Introduced to R&BS by his local land agent, a brother has finance to buy his sibling’s interest out of one house and adjoining land from the family farm.
On the death of his mother, Mark Smith was left a 50% share of a family farm in East Sussex, with his brother having the other 50%. With two houses, farm buildings, yard and seven acres, the farm was already greatly reduced from its original size following the death of his father.
Mark is employed as a haulage operator for a renowned local agricultural company. His intention was to buy his brother’s ownership of the cottages and land - and then let those to create a new income stream. Unable to find the finance he needed because he believed the purchase was beyond his financial means, Mark was introduced to Rob Lister of R&BS by Richard Thomas of BTF Partnership.
More than just a mortgage broker
Rob helped Mark formulate a staged plan to facilitate the purchase, with stage one being the purchase of his brother’s 50% share in one of the houses and its adjoining land. The next step will be for the brothers to get planning permission to convert the farm buildings to light industrial use and sell the yard with this consent. Two of the farm buildings already have consent for light commercial use, whilst the remaining three have agricultural use. On completion of the building sale, Mark will have options to buy his brother’s share of the second farm cottage or buy other agricultural land/property and clear the existing mortgage within 12 to 18 months.
Preparing a lending proposal and negotiating terms
Mark needed finance to buy the cottage, restructure small debts with his existing high street bank and provide for cottage improvements and legal fees. Rob demonstrated to lenders that Mark could meet serviceability from his existing wages then letting the cottage and grassland, which in turn provided sufficient reserves to cover repayments, and that there was an exit route of selling the farm buildings.
Rob succeeded in getting Mark finance from a lender on a 5-year term with minimal exit penalties so the mortgage could be repaid easily on the sale of the buildings. On completion of the mortgage, Mark said “It has been an insightful journey. I’m amazed at what Rob has achieved. If it wasn’t for him, I would not have had the opportunity to purchase part of the old family farm.”