Image of flats being built with a buy to let loan

Portfolio landlord purchases three blocks of new-build flats

18.07.19 | Written by: Jeni Browne


The client:
A portfolio landlord wanting to purchase three blocks of new-build flats, which were being finished at the time of purchase. The client was a full-time landlord and developer, with a large number of properties in his portfolio. We have worked with the client on several occasions and have built up a strong working relationship.

The property: A new development in one of the Medway towns, Kent, with excellent commuter connections and access to local amenities. The property consists of 24 flats configured as three blocks. The flats are a combination of one and two bedrooms, let directly to the council for social housing.

The finance: The experienced landlord needed to borrow 75% LTV against the flats. The client wanted to finance all three blocks under one mortgage. To access lending on this scale, the case came under commercial terms.

The client had done his research on the local market to assess what the apartments would let for each month and entered an agreement with the council to let the entire three blocks to them directly, for social housing. He created a full business plan to provide to the lender, evidencing his predicted income.

Having worked with the client before we were able to quickly find a lender, as we had all the information needed to support the mortgage application.

The application process: The most suitable lender for the case is a bank that we have worked very closely previously, and we have a strong understanding of the cases that they accept. The lender was very pleased with the client’s research on the rental income that he will generate from the property and could see that the flats would make an excellent investment.

A full valuation was made of the property to confirm the expected income and high standard of the newly built property.

There were a few delays with the building project which delayed the application process a little. We worked closely with the lender, facilitating continuous contact between both them and the client. Our knowledge of the case and management of both the client and lender meant that the mortgage offer was secured.

Property value: £4,500,000

Loan amount: £3,348,835

LTV: 75%

Rate: 4.79% 5 year fixed

Term: 10 years interest only

Lender arrangement fee: 1.5% added to the loan amount

Mortgage payment: £13,367 pcm

Gross yield: 4% pa

Predicted rental income: £16,500 pcm

Consultant: Jeni Browne, 01732 471647

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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