Releasing capital after creating value in an HMO
The challenge
Our client had purchased a property below market value and completed substantial refurbishment works to turn it into a high-quality HMO.
The works significantly changed both the condition and income potential of the property.
The client now wanted to refinance and release some of the capital they had invested so they could move onto their next project.
There was one major obstacle.
The property had been owned for less than six months, and a number of lenders would either not consider an early remortgage or would base lending around the original purchase price rather than the property's improved market value.
That would have severely restricted the amount the client could raise.
What we did
We searched specifically for lenders comfortable with recently acquired and improved HMO properties.
Instead of approaching lenders whose criteria would automatically restrict the valuation, we identified a specialist lender able to consider the property's current position and the works completed since purchase.
We packaged the case with a clear explanation of the original acquisition, refurbishment, current HMO use and requested refinance.
The outcome
The application progressed using the property's current open-market position rather than forcing the client to wait unnecessarily for a standard six-month ownership period.
The refinance allowed the client to repay their existing finance and release capital towards their next investment.
The result: capital that would otherwise have remained locked inside the property was made available sooner, helping the client continue growing their portfolio.
