Our client was a first-time landlord looking to purchase a property on a holiday let facility through a newly incorporated limited company. However, the client was having trouble sourcing an option due to a lack of experience as a landlord. The client wanted to secure a solution that would allow her to benefit from the government tax relief whilst also being able to live in the property sporadically as a holiday home.
We secured a deal for the client with a specialist building society who were happy to lend to the client’s trading company of which she was 100% shareholder. The bank was happy to offer a 5-year fixed-rate product that was comparable to other LTD CO holiday let products in the marketplace. Not only was the product competitive but the client was able to secure the facility through her existing company without having to incorporate a new special purpose vehicle thus saving time and money.
Most holiday let mortgage options had specific criteria in terms of the status of the applicant and a lot of lenders want to see some buy to let landlord experience before offering a holiday let facility; especially through an SPV limited company.
There were a number of hurdles to overcome on this scenario before we could secure a deal.
“We were delighted to secure a competitve 5-year fixed rate deal through the client’s trading company even though the client had no prior landlord experience.”
Additionally, at the time of enquiry, several lenders had pulled out of the holiday let market entirely despite the considerable demand for property in this sector due to the increase in demand for “staycations” meaning there were fewer products available on the market.
With this in mind, we approached a specialist building society and presented a proposal based on securing the facility through the client’s trading company. We provided a comprehensive overview of the business with supporting evidence from the trading accounts.
We secured a 70% Loan to Value (LTV) facility on a 5-year fixed-rate at 4.09% with a 1.5% arrangement fee and the client provided a personal guarantee to fully satisfy the lender.
The new mortgage includes a 20% overpayment facility which benefits the clients significantly as they wish to gradually reduce the loan balance while still enjoying the benefits of an interest-only mortgage.
Additionally, the client can rent the property out on Airbnb as well as reside in the property as a holiday home for up to 60 days per year.
Overall, the deal ticks all of the boxes for the client who is delighted with the end result. We look forward to doing business together in the future.
