Couple set up SPV Ltd Co to purchase low value, high yielding buy to let

A married couple approached us for help in getting a buy to let mortgage to buy a 3-bed semi in the Wirral which is already tenanted and generating a monthly income of £600 pcm.

The couple are both in full-time employment in the healthcare industry and also personally own a small portfolio of rental properties. On the advice of their accountant they had set up a Special Purpose Vehicle (SPV) limited company through which to make further buy to let purchases because it will be more tax efficient for them.

As the pair were only looking for a loan of £72,000, this would reduce the number of lenders available to them because some will not lend below £75,000. They also requested a five year fixed rate to protect themselves against potential rate rises in the current uncertain market.

Taking all of their requirements into consideration we approached an intermediary only lender with which we have semi-exclusive access.

This particular lender has a minimum loan threshold of £50,000 and is currently offering some extremely competitive five year fixed rates which are available to limited companies as well as individuals.

Here are the details:

Property value: £96,000

Loan amount: £72,000

LTV: 75%

Rate: 3.99% 5 year fixed

Term: 5 years interest only

Lender arrangement fee: 2% (£1,400)

Borrower: SPV Ltd Co

Mortgage payment: £240 pcm

Rental income: £600 pcm

Gross yield: 7.5% pa

Consultant: Chris Longhurst, 01732 471650

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

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19th October 2016