It possible to purchase a property for your own use as an owner-occupier for many purposes that include:
• Industrial
• Hotels and licensed trade
• Residential care and nursing homes
• Retail
• Office
• Doctors, dentists and veterinary practices
Purpose
The loans are provided to purchase, development and refurbishment.
Loan to value
Lenders normally lend 70-85% of the market value of the properties. For example, if you want to buy a small hotel valued at £1 million then you will be able to get hotel finance, in the form of a commercial mortgage, of £0.70 million. However, there are special schemes available for dentists, for example, that provides 100% finance. The management skills of the borrower also influences the amount borrowed as lenders are willing to advance more to experienced operators. If additional security is available then it is possible to borrow up to 100% of the property value.
Property types
Lenders generally prefer properties that are in good repair. The general guidelines are as follows:
• Properties for heavy industrial usage and chemical processing plants are not considered as acceptable security
• Industrial and office - they need to be modern units which are no more than 25 years old
• Public houses – units with a good split between wet and dry trade
• Hotels – typically 3 star and upwards
• Care & nursing homes – establishments that comply with the Care Standards Act 2000
• Dentists – preference for private or mixed practices
Term
The typical lending period is from 5 years to 25 years but could be tailored to suit individual circumstances such as length of tenancy agreements in place. In respect of leasehold properties, loan period will be restricted to term of the lease.
Security
Lenders usually seek one or more of the following:
• First legal charge over freehold and leasehold properties
• Debentures, floating charge security, life cover and guarantees from directors and group companies
• Personal guarantees from directors
Other
It is worth remembering the following:
• Industrial and office – the borrower must demonstrate their ability to manage the property or appoint a suitable management agent
• For owner-occupiers – the business must have the ability to repay the loan, which will be assessed by analysing audited accounts and bank statements
Additional info
For more general information on property finance please click here
For your owner-occupier property loan 'repayment calculator' and other templates please click here
Contact us for a FREE consultation
If you are interested in finding out more about 'owner-occupier' property finance or talk to one of our consultants, without obligation, then please click here to contact us or telephone us on (020) 7016 9775.
Last modified: 18/02/2005 19:48:32