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Part-time landlord sells personally owned ex-LA flat to newly set up SPV

We were approached by an existing client looking for help with selling one of his personally owned rental properties to his newly set up SPV limited company. The property is an unencumbered, two-bed, ex-council flat within a four-storey block.

The client is the sole director of a consultancy company and a part-time landlord with one more rental property.  Despite being a landlord, however, the client does not own his own home and was also wanting to raise capital to use as a deposit to get on the home-owning property ladder.

We approached a couple of specialist lenders whose criteria accepts ex-council flats and non-home owners on a case by case basis – but in this instance, after receiving the valuation report they both declined to help.

So we approached another specialist lender, this time with success. Our client and the property in question were even considered suitable for the lender’s new automated valuation system, which meant mean that an offer was produced very quickly and without a valuation fee.

To our delight, the client was very impressed with the process and agreed the following terms with the lender in question.

Property Details

Property value: £85,000

Loan amount: £55,250

LTV: 65%

Rate: 3.99% Variable

Term: 10 years interest only

Lender arrangement fee: 1.25% (£691)

Borrower: SPV Ltd Co

Mortgage payment: £186 pcm

Rental income: £550 pcm

Gross yield: 7.8% pa

Consultant: Andy Elley, 01732 471644

 

 

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

Mortgages for Business Ltd is registered
in England and Wales No. 2502713.

Registered office:
17 Kings Hill Avenue,
Kings Hill, West Malling,
ME19 4UA.

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Mortgages for Business Ltd is authorised and regulated by the Finance Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgages for Business Ltd is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.

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