Case studies
Kuwaiti national and resident purchasing 9 new build flats in Manchester
Buy-to-let
Kuwait Residence
About the client
- Our client was a Kuwaiti national and resident
- He had agreed to purchase 9 new build flats in Manchester
- All 9 flats were to be purchased using a new UK special purpose Limited company.
- Our client and his two family members were the shareholders of the UK company
- The average purchase price was £250K and required mortgage was 75%
Solutions
- We arranged the 75% mortgage across each flat with one UK private bank.
- The bank arranged 9 separate mortgages simultaneously, i.e., no cross charge.
- As the client wanted the flexibility to possibly sell some of the flats within the next two years the mortgages were arranged on a fully flexible tracker basis. This is where the interest rate is a fixed marge + the Bank of England base rate and has not tie in/early repayment charges.
- The bank opened a UK bank account for the rent be deposited
The key figures and terms
- The figures below are based on the single £250K purchase price for one flat. For the total portfolio the figures should be multiplied by 9.
- The purchase outline:
Purchase price
£2.25M
Mortgage
£2.25M
Client deposit
£750K
Loan to value
75%
- Purchase costs:
Stamp duty
£15K
Solicitor cost
£1,500
Mortgage valuation
£500
Bank fee
£1,875
Total
£18,875
- Clients total cash investment:
25% Deposit
£62,500
Purchase costs
£18,875
Total
£81,385
- Mortgage terms:
Product
Boe Base rate tracker
Rate
3% + Base
Term
5 years
Payment type
Interest only
Monthly payment
£742
Valuation fee
Free
Legal costs
Free
- Return on investment per flat:
Gross rental income
£1,458
Less interest
£742
Gross profit rent
£716
Gross yield
7%
Return on cash
11%
