A Manchester-based investor had exchanged on a new build apartment in a city-centre regeneration zone, only to discover that the lender pool for investor led scheme funding was far smaller than anticipated. The original valuation had come in at £300,000 — more than £90,000 below the purchase price of £392,147. With notice to complete served and less than six weeks to finalise the deal, the deposit already paid was at serious risk if a workable mortgage couldn’t be arranged.
What was the situation?
The investor was purchasing a new build apartment on Nobel Way, Manchester. The property sat within a larger investor led scheme and came with a head lease arrangement, both of which significantly reduced the number of lenders willing to offer finance. The client had approached other brokers without success and came to Oakstead following a recommendation from someone familiar with complex investor cases.
What was the challenge?
An investor led scheme is difficult to finance not because of the investor label itself, but because of what that label usually signals: restricted occupation clauses, mandatory management agreements, service charges that erode yield, developer incentives that inflate the purchase price, or leasehold structures that complicate saleability. In this case, the head lease created an additional layer of restriction. The earlier valuation of £300,000 reflected the surveyors’ concern that comparable sales data was thin, and the purchase price looked unsupported.
The clock was running. Notice to complete had been served. If a mortgage couldn’t be arranged within six weeks, the deposit would be forfeited and the purchase would collapse. The client needed not just a willing lender, but a valuation that brought the loan-to-value ratio into a workable range.
What did we do?
We worked through the limited panel of specialist lenders who remain active in investor led schemes with head lease structures. Once a suitable lender was identified, we arranged for an independent valuation to be carried out. This was not an automatic decision. In cases where valuation risk is high, it can make sense to instruct a valuer who is familiar with the local market and the specific development type, and who is willing to look at off-plan sales, forward projections, and the broader regeneration context rather than relying only on historical transactions.
The approach worked. The new valuation came in at £360,000 — a £60,000 uplift from the earlier figure. This meant the client could proceed with a £270,000 loan at 75% LTV without needing to bridge the full gap between the original valuation and the purchase price.
What was the outcome?
The case moved from application to formal mortgage offer in 14 working days. The client secured a five-year fixed rate at 5.95%, and the purchase completed before the notice-to-complete deadline. The £60,000 increase in the valuation gave the investor enough equity in the property to proceed without forfeiting the deposit or walking away from the deal.
Financing an investor led scheme is rarely straightforward. Lender appetite is limited, valuation outcomes are unpredictable, and the margin for error is thin when deadlines are tight. If you’re purchasing in a new build scheme with restricted occupation, mandatory management arrangements, or a head lease structure, getting the lender selection and valuation strategy right from the outset can make the difference between completing and losing your deposit.
Arrange a consultation with Oakstead Finance.
