Ex-pat sells two personally owned rental properties to newly established SPV Ltd Co

We were approached by a broker whose client - an ex-pat based in Saudi Arabia, was looking to transfer ownership of two of his UK rental properties - from personal to limited company.

In reality this type of transaction is not a straight ‘transfer’ – the client must in fact sell both properties to his SPV limited company at open market value. Although a costly process the client’s accountant had calculated that the short term pain would be outweighed by longer term gain.

The client has been living in Saudi Arabia for just over five years working as a senior manager for an international law firm. He also owns eight rental properties in the UK. He was looking to transfer ownership of two, semi-detached cottages in the West Midlands.

Several factors meant the finance required would need to come from a specialist lender.

  1. Not many lenders will accept ex-pats who have lived abroad for more than five years.

  2. This type of transaction is classed as a related transaction – something mainstream lenders tend to steer clear of

  3. The client was looking to borrow via an SPV Ltd Co

Fortunately, we have access to a specialist intermediary only lender that accepts both ex-pats and related transactions and offers the same rates to limited companies and individual applicants.

Happy with the background checks carried out on the client, the following terms were offered:

Property 1

Property value: £325,000

Loan amount: £223,200

LTV: 69%

Rate: 3.99% 5 year fixed

Term: 25 years interest only

Lender arrangement fee: 2% (£4,464)

Borrower: SPV Ltd Co

Mortgage payment: £742

Rental income: £930pcm

Gross yield: 3.4%

 

Property 2

Property value: £190,000

Loan amount: £142,500

LTV: 75%

Rate: 3.99% 5 year fixed

Term: 25 years interest only

Lender arrangement fee: 2% (£2,850)

Borrower: SPV Ltd Co

Mortgage payment: £473

Rental income: £750pcm

Gross yield: 4.7%

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

Consultant