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Expanding criteria

evaluating properties with self-contained annexes

Case studies / Expanding criteria

Summary

When a landlord approached Molo about remortgaging a unique property with a self- contained annex, it prompted a rethink of criteria. This case highlights how adapting to evolving rental trends allowed Molo to provide flexible financing solutions that accommodated the borrower's entrepreneurial rental strategy.

Expanding criteria

evaluating properties with self-contained annexes

A broker recently presented us with a landlord who had an intriguing proposition: a remortgage on a house with a self-contained annex. This particular scenario showcases how Molo is adapting its criteria to meet the evolving needs of property investors.

The applicant

The borrower is a self-employed individual with an annual income of £55,000 and resides in New Malden, South West London. As an experienced landlord with a portfolio of five buy-to-let properties, they were looking to refinance a property in Carshalton, South London.

The property

Valued at £600,000, the property featured a unique characteristic—a self-contained annex complete with its own kitchen and bathroom. Such a distinctive set up allows for the annex to be rented out separately, giving the landlord a new rental income.

The strategy

Initially, properties with self-contained annexes fell outside of Molo's standard lending criteria. Recognising the growing trend of flexible living spaces, however, we adapted our approach and now consider these properties on a case-by-case basis, subject to our discretion. This flexibility extends to extensively modified properties with shared or self-contained spaces that may not fit standard HMO or MUFB definitions.
Key details

Purchase price: £600,000

Loan amount: £450,000

LTV: 75%

Property type: House with self-contained annex

The application process carefully assessed by Molo:

As a first-time landlord, first-time buyer and non-UK citizen, the applicant faced potential hurdles, as these are factors that can contribute to making it harder to get a mortgage in the UK. However, this was mitigated by their strong professional background. The SPV structure also worked in their favour.
At Molo, we assessed

Income: £55,000 per annum

Employment status: Self-employed

Property type: House with self-contained annex

Rental potential: Both main property and annex

Mortgage outcome

After a thorough evaluation, Molo approved the remortgage application. The decision reflects our commitment to supporting landlords with diverse property portfolios and our willingness to adapt to market trends.

Key takeaways

1
Molo is expanding its criteria to include properties with self-contained annexes, evaluated on a case-by-case basis.
2
Properties offering multiple rental opportunities can be attractive to both landlords and lenders.
3
Molo's adaptable approach allows us to support a wider range of property investors.
The case demonstrates our commitment to evolving alongside the property market and offering solutions for landlords with diverse portfolios. For investors considering properties with annexes or unique layouts, Molo's flexible approach could be the key to securing appropriate financing.

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Molo and Molofinance are trading names of Molo Tech Ltd, registered in England and Wales no. 10510180. Registered office: 84 Eccleston Square, London SW1V 1PX.

Molo Tech Ltd is authorised and regulated by the Financial Conduct Authority. Financial Services Register Firm Reference Number 951899.

Molo is a subsidiary company of the ColCap Financial Group, and ColCap Financial UK Ltd that is registered in England and Wales no. 14127877