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Landlord earning less than £25k pa raises capital against multi-unit

Landlord earning less than £25k pa raises capital against multi-unit

A broker called us looking for finance for his client who wanted to capital raise against an unencumbered multi-unit, currently tenanted to professionals. The client is a full-time landlord with a small property portfolio which generates a personal income of £14k per annum.

The property in question is a converted townhouse comprising of two self-contained flats.

The client wanted to raise just under £94k to repay his parents who had gifted him the property a year ago.

There were three main challenges with placing the case, which meant a specialist lender would need to be approached.

  1. The client’s income is solely from rent and under the standard £25k threshold of many lenders

  2. The property is a multi-unit

  3. Both flats share the same electric/water mains – something lenders tend to steer clear of

Keystone can deal with the more complex scenarios hence why the broker approached us. Happy with the client’s experience the following terms were offered. 

Property value: £125,000

Loan amount: £93,750

LTV: 75%

Rate: 4.19% 5 year fixed

Term: 25 years interest only

Lender arrangement fee: 2% (£1,875)

Product: Classic Range

Borrower: Individual applicant

RTI: 145% @ 4.19%

Mortgage payment: £334 pcm

Rental income: £1,300 pcm

Gross yield: 8.5% pa



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