The Client: An experienced landlord with 40+ properties, all owned under his limited company. One of his properties is a purpose-built student HMO flat, situated in a large block beside a university.
The Property: Our client wanted to purchase two more HMO flats within the same block. One five bedrooms and the other six, the block was ideally situated for students studying at the nearby London university.
The Finance: Having seen a positive turnover from his portfolio, our client had savings that he wished to re-invest in more property. Thanks to excellent returns, he was particularly keen to expand his portfolio in the student accommodation sector. In order to streamline his finances, he wanted one 75% LTV loan facility to cover both new units.
The Challenge: The main challenge with this case was finding a lender to accommodate all our client’s requirements. Firstly, we needed a lender that was comfortable with a professional landlord with a sizeable property portfolio. With more than 40 properties, many buy to let lenders wouldn’t accept our client.
The next aspect that complicated the case was the multi-unit element. We’d need to source a lender that would accept our client owning more than one flat within the same block, as some would consider the exposure too great a risk. Furthermore, we’d need to find a lender that would offer one loan facility to cover the two properties, meaning we’d definitely be looking in the specialist end of the lender market.
The Solution: As a specialist buy to let mortgage broker, we have extensive experience sourcing finance for landlords purchasing with complex income and property criteria. With full market access, we quickly identified the buy to let mortgage lenders with criteria that covered our client's loan facility request, property criteria and income structure. After comparing the mortgage interest rates and products on offer, we secured the most appropriate rate, which would increase our client's cash flow. Here are the details:
Property value: £780,000
Loan amount: £585,000
Rate: 4.54% 5-year fixed rate
Term: 25 years, interest-only
Mortgage payment: £2,257.52 per calendar month
Lender arrangement fee: 2% of loan (£11,700)
Rental income: £3,780 per calendar month
Application: SPV Limited Company
Consultant: Adam Henderson, 01732 471658
2nd November 2021