Introduction
We recently helped our customer refinance a buy-to-let property in Dorset, moving from short-term bridging finance onto a long-term mortgage.
The main challenge was that the investment consisted of two separate residential properties held under a single freehold title. The properties were also owned through a limited company, which meant we needed a lender comfortable with the ownership structure and property arrangement.
After researching specialist buy-to-let lenders and discussing the case in advance, we arranged a five-year fixed-rate, interest-only mortgage with Aldermore, allowing our customer to repay the existing bridging finance.
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The Scenario
Our customer was an established landlord and self-employed business owner who held an investment property through a limited company structured as a Special Purpose Vehicle (SPV).
An SPV is a limited company established specifically for property investment.
The property in Dorsetconsisted of two separate residential dwellings registered under one freehold title.
Our customer had an existing bridging loan secured against the property and wanted to replace this with a longer-term buy-to-let mortgage.
Bridging finance is generally used for short-term borrowing, often when funding is needed before a longer-term mortgage can be arranged.
The customer’s requirements were:
- Repay the existing bridging loan.
- Retain both properties within the limited company.
- Arrange an interest-only buy-to-let mortgage.
- Secure a five-year fixed-rate product to provide greater certainty over borrowing costs.
- Arrange borrowing over a 30-year mortgage term.
Our customer received income from their business alongside rental income from their property investments.
Although they had an established business and a good credit history, the unusual property configuration meant that finding an appropriate lender required more detailed research.
The Challenge
The main difficulty was identifying a lender willing to accept two separate residential properties on one legal title while also allowing the existing bridging finance to be refinanced through a limited company.
Two Properties on One Title
Many buy-to-let lenders are comfortable lending against a single residential property held on its own legal title.
However, where two separate dwellings share one title, the lender must assess whether the entire property arrangement meets its security requirements.
Some lenders restrict this type of lending or require properties to be held on separate titles.
This meant that lenders offering competitive buy-to-let mortgage products were not necessarily suitable for our customer’s property.
We needed to identify a lender whose criteria specifically accommodated the arrangement.
Refinancing an Existing Bridging Loan
The customer also needed to repay existing short-term borrowing.
Lenders can have different requirements when refinancing bridging finance, including how they assess the property and the reason for the original borrowing.
We therefore needed a lender that could consider the remortgage from bridging finance alongside the unusual property title.
Limited Company Ownership
The properties were held through an SPV limited company rather than in the customer’s personal name.
This introduced another consideration because the lender needed to accept the company structure as well as the proposed borrowing.
The challenge was finding one lender whose criteria accommodated all three requirements, rather than a lender that could address only one of them.
What We Did
We started by reviewing the property arrangement, existing borrowing and company structure to establish which lenders might consider the application.
As part of our assessment, we reviewed the available financial information, including the customer’s self-employed background, company accounts and rental income.
We also examined the property title information to understand how the two dwellings were registered.
Our research focused on specialist buy-to-let lenders that could consider:
- Two separate residential properties on one legal title.
- Borrowing through a limited company SPV.
- Refinancing existing bridging finance.
- An interest-only mortgage over the required term.
Following this research, we identified Aldermore as a potential solution.
Importantly, rather than submitting the application and waiting to see whether the property would be accepted, we contacted the lender and its Business Development Manager (BDM) in advance.
We discussed the unusual title arrangement and obtained confirmation that the property configuration could be considered under the lender’s specialist underwriting criteria.
This advance discussion was particularly important because the property itself, rather than the customer’s credit history, was the main obstacle.
Once we had established that the lender could consider the arrangement, we prepared the application with the relevant supporting information.
This included rental income evidence, company accounts, SPV company details and property title plans.
By establishing the lender’s position before submission, we reduced the risk of pursuing an application with a lender whose property criteria would not accommodate the security.
The Solution
We arranged a limited company buy-to-let mortgage with Aldermore.
The mortgage was structured on an interest-only basis over 30 years, with an initial five-year fixed-rate period.
This allowed our customer to replace the existing bridging facility with longer-term borrowing while retaining both properties through the existing SPV.
The interest-only structure meant that the regular mortgage payments covered interest rather than reducing the outstanding capital balance. The capital would therefore still need to be repaid at the end of the mortgage term.
The selected product also included an assisted legal package and a free valuation, helping to reduce the initial costs associated with arranging the remortgage.
Why This Solution Worked
Aldermore was suitable because its specialist lending criteria could accommodate the combination of circumstances involved in this application.
The important factors were:
- The lender could consider two separate residential dwellings registered under one title.
- The existing bridging loan could be refinanced onto a longer-term buy-to-let mortgage.
- The lender could accept the SPV limited company structure.
- The proposed borrowing could be arranged on an interest-only basis over the required term.
The advance discussions with the lender were an important part of establishing that the unusual property arrangement would be acceptable.
Rather than focusing solely on the mortgage amount or rental affordability, we needed to establish that the proposed security met the lender’s requirements.
The Result
Our customer successfully refinanced the existing bridging loan onto a long-term buy-to-let mortgage with Aldermore.
The new mortgage was arranged over 30 years, with an initial five-year fixed-rate period and interest-only repayments.
This enabled our customer to retain the two investment properties within their limited company while replacing the short-term borrowing with a mortgage more suited to their longer-term plans.
Most importantly, we found a lender willing to accept the two dwellings on a single freehold title without requiring the properties to be separated into individual titles.
What This Case Shows
Having two residential properties on one legal title does not automatically prevent a landlord from securing a buy-to-let mortgage.
However, the arrangement can restrict lender choice, particularly when combined with limited company ownership or existing bridging finance.
This case demonstrates the importance of understanding a lender’s property and underwriting criteria before submitting an application.
Discussing an unusual property arrangement with a lender in advance can help establish whether the application is likely to meet its requirements and avoid unnecessary delays.
Need Help Remortgaging from Bridging Finance?
If you are looking to refinance a bridging loan onto a longer-term buy-to-let mortgage, or your property has an unusual title arrangement, Kerr & Watson can review your circumstances and research suitable options.
As an independent, whole-of-market mortgage broker, we help landlords with specialist buy-to-let mortgages, including limited company borrowing and properties that fall outside standard lending criteria.
Contact Kerr & Watson to discuss your buy-to-let remortgage and the options available for your property.
