Landlords with low income purchase first rental property via newly established SPV Ltd Co

A married couple approached us looking to make their first buy to let purchase via an SPV limited company - the pair already hold a small portfolio of rental properties, but within their personal names. On the advice of their accountant they had been advised to make future purchases via an SPV, so had recently set one up to do just that.

The pair were looking to purchase a three-bed semi-detached house in Sidcup for renting out to professionals.

The couple originally approached a high street lender, but had been declined for finance due to their income. Neither applicant is in full-time employment, so their only source of income is from rental property.

Fortunately we have semi-exclusive access to an intermediary only lender who does not impose a minimum income requirement. Instead, this lender looks at the last three months bank statements to check for good conduct.

Happy with the client’s statements and property, the lender deemed the couple a good risk and offered the following terms.

Property value: £350,000

Loan amount: £237,000

LTV: 67%

Rate: 3.69% 5 year fixed

Term: 25 years

Borrower: SPV Ltd Co

Lender arrangement fee: £2,499

Mortgage payment: £728 pcm

Rental income: £1,300

Gross yield: 4.45%

Consultant: Chris Longhurst, 01732 471607

14th September 2016