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Periodically, we come across cases which we believe other property investors would be interested to learn about. The summary below is one such case, highlighting the client’s unique requirements and how we provided a solution they were happy with. We hope you find this recent case study helpful.
The Property
This property was a multi-unit freehold block of flats consisting of 4 units, all of which are let out on their own individual ASTs. The flats are situated across 4 stories and were converted from a pair of semi-detached houses.
Client Background
Our client is a very experienced landlord with a large portfolio including single lets and multi-unit lets. The property business that consisted of the property portfolio had already been incorporated into a limited company some years ago by way of a beneficial sale, but the legal entries at the land registry remained in the name of a partnership until the early repayment charges expired on the current mortgages.
Client’s Requirements
There were no real quirks relating to the property as all units were above 35 sqm and situated in a standard residential area etc. Although most multi-unit block of flats lenders would have been able to accept the property as security, we needed to source the most competitive lender that could also accept the fact that the beneficial sale to an Ltd company had already taken place, and this application with the new lender was to transfer the legal title now to the Ltd company. A number of lenders refused this transaction as a beneficial sale had already taken place.
Solution
After completing a full case referral, including copies of the business sale agreement and letters from the client’s accountant, the most competitive lender in the market at the time came back and confirmed they would be happy to proceed with the case. The case was submitted, valuation was instructed on day one and the lender’s requirements were issued. By the time the valuation report came back, we had satisfied all of the lender’s requirements and after being signed off by a senior underwriter, we had the mortgage offer for the client. The process was very smooth other than a few extra questions being asked due to the type of transaction.
The finance provided was as follows –
Property valuation – £1,750,000
A loan amount of £1,225,000 (70% loan to value) on a 5-year fixed rate of 3.05%, a £2,495 arrangement fee (equates to only 0.2% of the loan size), a free commercial valuation and £750 cashback on completion.
Client Feedback
“Having financed quite a few properties with Advocate finance prior to my incorporation, I have recently dealt with Henry who was very knowledgeable on moving 2 houses arranged as 4 flats from the partnership into our new limited company. Without Advocate Finance’s years of experience dealing with different companies and different property transactions, it would have been a difficult process. The lender recommended was the best company that had the best products available for a Ltd company incorporation”
How can Advocate Finance help you?
Whether you have a portfolio that needs incorporating into a ltd company, a multi-unit block of flats that you require finance on or even just a standard buy to let mortgage enquiry, we are experts in this sector and can find the right solution to suit your needs.
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