Full-time landlords raise £800k against HMO & flat combo

A married couple with eight buy to let properties in South East London, approached us looking for help in raising finance against one of their rental properties.

The couple were hoping to refinance one of their more unusual properties – a 5-bed HMO with a 1-bed garden flat held under one title. They planned to use the capital raised from the refinance to purchase a further buy to let property.

We needed to source finance from a lender which would accept:
- Properties valued at over £1m
- Complex property types
- Full-time landlords with income solely derived from rent
- Landlords with large property portfolios

On top of this the couple had asked for a fixed rate product with low ERCs, as they were hoping to refinance again in a few years and to split the title of the HMO and the flat.

We approached a specialist lender and explained the scenario to the underwriter. Happy that the couple and the property were a good risk, the following terms were offered.

Property Details

Property value: £1,350,000

Loan amount: £810,000

LTV: 60%

Rate: 3.68% 5 year fixed

Term: 25 years interest only

RTI calculation: 145% @ 3.68%

Borrower: Individual

Mortgage payment: £3,128 pcm

Lender arrangement fee: 2% (£20,000)

Rental income: £4,735 pcm

Gross yield: 3.3% pa

Consultant: Gavin Richardson, 01732 471613

22nd August 2017