" We have now heard from the lender who says that the Woolwich have put a borrowing limit of £85,000 and can therefore not release the funds. We were only borrowing £18,000 and feel very hard done by..."

Did you authorise the lender to get a reference from the Woolwich and not have any direct contact with the Woolwich?

We signed an authorisation sent to us by the lender so they could contact the Woolwich for the reference. We thought this was a mere formality and the lender said as much. The lender stated that the funds were available for release once the reference was received by them. They also said that they had never heard of a mortgage company blocking the application for additional funds. In your experience would you advise us to contact the Woolwich ourselves to negotiate for the limit to be raised? Any help you can offer will be much appreciated.

Many thanks!!!

PWH

The Woolwich are limiting your borrowing to 40% of the value ie. keeping a 60% LTV which presumably ties in with the deal you've got with them.

I'd contact them and ask if the limit can be raised and accept that this may mean a higher rate of interest on your Woolwich loan. Another option would be to remortgage the lot as one loan either with the Wololwich (but I assume you've got a reason for not asking them in the first place) or another lender. You should be able to get a good deal at 70% LTV which is what you'll end up with.