The client is an experienced landlord with a large property portfolio in North West London.
He approached us in January looking to expand his portfolio with the purchase of a further two one-bed flats via his SPV Ltd Co.
The flats are located in a 12-storey former office block that had recently been converted into residential units, although the ground floor still functions as a retail unit.
Finding a suitable lender was a challenge for a few reasons:
- Recently converted, the flats are classed as new build – not something accepted by all lenders
- Not all lenders accept flats above commercial
- Not all lenders accept flats within high rises
- The concrete construction of the block is not favoured lenders
- The client needed the mortgage to complete before the introduction of the stamp duty surcharge on 1 April 2016
Despite the challenges we were delighted to get finance agreed from a semi-exclusive lender, who was able to work quickly and the deal completed before 31 March 2016, saving the client £12,600 in stamp duty.
Here are the details of the deal:
Property value: £280,000 x2
Loan amount: £210,000 x2
LTV: 75%
Rate: 4.19% 3 year fixed
Term: 25 years interest only
Lender arrangement fee: 1.5% x2 (£6,300)
Mortgage payment: £734 pcm x2
Rental income: £1,200 pcm x2
Gross yield: 5.1% pa
Consultant: Chris Longhurst, 01732 471607
