Buy to Let Purchase in Scotland Through New Limited Company

The Client: An experienced landlord seeking to expand her existing portfolio. In order to purchase this property in partnership with her brother, the pair had set up a new SPV limited company.

The Property: A one-bedroom flat located within commuting distance of Edinburgh. The property benefitted from many local amenities and transport links.

The Finance: With a 25% deposit formed from savings and equity released from another investment property, our client required a 75% LTV limited company buy to let mortgage to complete the purchase. 

 The Challenge: The main challenge with this case was the property value. At only £67,000, it was below many lenders’ minimum property value and, therefore, loan size.

Furthermore, as the property was located in Scotland, this would further restrict which lenders we’d be able to consider. As the property purchase process is quite different to England and Wales, some lenders do not include Scotland in criteria.

 The Solution: With full market access, we could shortlist buy to let lenders that accepted limited company applications for properties in Scotland. From this list, we researched the details of the criteria to ascertain which lenders could accommodate the low loan requirement and then sought the most cost-efficient buy to let mortgage. Despite the complex challenges, we were able to get the case to completion in just seven weeks. Here are the details:

Property Details

Property value: £67,000

Loan amount: £50,250

LTV: 75%

Rate: 3.34% two-year fixed

Term: 15 years, interest-only

Mortgage payment: £142 per calendar month

Lender arrangement fee: £995

Rental income:  £425 per calendar month

Gross yield: 7.6% per annum

Application: SPV Limited Company

Consultant: Andy McOwat,  01625 416396

28th July 2021