- Client: Dual National
- Residency: West Africa
- Property Portfolio: Circa £8 million
- Loan: £5 million+
- LTV: 70%
- Purpose: London buy-to-let acquisition and portfolio refinancing
Enness was approached by an existing client looking to expand their buy-to-let portfolio in London. The client had identified a property valued at approximately £4 million that they intended to purchase and modernise, with the aim of increasing its value over time. To fund the deposit required for the acquisition, the client wanted to release equity from their existing property portfolio, which was valued at approximately £4 million.
The transaction presented several challenges. The client’s links to West Africa limited the number of lenders able to consider the application, given the additional jurisdictional and underwriting considerations involved. The proposed transaction was also unsuitable for conventional mortgage finance because both the new property and elements of the existing portfolio were undergoing works and were therefore not currently habitable or lettable.
The client required a high level of borrowing to make the acquisition viable. A facility below 60% loan-to-value would not have provided sufficient funding, meaning Enness needed to identify a lender able to consider a higher-LTV bridging finance solution against a complex portfolio and international borrower profile.
Enness approached specialist private lenders and sourced a 70% LTV bridging facility. The structure provided the level of borrowing required to support the purchase while also allowing equity to be released from the existing portfolio.
The borrowing entity was an East Asian SPV, which introduced an additional legal requirement. The lender required a legal opinion from a local lawyer before completion, adding another element that needed to be coordinated as part of the transaction. Subject to completion of this requirement, the facility was expected to complete within the client’s required four-to-six-week timeframe.
The lender was also comfortable considering properties undergoing works, provided that a credible and stable exit strategy could be demonstrated. This was relevant because the client’s properties were not generating their normal rental income while works were being undertaken.
The case demonstrates the value of accessing specialist lenders when a transaction falls outside conventional lending parameters. By considering the client’s residency, the condition of the properties, the proposed structure and the higher LTV requirement alongside the proposed exit strategy, Enness identified a lender with the appropriate appetite for the transaction.
Privately funded bridging lenders can sometimes offer different underwriting approaches from mainstream lenders. In complex transactions involving international borrowers, SPVs, properties undergoing works and higher LTV requirements, this may create additional financing options, subject to lender criteria.
If you are looking to expand a UK property portfolio and require high-net-worth bridging finance for an acquisition or equity release, speak to a mortgage specialist to discuss your circumstances.
BRIDGING FINANCE IS SHORT-TERM BORROWING AND REQUIRES A CREDIBLE EXIT STRATEGY. DELAYS, CHANGES IN MARKET CONDITIONS OR ASSET VALUES MAY AFFECT THE EXIT AND OVERALL COST OF BORROWING.
Read the UK version of this case study.
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.
