The Clients: Two professional landlords with experience in property development and buy to lets.
The Properties: Our clients already owned the two three-bedroom properties in a town commuting distance from a Northern city. Whilst these were on two separate titles, they were structured under one mortgage as a portfolio application.
The Finance: We were looking to secure a capital raise for our clients by refinancing the current loan. They would use this funding to purchase further buy to let properties.
The Challenge: As our clients were thinking of the future of their investment portfolio, they were hoping to source a competitive rate with minimal fees to keep costs low ahead of their next purchase. However, a portfolio application such as this raises a challenge in finding a suitable lender. Whilst this structure can prove administratively beneficial to landlords, with only one application form and fee for numerous properties, many lenders are wary about moving forward with these cases. The resale of properties becomes overly complex as, with just one loan, landlords will have to restructure their portfolios just to sell one property. As such, finding a lender happy to work on this as well as a competitive rate that our clients would accept would prove difficult.
The Solution: Our whole of market access and knowledge of the specialist lending market means that we knew which lenders to approach with this case. From experience, we recognised one in particular that was very comfortable offering on multiple properties under one security and offered discounts on these types of products. As such, we quickly sourced our clients a deal with a reduced rate, no arrangement fee, assisted legal fees, and a free valuation. Our clients were more than happy to proceed with this deal and keep these properties under this structure. Here are the details:
Property value: £310,000
Loan amount: £232,500
Rate: 3.28% 5 years fixed term
Term: 25 years, interest-only
Mortgage payment: £636 per calendar month
Lender arrangement fee: Free
Rental income: £1,250 per calendar month
Gross yield: 5 % per annum
Application: SPV Limited Company
29th June 2022