- Client: British National & Resident
- Property: Detached house with outbuildings
- Property value: £2,500,000
- Loan amount: £880,000
- LTV: 35%
- Rate: 1.85%, 5-year fixed
Enness was approached by a couple looking to release equity from an unencumbered property to help their child purchase their first home. One of the clients held a 50% shareholding in two profitable companies, while the other had a background in land and property ownership. Rather than using cash reserves, they wanted to leverage the equity in their existing property and provide a gifted deposit.
The property was a detached house with outbuildings valued at £2.5 million. The clients required £880,000 of borrowing, representing a relatively low 35% LTV. The challenge was finding a lender comfortable with the proposed gifted deposit while also taking the clients’ company income and property-related income into account.
Enness approached the market with the wider financial picture in mind, identifying a lender prepared to consider the clients’ share of company profits alongside their property income. This allowed the borrowing to be structured around the clients’ existing assets and income rather than relying on a conventional single-source affordability assessment.
The resulting mortgage provided £880,000 at 35% LTV, with a competitive 1.85% five-year fixed rate. The facility was arranged on an interest-only basis, with the clients’ intended repayment strategy based on a future sale and downsizing of the property.
The case demonstrates how releasing equity from a high-value property can provide a way for homeowners to support a family member’s property purchase while retaining their existing assets. It also highlights the importance of considering different sources of income and the wider financial position when structuring a mortgage.
For clients looking to release equity from a high-value property, the right structure will depend on the property, affordability, intended use of funds and lender criteria. Enness can explore equity release and wider complex mortgage options based on your circumstances.
Risk Warning:
Mortgages secured against property carry risk. If you do not keep up with repayments, you could lose the property used as security. Interest-only borrowing also requires a suitable repayment strategy for the capital at the end of the mortgage term. Property values can fall as well as rise, and a future sale or downsizing may not generate sufficient funds to repay the outstanding mortgage.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, affordability, underwriting and lender criteria. Terms and availability will vary depending on individual circumstances.
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.
