Case Study: How We Unlocked £262,000 from a Family Buy to Let Portfolio to Fund a New Ltd Company Development Project

Overview

A client approached us while forming a new property development limited company (SPV) with his parents. Although the parents owned a strong buy‑to‑let portfolio, they were unsure how to release equity from their personally‑held properties and inject it into the new company in a clean, compliant and tax‑efficient way. They needed a structured finance solution that would allow the SPV to fund its first acquisition and refurbishment project.

The Challenge

• Parents owned several buy‑to‑let properties in personal names.
• The newly formed SPV required capital for its first investment.
• The family wanted to avoid selling assets or triggering unnecessary tax liabilities.
• They needed a lender‑approved method of extracting equity and introducing it into the company as working capital.
• The SPV needed a clear audit trail to satisfy future lenders, accountants and HMRC.

This scenario is extremely common for families launching a development company — strong assets, but no liquid capital inside the SPV.

Our Finance Solution

We arranged a 75% LTV buy‑to‑let remortgage on one of the parents’ existing rental properties. The refinance was secured at a competitive rate of 5.29% interest only fixed for 5 years, releasing £262,000 in capital.

To ensure full compliance and tax efficiency, the parents introduced the £262,000 into the new limited company as a director’s loan. This structure provided:

• A clear and transparent funding route
• No immediate tax charges
• Flexibility for future repayment
• A strong audit trail for lenders and accountants
• Full alignment with HMRC guidance on shareholder funding

This approach allowed the SPV to begin trading immediately without needing external investors or complex restructuring.

Outcome: SPV Successfully Acquires, Refurbishes & Sells First Project

With the director’s loan in place, the SPV used the funds to purchase a run‑down property. The company completed a full refurbishment and subsequently sold the property, generating profit and establishing a track record for future development finance applications and giving the parents the option of paying back some of their directors loan account or leaving the profit within the business for the next project.