This case is a great example of how understanding lender criteria and presenting a well-structured application can unlock opportunities — even when the property isn’t in perfect condition.
Our clients' situation
They were looking to buy their next home before selling their current one — a situation that can often complicate mortgage applications. With a purchase price of over £1 million and a required loan-to-value (LTV) of 85%, they needed a lender that would treat the new property as their main residence, even though they hadn’t yet sold their existing home.
The case presented several layers of complexity:
• The clients needed 85% LTV on the new purchase, with 50% of the loan on interest only to keep monthly payments manageable.
• One applicant had taken part of their annual bonus early, which showed as a large deduction on their latest payslip — with no payslip evidence of the advance, only a letter from payroll.
• The second applicant was on maternity leave, with no childcare costs to be incurred.
• The property being purchased was in poor condition. It had graffiti on the walls, exposed floorboards, and dated but functional kitchen and bathroom facilities.
Alexander Hall's solution
After reviewing the options, we placed the case with a lender that was willing to apply their standard LTV policy, provided the new property would be the clients’ main residence. They were also comfortable with the existing mortgage remaining in the background. Thanks to the clients’ combined income level, the lender allowed 50% of the loan to be structured on an interest-only basis, which helped keep monthly payments manageable.
They took a pragmatic view of the bonus situation, accepting the gross bonus figure after reviewing a letter from payroll explaining the advance. In addition, they adopted a common-sense approach to maternity leave, accepting the second applicant’s basic income based on her final payslip before leave, once we provided written confirmation of her return-to-work plans.
To support the application further, we submitted a detailed overview of the clients’ refurbishment plans. This included confirmation that the property would be their main residence, with temporary accommodation arranged at a nearby family home during the kitchen and bathroom renovations. We also provided evidence of sufficient savings to fund the work, which reassured the lender of the clients’ ability to carry out the necessary improvements.
Despite the property's condition, the surveyor returned a valuation with appropriate comments, and the lender was satisfied with the explanations and supporting documents. Sometimes, the instinct is to walk away from a challenging property but with the right advice and a proactive approach, there’s almost always a solution.
To talk to one of our advisers about your mortgage needs, call us on 08000 38 37 36 or book an appointment today.
