The Client: A professional landlord with over 100 rental properties in his portfolio, valued at over £35m.
The client had set up a limited company in the mid-90s, which specialises in student lets. Looking for a lifestyle change, he had recently moved to Scandinavia with his young family, but still regularly commutes to the UK to manage his property business.
The Property: Situated in the popular student city of Durham, the client was looking to purchase a 5-bed semi-detached HMO, only a short bus ride from the local university.
The Finance: The client was looking to borrow at 75% loan to value, using his earnings from rental income as a deposit.
There were a few complications with this deal which mean we would need to approach a specialist lender:
- The client’s expat status. Recently moving to Scandinavia, the client is now classed as an expat. Funding options are restricted in the UK for landlords living overseas.
- The size of the portfolio. With over 100 properties, the client was beginning to reach the overall lending limits set by many lenders.
- The property type. Out of the lenders which will accept expat applicants only a handful will offer rates on HMO property let to students.
The Application Process: We approached an intermediary only lender, which we knew would be comfortable with the client’s expat status and portfolio size. The client already has two buy to let mortgages with this particular lender.
We asked the client to provide us with the following information to support the application:
- Proof of UK buy to let experience (tax returns & SA302s) and UK bank account for rental payments
- ID and proof of UK citizenship
- Proof of residency abroad
- Proof of residency in the UK in the last five years
- An up-to-date property portfolio spreadsheet
- His latest three years’ worth of accounts
The client was delighted that an offer was made within two weeks of submitting the application.
Here are the details of the deal:
Property value: £317,000
Loan amount: £237,750
Rate: 3.99% 2 year fixed rate
Term: 25 years’ interest only
Lender arrangement fee: 1.5% (£3,150)
RTI calculation: 155% @ 5.50%
Mortgage payment: £806 pcm
Rental income: £2,000 pcm
Gross yield: 7.57%pa
Consultant: Gavin Elley, 01625 416398
24th April 2018