£1.5 million Buy to Let purchase before stamp duty changes

THE SCENARIO

I was recently contacted by a buy to let landlord who was looking to purchase a £1.5 million buy to let property with his siblings. This client already had a portfolio of 6 properties, the other two owned their own homes, while another did not own a property at all. Essentially they were looking to raise money on the existing buy to let, worth £2 million, with which to purchase a new property.

This group of clients all worked as Quantity Surveyors for their own limited company, from which they did not have much income to show. This already created a slight challenge, as you nearly always need to show income in the background when applying for a buy to let mortgage to prove you can support any rental void periods.

These clients showed approximately £10,000 each on their SA302s, however we could only take two people’s incomes into account for the application. This wouldn’t work for almost every lender due to the lack of affordability in the background. Each client also had large family outgoings on the side, such as school fees.

Despite this, I was able to source a lender willing to take a view on the amount of equity in the other existing buy to let properties, as well as some significant savings in the background. This meant we were able to raise a £1 million loan, which would be used to put down as a deposit on the new property, with the remainder to then be used for refurbishments.  

With the recent Mortgage Credit Directive (MCD) and stamp duty changes going on in the buy to let sector, this was an extremely successful deal to have secured, especially as we were able to complete within just 1 month before the stamp duty changes came into force.

OUR SOLUTION

I managed to secure an interest only 2 year fixed rate of 2.39% with just a £999 lender arrangement fee, as well as complete a new mortgage of £400,000 on the new property which was worth £600,000.