SPV raise capital on unencumbered freehold block of 12 flats

We were approached by a full-time landlord wanting to raise capital on an unencumbered multi-unit property through a SPV Ltd Co to expand his property portfolio.

The SPV Ltd Co is solely directed by the client but he is joint shareholder with his mother at 50% each.

The challenges with this deal were

  • The property was made up of 12 flats (considerably exceeds most lenders limits)
  • Director wanted a long term mortgage (shareholder of Ltd Co’ was 70 years old)

Luckily we were able to source funding from a lender which would take a view on the property due to it being two storeys, and only 8 years old.

This lender were also happy to use the directors’ age rather than his mothers’ age when deciding the maximum mortgage term available.

Thus meeting the clients’ needs with the following deal.

Property value: £980,000

Loan amount: £490,000

LTV: 50%

Product: 3.49% term tracker

Term: 25 years interest only

Mortgage payments: £1,425 pcm

Rental income: £6,167 pcm

Lender arrangement fee: 1.25% (£6,125)

Gross yield: 7.6% pa

Consultant: Beckie Pepperrell

Consultant tel: 01732 471602