First-time landlord purchases student HMO through SPV limited company
The clients: A first-time landlord referred to us by an existing client of Mortgages for Business. He worked as the director of his own fitness and wellbeing company, from which he generates a generous income. The client wished to make his first investment purchase through his new SPV limited company.
The property: A 6-bed HMO let to students in Brighton. The area is known for its good rental demand and high yielding HMO properties, due to being close to the university and its access to local amenities. Already let to students on an assured shorthold tenancy agreement, the client could see potential in the investment property.
The finance: The client had a healthy deposit of just under £157,000 from his savings and he wanted to raise £413,100 (72% LTV) on an interest only basis, to complete his purchase and to make some light refurbishments to the property.
As a first-time landlord, this was a complicated case, as most lenders like the applicant to have experience in letting property when lending on HMOs. However, as the property is already successfully let out as a student HMO and the client received a healthy income that could cover the mortgage payments, we knew that we would be able to obtain the finance needed.
The application process: We approached a lender that we know accepts:
- Student let HMOs
- First-time landlords
- SPV limited company applicants
To support the mortgage application, we asked the client to provide us with proof of ID and address, as well as three years of business accounts. A valuation was instructed on the property and the client provided us with proof of the HMO licence required by the council.
The lender was happy that the client would be able to support the mortgage payments and could see that this was an excellent property for a first-time investor. A mortgage offer was made within one month of submitting the application.
Here are the details: