Foundation has provided a £153,700 mortgage for an experienced landlord buying a newly developed holiday let in Burford, Oxfordshire.

The property, valued at £205,000, forms part of a six-unit development within a wider renovation project and was purchased on a freehold basis.

Projected annual rental income from Sykes ranged from £19,863 to £24,277, producing an interest coverage ratio of 176.58%. Foundation had previously completed another mortgage on the same development.

However, the application required a specialist assessment because the traditionally constructed property had a chalet-style appearance and was subject to restrictions limiting stays to a maximum of eight weeks.

Its position on a busy road also raised questions about marketability, while the lender had to consider its exposure to the development and the concentration risk arising from financing multiple units.

Other complications included limited comparable sales evidence and uncertainty over the building warranty. The property’s intended use as a holiday let also reduced the potential owner-occupier market.

Foundation commissioned a commercial valuation to take account of the holiday-let restrictions. It applied standard loan-to-value terms and first-charge security, while limiting its exposure within the development to two units.

The mortgage enabled the landlord’s purchase to proceed.

Nathan Goodridge, head of sales at Foundation, said: “This case demonstrates the importance of specialist lending when assessing holiday let investments that fall outside standard criteria.

“While there were a number of factors that required careful consideration, the property’s strong affordability, experienced borrower profile and robust rental projections supported a positive outcome.

“By taking a pragmatic approach, we were able to help the broker secure funding for their client and continue making mortgages happen.”