Buy to let mortgage for SPV to purchase at auction 2-bed flat above office

We were approached by a married couple who were looking for finance to help them expand their relatively new property portfolio (one rental property owned for six months in an SPV limited company).

The couple run a successful business of which they are both directors and 50% shareholders.

This business pays them each a salary of c£100k per annum.

They wanted to buy a two-bed flat above an office in Chester which was being sold at auction. Keen to avoid expensive bridging finance, we needed to find a lender which would accept relatively inexperienced landlords purchasing using an SPV limited company and be able to process the mortgage application within the 28 day auction timeframe requirements.

We approached one of the specialist lenders which we knew would be happy to consider the deal. In particular, we chose the lender because it allows us to instruct the valuation on their behalf which gave us more control over the timescales.

After a little bit of negotiation and clarification, the lender offered terms a full two weeks prior to the sale day which made completing the application possible within the auction’s 28-day timeframe.

Here are the details: 

Property value: £170,000

Loan amount: £127,500

LTV: 75%

Rate: 4.49% discounted for 2 years

Term: 25 years interest only

Borrower: SPV limited company

Mortgage payment: £477 pcm

Lender arrangement fee: 1.5% (£637.50)

Rental income: £875 pcm

Gross yield: 6.2% pa

Consultant: Jeni Browne, 01732 471647 

1st March 2016