We were approached by a full-time landlord with a portfolio of 10+ properties. The client was looking to purchase his individually owned property through his newly established SPV limited company.
The property is a one-bed ex-local authority flat located in North London.
We were limited to the number of lenders we could approach because of the following:
• The buyer and seller are related – many lenders will not accept this type of associated transaction.
• The flat was ex-local authority and the block was only 40% privately owned - most lenders prefer circa 75% to be owned privately.
• The landlords’ income was quite low and solely from his property investments - many lenders do not accept property income, and usually have a minimum income requirement of £25k per annum.
Luckily we were able to source an intermediary only lender, to which we have access on a semi-exclusive basis, whose criteria worked for our client and offered the following deal:
Property value: £170,000
Loan amount: £75,000
LTV: 44%
Rate: 4.29% 2 year fixed
Term: 25 years interest only
Lender arrangement fee: 1.5% added to loan (£8,438)
Mortgage payment: £268 pcm
Rental income: £770 pcm
Gross yield: 5.4% pa
Consultant: Chris Longhurst, 01737 471607
