The Client: Keen to benefit from the high demand and yields, this first-time landlord sought to purchase a holiday let. She was employed full-time and owned her own home.
The Property: A two-bedroom terraced house in a popular holiday destination in South West England. The property was perfectly situated for UK holidaymakers with easy access to local amenities, transport links, and the beach.
The Finance: With a deposit from personal savings, our client required a 75% LTV holiday let mortgage to complete the purchase.
The Challenge: The main challenge for this case would be sourcing a holiday let lender that would accept an applicant with no previous buy to let experience. While sourcing standard buy to let mortgages for first-time landlords isn’t too challenging, the additional work required to successfully manage holiday let properties means that most lenders require at least one years’ landlord experience.
The Solution: Using our extensive experience sourcing holiday let mortgages and our whole of market access, we could research and shortlist a few lenders that would potentially accept our client. Having identified which lenders offered the most suitable rates to maximise our client’s yield, we approached our first choice.
We put across a case that demonstrated our client’s strengths, who, although never having been a landlord, did own her own home. The property she’d chosen would be incredibly popular for holidaymakers and would be able to produce an income that would more than satisfy the mortgage repayments.
Comfortable with the application, the lender made a formal mortgage offer just a few weeks after submission, and our client is now on the way to owning her first investment property! Here are the details:
Property value: £245,000
Loan amount: £183,750
Rate: 3.99% two-year fixed-rate
Term: 25 years, interest-only
Mortgage payment: £615 per calendar month
Lender arrangement fee: £1,250
Rental income: £800 per calendar month
Gross yield: 3.9% per annum
Application: SPV Limited Company
4th August 2021