despite a single freehold title deed the property had been separated into two flats by the vendor. The borrowers planned to remodel the interior of the home back to a substantial single dwelling, with a high-end finish. The couple planned to remain in expensive rented accommodation whilst all works were being completed.

Reviewing the property, location, local property market and proposed renovation plans, it was clear the plans to return the flats to a single home were likely to deliver the seven figure increase in the end value of the property the clients anticipated. The primary borrower had a substantial income from an employer they’d been with some time and a history of receiving a large annual bonus (of which we were able to consider up to 75%). Combined with the second income they met affordability needs. Substantial savings were sufficient to cover the property deposit and renovation costs.

Despite having been separated into two separate flats, the property was originally a single dwelling and the borrowers planned to put it back to this former state, requiring interior remodelling but no major conversion works. Our clients had full architect plans and costings matching the finances they’d set aside, and had already received pre-planning approval. The property would be a single freehold title on completion.

We agreed a part repayment/part interest only solution on a short-term ERC free mortgage that would reduce outgoings. This would enable the client to remain in their current rental accommodation whilst the internal layout was remodelled, then move in making it their main residential home. The increased property value would act as a repayment vehicle. The clients planned to redeem the short term mortgage for a longer term solution once the works were complete and value significantly increased.