First-time landlords purchase multi-unit holiday let with newly set up SPV

A married couple, both high earners, approached us looking for help in financing their first investment property. They wished to purchase three self-contained, two-bed flats on a single freehold title located in the Lake District which they intended to let out as holiday accommodation.

Only a handful of lenders will consider holiday lets and those that do mostly require the borrower to have experience either in the leisure industry or letting property. Unfortunately our couple had no experience of either.

They also wanted to make the purchase using a newly formed SPV limited company which reduced the options further.

The lender we approached is a well-established building society which has a mortgage specifically designed for limited company holiday lets.

The valuation report agreed that the property would make excellent holiday accommodation and because the couple could easily afford to cover the mortgage without letting any of the flats, the building society agreed the following terms, which were accepted.

Please note that the Society were also willing to consider an interest only facility, although the applicants decided to opt for a capital repayment mortgage

Property value: £487,500

Loan amount: £341,250

LTV: 70%

Rate: 3.99% (3.74% + Bank Rate) term tracker

Term: 25 years capital and interest

Borrower: SPV Limited Company

Lender arrangement fee: £5,460

Mortgage payment: £1,847

Rental income: £36,000 pa

Gross yield: 7.4% pa

Consultant: Andy Elley, 01732 471644

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 touch on my details above.

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

Consultant