Multi-Unit Freehold Block of Five Flats in Newcastle
£680,000 · 9 months · 0.88% pm. A portfolio investor purchased a freehold block of five self-contained flats in Newcastle at a price reflecting below-market rents on existing short-term tenancies.
The Client
Portfolio investor
The Challenge
A portfolio investor purchased a freehold block of five self-contained flats in Newcastle at a price reflecting below-market rents on existing short-term tenancies. His strategy was to re-gear the tenancies at market rents and refinance to a MUFB mortgage.
Our Solution
Doulton provided a £680,000 MUFB bridge against the whole freehold block. The investor re-geared all five tenancies during the bridge term, achieving a blended uplift in rental income of 23%.
The Outcome
All five tenancies re-geared at market rents. MUFB specialist mortgage arranged at month eight at a valuation reflecting the improved income profile. Net yield post-refinance: 8.6%. Key highlights: Whole freehold block accepted as single security; Rental income uplifted 23% during bridge term; Net yield of 8.6% achieved post-refinance.
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