Case Study: Achieving Property Goals with a Let To Buy Mortgage – From Inheritance to Investment

by Megan Addy – Director | Independent Mortgage & Protection Adviser @ Prism Mortgage & Protection Advice

In the competitive and ever-changing property market, timing and strategy can determine whether dreams happen now or later. 

This case study explores the journey of a customer who faced the challenge of wanting to purchase a new home while struggling to sell their inherited property. 

Customer Background:

Harry had inherited the family home a couple of years previously; He was already living at the property when he became the owner. The property held huge sentimental value, but he felt that the time had come to move on. The property had been on the market for several months without attracting a buyer. During this period, Harry had found his ideal next move. He didn’t want to miss out on this opportunity, but his deposit was tied up in his in inherited home. Harry needed my help!  

Challenges and Objectives:

During our initial meeting, Harry told me of the challenges he was facing:

• The inherited property, although valuable, was not selling as quickly as hoped. Harry felt that this was preventing him from achieving his goals.
• Harry was deeply attached to the inherited home, making the decision to sell even more difficult. 
• There was a risk of missing out on purchasing the newly available dream home due to tied-up capital. 

As a result, he told me he had two main objectives: 

• To secure the new property without having to wait for the sale of the inherited home.
• To explore options that would allow him to retain the inherited property, keeping it within the family and potentially turning it into an investment.

The Solution:

After fully understanding Harry’s needs and circumstances, we explored various options that could address his situation. 

It was agreed that Harry would require a new residential mortgage for his onward purchase.  In addition, the solutions he considered to release equity from his inherited property included: 

1. Bridging Finance: This would allow him to bridge the gap between buying the new property and selling the inherited home. However, the temporary nature of bridging loans and higher interest rates made this less appealing to Harry. 
2. Let To Buy Mortgage: By converting the inherited property into a rental property, the client could release equity from this property to serve as a deposit on the new home. This approach not only solved the immediate financial problem but also turned the inherited property into an investment.

The Outcome:

After much consideration, Harry decided that the Let To Buy option, with a new residential mortgage for his onward purchase, was the most suitable option for him.

This would enable him to:

• Secure a deposit for his new home through the equity released from the inherited property.
• Retain ownership of their family home, now generating rental income.
• Purchase his dream property without having to wait for his inherited property to sell first. 

Harry was over the moon when his offer on his next home was accepted.  Not only was he now in the position to buy his ideal home, but he also felt confident that the financial structure put in place gave him a sustainable investment strategy, turning what was initially a dilemma into a dual opportunity. 

Conclusion:

Harry’s situation illustrates how personalised mortgage advice can turn challenging situations into successful outcomes. By understanding and adapting to Harry’s unique needs, I was able to provide a solution that secured his new home and preserved his family heritage. 

If you find yourself in a similar situation or are looking to navigate a complex property predicament, do not hesitate to reach out. Our expert advice is tailored to ensure that your property dreams and financial goals are achieved with confidence and clarity. 

Book your free initial consultation or contact us for more information.