UK buy-to-let mortgage via an SPV on a former residential property to raise funds for a new home purchase

We recently worked with a couple planning to purchase a new residential property while simultaneously selling their current home to a limited company set up specifically for property investment (an SPV). The transaction required careful planning, as it involved raising extra funds from their existing property to help cover both the deposit on their new home and stamp duty.

Client Profile

• Joint applicants, both in full-time employment
• high disposable income across both applicants
• No previous landlord experiences
• Planning to sell their current residential property to their own SPV limited company
• No tenants currently in the property, as it is still owner-occupied

Property Details (SPV Purchase)

• Property type: Former residential property being sold to SPV
• Current market value: £560,000
• Outstanding mortgage: £290,000
• Projected rent: £1850 per calendar month
• Planned borrowing: Up to 75% loan-to-value (LTV)
• Funds to be used for:
  • Paying off the existing mortgage
  • Raising capital to put towards the deposit on their new residential purchase
  • Pay stamp duty

Key Challenges

• At the time of application, the property was still classified as residential, with no tenancy history.
• The applicants had no prior landlord experience.
• Projected rental income alone was insufficient to meet standard buy-to-let affordability requirements, requiring a lender that allows top slicing using personal income.
• The transaction had to be structured in a way that allowed them to clear the existing mortgage while also raising equity for their onward purchase.

Our Approach

We explored the SPV lending market to find a solution that matched the clients’ goals and circumstances. Our strategy included:

• Identifying lenders who allow SPV purchases with no tenancy history and no background portfolio.
• Lenders who accept client selling their current residence to SPV as a buy-to-let.
• Choosing a lender that supports top slicing, enabling the clients’ strong personal income to make up for the shortfall in rental coverage.

The Result

• The mortgage was approved through the SPV without any issues relating to tenancy history or landlord experience.
• The lender accepted top slicing, using the applicants’ personal income to bridge the rental income gap.
• The clients were able to raise enough equity to cover their deposit for the new home and stamp duty.
• The existing residential mortgage was fully repaid.
• The transactions were completed simultaneously and efficiently, while we helped with both mortgages.
• WIS Accountancy services were used for the SPV company set up.

Important FCA Warning

As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.

Need Help with a SPV Mortgage?

If you’re looking to sell your current home to your own SPV for investment purposes and use the equity to fund a new purchase, we can help structure it the right way.

Even if you have no rental history or previous landlord experience, our specialist mortgage advisors can help you.

• Call us: 0203 0111 986
• WhatsApp: 07822 013240

Important FCA Warning

As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.