Avamore Capital has provided a £945,000 refurbishment loan for the conversion of a former guesthouse into a House of Multiple Occupancy (HMO). The transaction faced complications due to a month-long delay in the planning decision.
To prevent delays, Avamore conducted a commercial valuation and initially lent against the property’s commercial value. The lender later agreed to increase funding once planning permission was granted, allowing the deal to proceed.
Aidan Lesslie, relationship manager at Avamore, stated that the loan structure required changes during the underwriting process due to the planning delays. Zahrah Mudasiru, underwriter at Avamore, noted the need for a detailed assessment of the property’s existing use and a considered valuation approach.
The conversion of former commercial properties into HMOs continues to attract investor interest, despite increasing regulatory scrutiny in the sector. The borrower has since submitted another case to Avamore.