Portfolio landlords refinance 4-bed multi-let ahead of PRA changes

A married couple approached us for a remortgage on a 4-bed multi-let, (sometimes referred to as an non-licensable HMO because it doesn’t require an HMO licence!).The couple were looking to raise capital against it to use as a deposit on a further investment property.

Between them, the couple own 10+ rental properties in the South East. They were keen to get the finance in place before the new underwriting rules for portfolio landlords come into effect at the end of September 2017 thus avoiding having to prepare addition documentation in support of the loan application.

We took the case to a buy to let provider which lends on both HMOs and multi-lets, and can only be accessed via intermediaries. The couple were keen to borrow as much as possible, so opted for a five year fixed rate with a more favourable rent to interest calculation than available on shorter term products.

We helped the couple prepare all the necessary paperwork and submitted the application. Managing the process for them, the case went from offer to completion within four working weeks.

Here are the details:

Property Details

Property value: £270,000

Loan amount: £201,600

LTV: 75%

Rate: 2.74% 5 Year Fixed

Term: 19 years interest only

RTI calculation: 145% @ 5.25%

Lender arrangement fee: £1,995

Mortgage payment: £465 pcm

Original monthly payment: £442 pcm

Rental income: £1,300 pcm

Gross yield: 5.8% pa

Consultant: Jeni Browne, 01732 471647

5th September 2017