£927k Term Loan Secured for 14-Bed HMO

An experienced landlord approached us with a recently refurbished 14-bed student HMO in the Midlands. The property was split into two fully self-contained 7-bed flats, each with its own HMO license, all on a single title and designed to the highest standard. Despite the strength of the asset and the borrower’s track record, their initial application through another broker had hit a hurdle and stalled. The landlord needed a finance broker who could step in quickly, navigate a minor credit issue, and secure the right funding solution.

The Problem

The borrower had been working with another broker, but their chosen lender declined the deal due to a missed mortgage payment in the borrower’s credit history. It was a minor issue, in our opinion which should not have delayed or derailed the application.

The landlord was also aiming for a 75% LTV solution. Upon receipt of the valuation, the lender flagged a near 20% difference between the market value and the 180-day valuation and as a result, wanted to offer only 65% LTV, which didn’t work for the borrower’s plans.

The Solution

We reviewed the full case and repositioned it with a suitable lender. The asset itself was of an incredibly high standard with 14 en-suite bedrooms across 362 square metres, strong income potential and a clear local demand from an experienced and prominent landlord.

By leaning into our lender relationships and focusing on the strengths of both the asset and the borrower, we were able to negotiate a higher LTV. Despite initial concerns around the valuation, we secured agreement for a 70% loan, which the client was pleased with as it was the right balance between risk and value.‍

The Results

✓ £927,000 term loan secured at 70% LTV

✓ Case completed within 12 weeks, despite prior delays

✓ Historic credit issue overcome, thanks to correct positioning

✓ No need for additional asset leverage or portfolio restructuring

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At Merryoaks, we focus on solutions that work in the real world. Whether it’s navigating credit history, valuation challenges or lender concerns - you name it. We’ve seen it all and know how to guide deals through even the toughest situations. If you need help with your next project, let’s have a conversation.

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