Bulgarian National Secures London Buy-to-Let Property During Lockdown

• Client: High-net-worth Bulgarian national and resident
• Property: Two London investment properties in Nine Elms valued at £1.3 million each
• Challenge: Overseas residency, foreign nationality and a 75% LTV requirement during a period of significant market disruption
• Finance: Maximum available mortgage funding at 3.99% fixed for five years

International investors looking to acquire UK buy-to-let property can face additional lending considerations when they are resident overseas. This can become particularly challenging where a borrower requires a high loan to value (LTV) and is looking to finance newly built London property.

Enness was approached by a high-net-worth Bulgarian national and resident who was looking to expand their existing property portfolio in London. The client wanted to acquire two flats in Nine Elms, within the Battersea regeneration area on London’s South Bank, which would be retained as investment properties.

Each property was valued at approximately £1.3 million, and the client wanted to secure the maximum available mortgage funding. The required LTV was 75%, representing a significant level of borrowing against two prime London new-build properties.

The application was made during the period of disruption caused by the COVID-19 lockdown. Property transactions were being affected by delays to valuations and lender processes, while some mortgage providers had also reduced their appetite for higher-LTV lending.

The client’s Bulgarian residency added another layer of complexity. Overseas-resident borrowers can face additional scrutiny because lenders need to establish a clear understanding of their income, assets and overall financial position. The combination of overseas residency, foreign nationality and the required 75% LTV therefore significantly reduced the number of lenders likely to consider the application.

The new-build nature of the properties also required careful consideration. Lenders can apply different criteria to new-build flats, particularly where valuations and market conditions are changing. In this case, the timing of the transaction meant that the valuation process was also affected by wider market disruption.

Enness reviewed the client’s financial position and approached a specialist bank with an established appetite for international borrowers. The lender was comfortable with the client’s nationality and, following a detailed assessment of their financial circumstances, was prepared to consider lending at up to 75% LTV.

The valuation process was progressing during a period when surveyors were experiencing significant backlogs. Enness maintained communication with the relevant parties and was able to keep the transaction moving, with only a limited delay to the valuation.

The client ultimately secured mortgage finance for both London investment properties at a rate of 3.99% fixed for five years. The structure allowed the client to proceed with the acquisition at the required 75% LTV despite the additional challenges created by overseas residency, the new-build properties and the wider market conditions at the time.

The case demonstrates how international mortgage expertise can be particularly valuable for overseas investors looking to acquire UK property. Foreign nationality and residency can narrow lender choice, while higher LTV requirements can further reduce the number of suitable options.

For overseas investors looking to expand a UK buy-to-let portfolio, specialist lender selection can help identify financing options suited to the borrower’s nationality, residency, income and investment objectives, subject to individual circumstances and lender criteria.

Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, valuation, property suitability, due diligence and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances.

Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Property values can fall as well as rise. Buy-to-let investment carries risks, including changes in rental income, property values, interest rates, taxation and refinancing conditions. Overseas investors may also be exposed to currency movements where income or assets are held in a foreign currency.