The Retreat: A Refinance Case Study
January 31, 2014
Following on from the Santander article looking at lending for the Private Rented Sector Young Group has put together a case study on the refinancing of its property portfolio in The Retreat.
The Retreat, completed in 2008 and located in the London Borough of Wandsworth, is a gated development consisting of 26 luxury flats with secure parking that provide the perfect combination of luxury, convenience and tranquillity.
The development completed in the middle of the financial crisis. A few of the units had been sold, however, we decided to complete on the remaining majority as we could see the long term growth potential, despite the uncertainty in the market at that time. Five years later this decision has been vindicated as Wansdworth has experienced an increase in property values of 16.4% over the past year.
The recent refinancing was planned and resulted from the current 5 year term coming to an end. As is prudent with all financial matters we researched the market to see what was on offer from various financial institutions.
Santander was chosen, not only because of their competitive commercial terms but also because of the service that they deliver. Customer service is important to Young Group and it was a pleasure to deal with a team that combined this ethos with an impressive understanding of, and commitment to, the PRS market.
An interesting side note; it is striking that when comparing due diligence requirements of the original financing to the recent refinance process, there has been a marked increase in the amount of legal paperwork required. This is an industry wide issue that has resulted from the increase in banking regulation, and has reached the point where even solicitors are becoming frustrated with the level of paperwork that needs to be waded through.
When we first planned the refinance early last year, Santander did not immediately spring to mind as a potential lender. The overall number of institutions in the market lending on private individual buy-to-let mortgages and the large institutional investors is smaller than expected. It is good to see a mainstream lender embracing this segment of the PRS.
Neil Young, CEO, Young Group