The client, an experienced landlord and property developer, approached us for help in raising finance against an unencumbered block comprising four maisonettes in South West London.
The client lives in one of the maisonettes and rents out the others to working professionals. The entire property is owned by the client’s SPV limited company.
He wanted the finance to repay a director’s loan which he had taken out of the SPV to purchase a new home.
The finance would be secured against the three rented maisonettes which, between them, generate an annual rent totaling £52,200.
The forward plan was then to move into his new home and rent out the remaining maisonette, thus providing him with additional income.
Our main challenges in placing this case, were:
• The client is 69 years old – most lenders impose a maximum age of 75 years at the end of the mortgage term
• His income is made up of rent and pension – lots of lenders won’t accept these forms of income, especially in this combination
• He need a buy to let mortgage for an SPV limited company – only 11 lenders offer products to these borrowing vehicles
After some initial enquiries we found a lender that was willing to consider the application.
The deal went through on the following terms.
Property value: £1,500,000
Loan amount: £758,000
LTV: 51%
Product: 3.79% 5 year fixed rate
Term: 5 years interest only
Rental income: £4,350 pcm
Gross yield: 3.5% pa
Mortgage payments: £2,394 pcm
Lender arrangement fee: £1,999
Consultant: Andy Elley
Consultant tel: 01732 471644
