Complex Multi-Unit Property Purchase for First-Time Landlord

The Client: A first-time landlord looking to start their property investment journey within their SPV Limited Company.

The Property: A multi-unit freehold block, consisting of four separate units, including one studio flat, a one-bedroom flat, and two two-bedroom flats. Located in a central UK city, the property was sure to generate significant rental demand from prospective tenants.

The Finance: Our client was seeking property finance to purchase this property. With a 25% deposit saved up, they needed a 75% LTV buy to let mortgage.

The Challenge: Many lenders were hesitant with this application, and the complex property type combined with our client’s inexperience limited our options for approaching a suitable lender. 

Similarly, the studio flat within the multi-unit was just 16 square metres in size. Lenders typically have strict criteria for studio flats, and most require the property to be a minimum of 30 square metres for them to consider lending. 

The Solution: Our expertise and experience working on complex buy to let cases made us best-placed to support our client on this application. To achieve our ideal outcome on this case, we recognised the importance of meeting the key specialist lenders in the market to discuss our options. We sourced a lender that would consider smaller than standard studio flats and first-time landlords. This meant that when we submitted the application, we were confident the lender was comfortable with the case. As such, the lender was able to offer, and our client happy to proceed. Here are the details:

Property Details

Property value: £260,000

Loan amount: £195,000

LTV: 75%

Rate: 2-year fixed term

Term: 25 years, interest-only

Mortgage payment:  £1,324 per calendar month

Lender arrangement fee: 2% (£3,900)

Rental income: £2,500 per calendar month

Gross yield: 11.5% per annum

Application: SPV Limited Company

12th April 2023