Client requirements

London based high net worth customers looking to keep their current home, rent this and buy a new property to live.  The two options to consider for the current home are a traditional Let to Buy (keep the current residential property in personal name and rent it and buy) or sell it to themselves (Limited Company buy to let purchase and buy).

Challenges

Identifying the value of keeping the property as a buy to let. In addition looking at the mortgage product rates we can achieve for retaining the current property and the new residential purchase to achieve the best outcome.

The customers had already paid for a conveyancer that were not on all lender's approved panels.

Solution

We helped the customer understand advantages and disadvantages of selling their current property from a Stamp Duty perspective and when looking at the property to be let, looking at the benefits of owning this in a Limited Company name (SPV) from the stance of:

• Income Tax position (if you do not need the income from the rental income and you are looking at the benefit of capital growth of a buy to let)
• Handling of fees and future ownership (we can work with your accountant to discuss exempt fees, tax efficiency of rental income etc.)
• Borrowing capabilities (achieving the cheapest costing available options considering getting the most value out of the rent)

Our extensive knowledge of each customer and the solution we delivered on meant our value shone through when:

• Balancing the borrowing across the existing property and the new residential property so that we hit a sweet spot for rates across both transactions
• Identifying a lender whereby they are happy with the leaseholder and the freeholder being the same person
• At exchange and completion when we had to re present our maths of how the money raised from the existing property acted as a deposit for the new property purchase and left the customer with enough capital funds available to the solicitors so that their completion statements were correct

Customer comments

"We would like to thank you both for all your help you gave us during the course of the journey, starting from getting us the best mortgage, to being available on a phone call away to give us the assurance and support, without which we could not achieved this.

We are very grateful for your continuous professional advice, going beyond the call of duty to ensure we were always on track. We look forward to continuing this partnership into the future as we know that we are in good hands."

Client requirements

Australian nationals currently based in Australia looking to remortgage their UK buy-to-let property in order to release funds for business purposes.

Challenges

This case was full of challenges – being Australian nationals presented the first challenge due to the majority of lenders requiring UK citizenship or clients deemed with Expat status. A foreign national is viewed as a higher risk due to the difficulties should recourse be required. The fact that the property was let on a corporate let basis also added a level of complication, as some lenders are unable to lend on this type of tenancy. Funds were also raised for business purposes. In addition, the clients had adverse credit in the form of missed mortgage payments.

Solution

Hawke FS sourced a lender that would consider all the challenges on a two-year product at a rate of 6.99% interest only, which allowed clients to raise the funds needed, clear their debts and establish a UK credit footprint. The rate does sound high initially but when the above challenges were taken into consideration the solution is great value for money. This is important as it would enable the clients to remortgage in two years’ time on to a more standard product. Cashflow was not affected as half of the loan was rolled up interest, which meant small monthly payments.

Type of case

BTL Purchase from personal names into Limited Company (SPV)

Client requirements

Client is a professional landlord with 18 buy-to-let properties spread across London and the South East. Many of these are owned in their personal name. following advice from their accountant they decided to purchase one of the properties in a new so after accountants advice he decided to purchase one of his own properties in a new SPV (special purchase vehicle) limited company.

Challenges

The transaction needed to take place at full market value so a lot of importance was placed on the valuation stage. The client also owned the leasehold of the flat and freehold in a different company name – this connection between freeholder and leaseholder is not liked by a number of lenders, which reduced the options available. The client was also on a tight timescale, needing completion within five weeks from start to finish.

Solution

Hawke FS sourced and placed the application with a lender who was able to work with professional landlords that had a minimum of four mortgaged buy-to-let properties. The lender was also comfortable with the freeholder and leaseholder being the same person (albeit through a different limited company). The deal was sourced and progressed at speed and completion took place within four weeks.

Client requirements

Professional landlord looking to remortgage a multi-unit block which consisted of three self-contained flats, used as buy-to-let properties, to improve cashflow.

Challenges

The client wished to repay their high street commercial lender, who was insisting on capital and repayment on the buy-to-let properties. The client also wished to release equity to consolidate various commercial loans across several properties. It was a complex portfolio and situation.

Solution

The client had a good-sized portfolio of mixed commercial, semi-commercial multi-units and standard buy-to-let properties across London and the South of England. Hawke FS understood the client’s position, income and requirements in order to improve cashflow. The multi-unit product was suitable in terms of size and value, and as such the property was successfully offered within three weeks of the case being opened, and completed in five weeks.