Couple in their 70s receive 25 year term on ex-LA flat
We were approached by a married couple looking to re-configure their property portfolio on the advice of their accountant.
The couple, who currently own 50 rental properties had been advised to begin selling their low-performing properties and transfer ownership of their remaining ones to that of an SPV Ltd Co.
In reality this type of transaction is not a straight ‘transfer’ – the couple must in fact sell their properties to their SPV limited company at open market value.
The first property the couple had decided to sell to their SPV is a two-bed ex-council flat within a small block in Manchester.
Several factors meant the finance required would need to come from a specialist lender.
- The applicants are both retired and rely on rental income as their main source of income
- The couple were looking for a 25 year term, which would take them both into their late 90s
- The property is ex-local authority
- This transaction would be classed as an associated transaction
We took the case to Keystone Property Finance – a specialist lender which doesn’t impose any age restrictions on those borrowing via a limited company. Deeming the couple a good risk, the following terms were offered:
Property Details
Property value: £115,000
Loan amount: £86,250
LTV: 75%
Rate: 3.99% 5 year fixed
Term: 25 years interest only
Borrower: SPV Ltd Co
Lender arrangement fee: 2% (£518)
Mortgage payment: £292 pcm
Rental income: £575 pcm
Gross yield: 6% pa
Consultant: Gavin Elley, 01625 416396
8th August 2017
