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Ex-pat landlord with 100+ properties purchases 5-bed HMO

Ex-pat landlord with 100+ properties purchases 5-bed HMO

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:

  1. 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.
  2. The size of the portfolio. With over 100 properties, the client was beginning to reach the overall lending limits set by many lenders.
  3. 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.

Property Details

Here are the details of the deal:

Property value: £317,000

Loan amount:
£237,750

LTV:
75%

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

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:
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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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