Client
Two foreign nationals applying jointly, both residing in the UK on working visas. The clients had previously purchased a mixed-use pub and residential property using a bridging loan, and came to us for a semi-commercial mortgage to exit the bridge.
Background
Having bought the property on a bridging loan, the clients refurbished it and brought it up to a high specification. The pub was leased and achieving regular rent, while the six flats above – split into three one-beds and three studios, some under 30 sqm – were let to an agent on a two-year guaranteed rent scheme. With the bridging term drawing to a close, the clients needed to secure a long-term mortgage to exit the bridge and, ideally, release some extra capital to reinvest.
Requirement
- Exit the existing bridging loan on the mixed-use pub and residential property
- Secure a semi-commercial mortgage suited to a pub with flats above
- Work with a lender comfortable with flats under 30 sqm
- Work with a lender accepting a two-year guaranteed rent scheme
- Raise additional capital on top for reinvestment
Challenges
Pubs are difficult to finance generally, with most lenders unwilling to consider them at all. On top of this, the flats above were broken up into six smaller units, some under the usual 30 sqm minimum most lenders require, and let via a two-year guaranteed rent agreement with a managing agent rather than standard individual tenancies. As foreign nationals on working visas, the clients also needed a lender comfortable assessing their residency status alongside the complexity of the property itself.
Solution
As a whole-of-market expat mortgage broker providing solutions for foreign nationals from around the globe, we knew some lenders would consider pubs up to a certain loan-to-value, typically 60%. We also knew some lenders would accept flats smaller than the usual 30 sqm rule, and allow two-year leases on a guaranteed rent scheme. We used this knowledge to cover the exit off the bridging loan with a new semi-commercial mortgage, and raised some extra capital on top to allow the clients to reinvest.
Outcome
The clients successfully exited their bridging loan onto a semi-commercial mortgage at up to 60% loan-to-value on the pub element, with the flats accepted despite falling under 30 sqm and being let on a two-year guaranteed rent scheme. The additional capital raised gave the clients the flexibility to reinvest elsewhere.
Summary
This case shows it’s possible to secure lending on extremely complicated setups that would be seen as undesirable by most standard mortgage lenders. As a whole-of-market broker, our expat mortgage advisors have the knowledge to place complex mixed-use and semi-commercial cases – browse our other expat mortgage case studies for similar examples.
Key Point
Key things to consider for foreign national and expat income:
- Some lenders will accept applications from foreign nationals.
- Some lenders will consider pubs up to a certain loan-to-value.
- Some lenders will allow lending on flats smaller than 30 sqm.
- Some lenders will accept two-year leases direct to management companies or agents on a guaranteed rent scheme.
Frequently Asked Questions
Can foreign nationals get a semi-commercial mortgage in the UK?
Yes, some lenders will accept applications from foreign nationals on working visas.
It comes down to finding a lender comfortable assessing residency status alongside the complexity of the property itself.
Can you get a mortgage on a pub with flats above it?
Yes, though pubs are generally difficult to finance.
Some lenders will consider pubs up to a certain loan-to-value, typically around 60%, provided the property is well-managed and generating regular rent.
Can you get a mortgage on flats smaller than 30 sqm?
Some lenders will lend on flats under the usual 30 sqm minimum.
This often depends on the wider strength of the case, including the rental arrangement and the rest of the property.
How do you exit a bridging loan on a complex mixed-use property?
By refinancing onto a longer-term semi-commercial mortgage before the bridge matures.
Sourcing the right lender in advance means the exit can also include raising extra capital for reinvestment where needed.
If you have any questions relating to an expat bridging loan or any type of expat mortgage, contact us today to speak directly with one of our CeMAP certified Mortgage Advisors.
Expat Mortgages UK is a specialist broker directly authorised and regulated by the Financial Conduct Authority. We work exclusively with expats and foreign nationals buying UK property with overseas income. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call: +44 1494 622 555 Email: info@expatmortgages-uk.com
Related Pages
- bridging loans for expats and foreign nationals – Short-term finance for complex or time-sensitive property purchases.
- semi-commercial mortgages – Financing mixed-use properties combining commercial and residential elements.
- buy-to-let mortgages for expat landlords – Financing a UK rental property as an expat.
- expat mortgage calculator – Get an instant estimate of your UK borrowing capacity.
- expat mortgage case studies – Real examples of expat and foreign national UK mortgage completions.