Property Purchase Using Bridging Loan on the French Riviera

• Client: UK resident and ultra-high-net-worth individual
• Property: Property on the French Riviera
• Challenge: Required short-term finance within a tight timeframe, with no existing French financial or residential footprint
• Finance: Bridging loan secured against an existing debt-free UK property, with a 12-month term and refinancing of the French property as the intended exit

Enness is regularly approached by UK residents looking to acquire property in France, particularly on the French Riviera. While the region remains popular with international buyers, arranging finance can become more challenging where a borrower has limited financial or residential ties to France and requires funding within a short timeframe.

Enness was approached by a UK resident and ultra-high-net-worth individual who was looking to acquire a property on the French Riviera. The client had significant income and assets, but the preferred route of obtaining short-term finance from a European bank was proving difficult. The purchase was time-sensitive, meaning a conventional mortgage route was unlikely to provide the required speed.

The client had no existing financial or physical footprint in France. This created additional considerations for potential lenders, particularly given the short timeframe and the fact that the client was looking to raise finance for a French property through a European lender.

Rather than continuing to pursue a French mortgage that was unlikely to be arranged within the required timeframe, Enness considered the client’s wider asset position. It became apparent that the client owned a debt-free UK property which could potentially be used as security for short-term borrowing.

Enness therefore arranged a bridging loan secured against the UK asset. This provided a faster route to the required capital while avoiding the delays that could have arisen from arranging finance directly against the French property.

The facility provided flexibility for up to 12 months, giving the client sufficient time to arrange the longer-term exit. The proposed exit strategy was to refinance the French property through a UK private bank once the purchase had completed.

The funds were released within approximately two weeks, allowing them to reach the Notaire’s office in time for the client to lodge the funds and complete the acquisition.

The case demonstrates how French mortgage requirements can sometimes be addressed by considering the borrower’s wider assets rather than focusing solely on the property being acquired. Where speed is critical, using an existing debt-free asset as security can provide an alternative route to short-term finance, subject to lender criteria and a suitable exit strategy.

For clients looking to acquire property on the French Riviera or elsewhere in France, specialist international mortgage expertise can help identify alternative funding structures where a conventional French mortgage may not meet the required timeframe.

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, lender criteria and an appropriate exit strategy. 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. Bridging finance is short-term borrowing and can carry higher costs than conventional mortgage finance. Borrowers should have a clear and realistic exit strategy and should consider the risks associated with refinancing, property values, currency movements and changes in lending conditions.