Transfer of a HMO into a Limited Company, raising an additional £100k to refurbish the property
A client was referred to us by their business bank manager at a high street bank as they were unable to help them. The client owned a 6 bedroom licenced House in Multiple Occupancy (HMO) in Bristol. Having owned the property for a number of years as his home he lived in one bedroom while he let out the other 5. His aim was to borrow 75% loan to value, refinancing the existing borrowing while raising an additional £100,000 to fund property improvements.
With the property being a HMO and with the owner living in the property the scenario proved difficult for many lenders. This set up fell into a grey area between regulated personal mortgage borrowing and unregulated commercial borrowing.
BIZL explored various options with the client and arrived at a workable solution. In order to raise the funding required the client moved out of the property and simultaneously sold the property at market value to his Limited Company. This structure enabled the desired financing to go ahead while also meeting the client’s long term tax strategy of moving his properties to a compay structure. The client was delighted with the outcome, and the bank manager who referred them to us has been able to enhance their relationship by helping find a solution for their client.