How A Let To Buy Solution Prevented A Chain Collapse

The Client

The client was an experienced homeowner in the process of selling their existing residential property while purchasing a new home at £1.5m. The equity from the sale was required to fund part of the onward deposit and Stamp Duty, making the successful completion of both transactions critical to keeping the chain intact.

 

The Challenge

Weeks before exchange, the buyer for the client’s existing property withdrew, placing the entire chain at risk of collapse. Without the sale proceeds, the client was unable to access the required funds for the onward purchase creating an urgent need for an alternative solution that would allow the transaction to complete without delay.

Key challenges included:

• Loss of sale proceeds at the last minute

• Imminent risk of the onward purchase falling through

• Time-sensitive completion deadlines across the chain

 

The Solution

Rather than forcing a distressed sale, we structured a Let-to-Buy mortgage on the client’s existing property. This enabled the client to retain ownership, release the required equity, and proceed with the onward purchase without dependency on an immediate sale.

To maintain flexibility, the LTB mortgage was arranged on a short-term tracker with no early repayment charges, allowing the client to:

• Complete on the onward residential mortgage without selling

• Placing a tenant in the existing property

• Re-market the property and sell at a later date, chain-free

Given the urgency of the situation, we also worked closely with all parties to amend the completion timescale, ensuring the mortgage offer, legal work, and lender requirements aligned with the revised transaction deadlines. This flexibility was critical in keeping the onward purchase on track despite the disruption to the chain.

While this approach did result in the additional property Stamp Duty surcharge on the onward purchase, the client will be eligible to reclaim the surcharge once the original residential property is sold within the standard three-year window.

Mortgage Details – Let-to-Buy

• Property Value: £700,000

• Loan Amount: £350,000

• Loan Type: Interest-Only

• Term: 20 years

• Rate: 4.44% (Tracker)

• Product Fee: £1,495

• Monthly Payment: £1,295

• ERCs: None

 

The Outcome

The client successfully completed on their £1.5m onward purchase without the need to sell their existing property under pressure. By removing the chain dependency and retaining full flexibility, the client is now able to sell at a later date on their own terms maximising value while keeping costs under control.