A specialist mortgage lender has completed a buy-to-let transaction for a Glasgow flat situated above commercial premises, after the application was initially declined under standard lending criteria.
The one-bedroom property, valued at £110,000, is located above a pub in Glasgow and generates monthly rental income of £725, representing a yield of 7.9%. The property’s position above commercial premises initially caused the application to fall outside most high street lenders’ criteria.
Specialist assessment approach
Foundation Home Loans revisited the case through its Property Plus proposition, developed with valuation partners Connells and e.surv. The product allows valuers to assess properties that fall outside conventional lending parameters.
Reagan Hamilton, mortgage and protection consultant at Clear Vision Mortgages, said Foundation was the only lender that met the requirements. “When the case was initially declined on a standard product because the property was above commercial premises, I panicked as I had nowhere else to place it,” Hamilton said. “Thankfully, the underwriter suggested switching to Foundation’s Property Plus range, and the application was accepted without any issues.”
The case reflects broader challenges in the buy-to-let sector, where properties with non-standard characteristics can struggle to secure financing despite strong rental yields. Transaction completion rates remain a concern across the market, with specialist properties facing additional hurdles.
Valuation process
Connells valued the property at the agreed purchase price, enabling the landlord, described as an experienced portfolio investor, to complete the purchase. Ben Leroy, client services director at Connells, said the firm took “a holistic and robust approach to properties that remain in strong demand among landlords.”
Nathan Goodridge, head of sales at Foundation, noted that such properties can deliver higher yields than standard buy-to-let assets. The 7.9% yield on the Glasgow flat compares favourably to average buy-to-let returns in many UK markets.
The transaction highlights the role of specialist lenders in the buy-to-let market, particularly as regulatory pressures on landlords continue to affect the sector.
Fiona Roberson, regional account manager at Foundation, said the lender had enhanced its Property Plus proposition in response to broker feedback, allowing more applications to proceed where the investment case is strong despite falling outside traditional lending criteria.
