The client: A full-time landlord and pensioner in her early 70s. Since starting out in buy to let over two decades ago, the client has built up a portfolio of more than 60 properties. Keen to expand her portfolio further, our client was looking to refinance 12 of her rental properties to raise the necessary funds and extend the loan terms of the mortgages which were due to expire on her 75th birthday.
The properties: Twelve, standard 2-bed properties in a popular Kent town ranging in value from £150k to £220k. Each property is let on a 6-month AST agreement with an average rent of £693pcm.
The finance: Our client was particularly keen to secure a single loan rather than 12 individual buy to let mortgages. In particular she was keen to agree interest only terms up to her 85th birthday. She also wanted:
- A 5-year fixed rate with a low reversion rate
- Low set up costs
This combination of factors meant that we would need to source a specialist lender to meet our client's very specific and somewhat complex requirements. After a few initial discussions, we were able to find a lender willing to offer a single loan across the 12 properties on a 13-year term. At 3.58%, this particular lender is also currently offering one of the lowest reversion rates on the market.
The application process:
We began by helping our client to draw up a property portfolio spreadsheet, which would help us to work out the potential maximum she could borrow. We also used this spreadsheet to support the her mortgage application.
The case was submitted for underwriting and all 12 properties were valued separately. As you might imagine with so many properties, there was a bit of to-ing and fro-ing between us and the lender but in a relatively short period of time, a formal mortgage offer was issued which our client was happy to accept. The case then progressed smoothly through to completion. To the client’s delight the lender did not charge an arrangement fee and waived legal transfer costs.
Here are the details of the deal
Total value of the 12 properties: £2,310,000
Total rental income: £8,310 pcm
Average Gross Yield: 4.3% pa
Loan to value: 74%
Rate: 3.48% 5 year fixed (reverting to lender's LIBOR + 2.63%)
Term: 13 years interest only
Mortgage payment: £4,977 pcm
Lender arrangement fee: None
3rd January 2019