Prime property in London has rebounded from the impact of coronavirus and lockdown with surprising strength. The activity underlines the market’s reputation as a safe haven, while economic uncertainty from the pandemic continues to linger across the globe. The Covid crisis has also driven a need for liquidity with high net worth individuals looking to free up cash. Fortunately, record low interest rates have provided an opportunity to release equity from property while securing finance on extremely favourable terms.
Enness strives to achieve the very lowest costs for clients helping them to make the most of their financial situation. Each mortgage we facilitate is tailored to the individual needs of the borrower. In this case study, we refinance a £8.5million property for a British national on a high loan to value (LTV). We take a look at how the deal improved the client’s liquidity and enhanced their overall financial position.
Client: British national
Country of residence: UK
Client income: Ultra-high net worth
Property location: West London, UK
Property value: £8.5 million
Funding required: Refinancing and equity release
The client is an ultra-high net worth British national and professional property investor. Enness was tasked with remortgaging their prime London home at a relatively high LTV of 70%.
The deal would allow the client to release equity which was earmarked for business ventures. In the current climate many lenders are nervous and, therefore, assigning properties with conservative valuations in order to hedge their risk. It means that a property could come back with a lower valuation than the client expects the home is worth – creating problems in achieving the loan to value.
Lenders can be particularly jittery around prime properties, especially in London where Brexit and political uncertainty have somewhat held values back over the past couple of years. Quite simply, many banks have no appetite to lend at this end of the market and at this level of LTV.
Issues to address
The client was looking for a high loan to value (LTV) of 70% on a prime central London property. The cornerstone of the deal rested on achieving the valuation of £8.5m. If the property was down valued, the LTV would creep above 70% making it harder and more expensive to refinance.
More than 10 years of operating in mortgage sphere has allowed us to build up a wealth of contacts across the property industry. In every case, we gather a complete overview of a client’s financial situation. As a result, we are able to use all aspects of wealth to the benefit of a borrower and match them with lenders that specialise in the given area.
In this situation, we found a private bank that would be willing to lend at 70% LTV. But it all rested on the valuation. Getting a down valuation would mean extra expense and time for the client. However, through our valuer connections we were able to provide an indication of the property value and whether it would pass through the lender underwriting standards before proceeding with the deal. Our approach meant the deal was far less likely to collapse down the line.
With offices across the globe, Enness has links to more than 300 lenders worldwide. Our network spreads to niche and specialist providers of mortgage finance, on top of those in engaged in all aspects of the process such as valuers. We secured the loan at 70% LTV and at the value the client had hoped.
Property price: £8.5million
Over how many years: 5 years
The client achieved their goal of releasing equity and was pleased with the rate sourced by Enness.
What can Enness do for you?
The low mortgage rate environment means now is a good time to consider refinancing, particularly if you need to improve your liquidity position. We have access to hundreds of lenders worldwide that can provide a range of solutions for high net worth clients and those with complex financial backgrounds. We can negotiate the best mortgage rates for your position, and find deals that better align with your current position. Contact one of our experts for an initial consultation to find out how we can help you.
We are delighted to present the Global High Net Worth Mortgage Guide which takes an in-depth look at the world of international mortgage finance in luxury property markets around the world. The guide covers local regulations, access to funding, how to secure the most competitive terms and much more.
Our bespoke approach to mortgage funding is second to none, covering residential, commercial, development and international property acquisitions. Real-life case studies highlight how we approach complex funding requirements which often demand a bespoke funding structure.DOWNLOAD PDF