Specialist lender Somo has completed a £145,000 second charge bridging loan to help two portfolio landlords clear mortgage arrears across their buy-to-let properties and remove a restriction on their title at HM Land Registry.
The transaction, structured under Somo’s Landlord Breathing Space Second Charge product, was secured against one of the borrowers’ rental properties valued at £460,000 with an existing first charge of £65,000. The remaining equity provided sufficient security for the second charge facility without disturbing the existing mortgage.
Arrears and title restrictions
The two landlords, who jointly own a small residential portfolio, had fallen behind on mortgage payments across multiple buy-to-let properties. Unpaid management company charges had also triggered a restriction on one of their titles at HM Land Registry, complicating their ability to transact.
With adverse credit on their files, the borrowers were unable to access mainstream lending options. The 18-month term loan cleared the buy-to-let arrears, brought accounts current, and settled the management charges, removing the title restriction.
Exit strategy through asset sales
The loan structure allows the borrowers to sell two properties from their portfolio without time pressure, aiming to achieve full market value rather than conducting a distressed sale. Somo’s repayment route is backed by the proceeds from these planned asset sales.
The case highlights the role of second charge bridging finance in the buy-to-let sector, particularly as mortgage rates remain elevated and landlords face pressure from regulatory changes and rising costs.
Jade Keval, chief operating officer at Somo, said: “Arrears don’t always tell the full story. Here we had experienced landlords with real equity in their portfolio and a sensible plan to sell two properties. What they needed was time, and the arrears were making that time very expensive.”
She added: “By taking a second charge behind a low first charge mortgage, we were able to clear the arrears, deal with the title restriction and give the borrowers the breathing space to sell properly rather than in a rush.”
The transaction reflects broader activity in the specialist lending market, where providers are reporting strong volumes. Several specialist lenders have reported record lending volumes in recent months as landlords navigate a challenging regulatory and tax environment.
