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4.97 out of 5 based on 2,400+ reviews

Client Saves Thousands Using Alternative To Self-Build Finance

April 30th, 2024

Rated 4.97 out of 5 from 2,400+ reviews

At A Glance:

Our client’s plan was to build a second residence on their property, enabling them to move in and ultimately become mortgage-free by selling their original house.

Before speaking with Private Finance, the client considered expensive self-build or development finance options.

We saved our client thousands by adopting an alternative approach, using a lender accessible to only a select few brokers in the UK. Through this unique arrangement, they managed to split the titles upon mortgage completion, raise capital for the construction project, and ring-fence funds for school fees.

About

Our client was living in a large property valued at £1.6 million, complete with ample acreage. They sought planning permission to build an additional residential property of equivalent value within their extensive garden area. With plans in motion, they required finance amounting to £850,000 for the building project. Their ultimate aim? To move into the new more environmentally friendly home and become mortgage-free by selling their original residence.

Initially, the client pursued avenues independently, successfully securing planning permission, and later explored financing options with a self-build specialist. They even considered development finance. However, faced with the daunting scale and costs of the project, they sought the expert guidance of Private Finance, recommended by their estate agent, to provide a second opinion on their financial strategy.

Enter Private Finance...

Fortunately, we quickly recognised the potential pitfalls of the initial course of action. The crux of the matter lay in the costliness and the restrictive nature of self-build funding, which is tied to project progress reports.

Our broker proposed an alternative strategy that would save our client thousands in the long term and offered far more flexibility and autonomy over the build.

When seeking the most suitable lender, our advisor prioritised identifying one capable of:

Splitting the titles on completion of the mortgage – the alternative strategy our broker proposed involved taking out a remortgage against their original property. Splitting the titles would enable the client to build a new house on a separate title.
Capital raising for the construction project.
Ring-fencing the school fees of £50k per year – the lender would need to take a view of their pension in the background.

The Solution

As a specialist independent mortgage broker with access to the entire market, Private Finance has vast experience of over 25 years negotiating property finance of every kind.

Considering these unique requirements of our client, our broker identified a specialist lender that only a handful of mortgage brokerage firms in the UK have access to. Through our broker’s expertise, we arranged a more competitive residential remortgage solution. This allowed the client to refinance their current residence, securing a 2-year fixed interest-only mortgage and accessing the additional funds of £850,000 to allocate towards their building project.

Following the completion of the build and move to the new home, they would place their original property for sale on the market six months before the end of their fixed-rate term. This would allow them to repay the mortgage without incurring early repayment penalties.

If this scenario resonates with you or you’re seeking personalised mortgage advice for another situation, please get in touch — we’d be happy to see how we can help. Call us on 0800 652 0971 or email info@privatefinance.co.uk.

Disclaimer: The information presented in our case studies is intended for illustrative and marketing purposes only. Some case studies may be based on multiple enquiries or hypothetical scenarios to demonstrate typical processes or outcomes. Not all case studies represent completed business transactions, and the inclusion of a case study does not imply that the business was successfully concluded.

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Client Saves Thousands Using Alternative To Self-Build Finance

At A Glance:

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Enter Private Finance...

The Solution

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