Full-time landlord sells ex-LA flat to his SPV Ltd Co

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