Non-homeowner purchases rental flat at 80% LTV via new SPV Ltd Co

A longstanding client approached us looking to purchase a two-bed rental flat in Kent with an estimated rental value of £750 pcm.

The client is in full-time employment at a leading investment bank and also personally owns a large portfolio of 20+ rental properties. On the advice of his accountant he had set up a

Special Purpose Vehicle (SPV) limited company to make future purchases, as it would be more tax efficient.

The client’s situation caused a few challenges in sourcing funds because:

• He doesn’t own his own home – many lenders prefer borrowers to own their own home before owning buy to let properties

• He wanted 80% loan to value – the majority of buy to let lenders only go to 75% LTV

• He has a large portfolio of rental properties – not all lenders will accept portfolio landlords

We took this case straight to one of the specialist lenders. Happy with the client’s income, experience as a landlord and value of his portfolio the following terms were offered.

Property value: £175,000

Loan amount: £140,000

LTV: 80%

Rate: 4.19% 5 year fixed

Term: 25 years interest only

Lender arrangement fee: 2% (£2,800)

Borrower: SPV Ltd Co

Mortgage payment: £498 pcm

Rental income: £750 pcm

Gross yield: 5.14% pa

Consultant: Nick Helm, 01732 471608

 

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

 

This is just one example of how we have helped secure finance for a client, if you have a similar scenario or something you'd like us to look at please get in contact with us on 0345 345 6788 or contact me directly at nickh@mortgagesforbusiness.co.uk.

Consultant