Case study: Investec in the driver's seat for client's Special Purpose Vehicle

Investec Mortgage Intermediaries Team

Creating a lending solution for a Special Purpose Vehicle (SPV) can be challenging for some lenders. However, Investec Private Bank has extensive experience helping clients by structuring Buy-to-Let (BTL) mortgages that fit their unique financial circumstances. Find out how we helped two clients refinance five BTL properties they were moving into an SPV, while also allowing them to raise capital.

The UK Buy-To-Let (BTL) market has undergone significant changes in recent years, including the introduction of new regulations and tax obligations.

 

Landlords now have more responsibilities than ever before, but Hamptons International is confident investment in BTL properties will continue to grow in the coming years. The organisation's research predicted 20.5% of households will be renting in 2022, up from 19.4% last year, with the sector likely to encompass 6 million households by 2025. Nevertheless, recent changes within the BTL sector are encouraging a growing number of investors with property portfolios to shift gears and consider alternative legal ownership structures and tax strategies.

 

Special Purpose Vehicles (SPVs) are becoming increasingly popular for those who wish to restructure their current BTL holdings for maximum portfolio performance. With Investec Private Bank providing the mortgage financing, the road to establishing an SPV is a smoother, more comfortable ride.

 

The borrower

Two of our clients already owned five buy-to-let properties within a limited liability partnership. However, they wished to change the legal ownership structure of these holdings by moving the properties into an SPV, as well as restructure the remaining debt.

 

The challenge

Lending into an SPV can be a challenging proposition for some lenders. This case was particularly challenging as the portfolio consisted of a handful of properties and the clients also wanted to raise a small amount of equity against their portfolio.

 

The solution

At Investec Private Bank, we understand that one-size-fits-all solutions are rarely a good fit for high-net-worth individuals with unique investment portfolios and income profiles.

 

That is why we like to look under the hood and examine each client's financial circumstances in detail to identify the best way to build a mortgage to match the requirements of their BTL portfolio.

 

On this occasion, we were able to lend the required amount on a 10-year fixed rate. This allowed our team to structure a mortgage that offered cashflow security and ensured the clients could take advantage of historically low interest rates.

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