Acquiring Terms for a Swiss National with no Current Income

Key figures:

• £1.65million property
• £1.276 loan
• 2-year fix at 2.39%
• 20-year term

The client:

My client has dual Brazilian and Swiss nationality. Her family is based in Switzerland, but she was residing in the UK. She and I met at a networking event where I was introduced to her by personal recommendation of a mutual friend. At the time of her application, she was not yet working and therefore had no income, but she came from a very wealthy background.

What were they looking for?

She was looking to purchase a new residential property in time to move into before starting a new job in London.

The property:

A beautiful property in London’s desirable South Kensington valued at £1.65million. The client was looking for around 80% loan to value (LTV). Her aim was to reduce the amount of capital she would need to bring into the UK to reduce any tax liabilities.

Why was it difficult?

A residential deal is typically based on an affordability model which considers a client’s ability to service a commitment monthly. At the time of application, my client had just finished one job and was taking a short sabbatical before starting a new position. She, therefore, had no income to evidence. For this type of deal, this would automatically be a concern at the credit application stage.

She was looking to buy using assistance from her family’s funds, although their entire wealth is based offshore in Switzerland.

What was the process?

A high street bank would struggle to consider a case with these complexities due to their rigid affordability checks.

I have an excellent relationship with a private bank that has a significant international presence and is experienced in dealing with assets & wealth held off-shore. They were able to look at the family’s overall wealth profile rather than my client’s personal monthly earnings.

The bank was able to consider the strength of my client’s position plus some inheritance funds that were being held in the family’s account in Switzerland. This provided assurance to the lender that sufficient funds were available to service the debt outside of regular monthly earnings.

The solution:

Considering the complications with this case, I was delighted to negotiate a loan of £1.276million at a rate of 2.39% for 2 years fixed over a 20-year term. The rate we secured was structured as part repayment and part interest-only instalments.

This was ideal for my client as, firstly, it was important that an element of the debt was certain to be repaid by the end of the term. Secondly, as she was between jobs, the lower monthly payments as a result of the part interest-only strategy offered a greater level of flexibility.

Furthermore, I have now referred my client to Enness’ insurance department to discuss life and critical illness cover.