A client was referred to Enness by a previous client and sought to raise additional capital against an existing residential property to support the purchase of a first buy-to-let investment property.
The proposed buy-to-let property was a house in West London valued at approximately £1.8 million. The client had existing borrowing of around £700,000 against their current residential property and wished to raise approximately £500,000 towards the new investment.
The client’s income profile presented an additional consideration. As an investment manager, a significant proportion of their remuneration was performance-related and received through annual bonuses. This meant that a straightforward assessment based solely on recent employed income did not fully reflect their overall earnings potential.
The client had also changed roles relatively recently, meaning their bonus history with their current employer was limited. Their remuneration structure had changed during the transition between roles, further complicating the assessment of historical bonus income.
OUR SOLUTION
Enness approached a specialist lender experienced in assessing complex remuneration structures. The client’s employment history, income structure and wider financial position were presented to the lender for consideration.
The lender was able to take a flexible approach to the assessment of bonus income, subject to its underwriting criteria, and consider relevant earnings from the client’s previous employment alongside their current remuneration.
A mortgage was arranged over a 35-year term with a fixed-rate period, alongside lender incentives including a valuation and legal costs, subject to the agreed product terms.
The facility enabled the clients to raise the required capital towards their first buy-to-let investment while accommodating the complexities of a performance-related income structure.
This case demonstrates how specialist mortgage lenders can provide alternative solutions for borrowers whose remuneration includes significant variable or bonus income. Careful assessment of employment history and overall earnings can be particularly important where standard affordability calculations do not fully reflect a borrower’s circumstances.
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, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
