Financing a property in one of Europe’s most exclusive ski destinations can present challenges that do not arise with a typical residential purchase. I recently assisted a client looking to purchase a €5 million ski chalet in Courchevel, one of the most sought-after alpine locations in France.
The client had been born in Germany, had British family connections and was resident in the UK as a non-domiciled resident. She had already secured terms for the purchase but wanted to explore whether a specialist broker could improve the structure and reduce the amount of assets she would need to place under management.
The chalet itself was valued at €5 million. While Courchevel is a highly desirable destination, its property market can also be relatively illiquid, with owners often holding onto properties for extended periods. This can make lenders more selective when assessing high-value chalet finance.
The initial lender had required the client to place assets under management equivalent to 50% of the proposed loan. Although the client was comfortable with the overall borrowing requirement, she wanted to minimise the amount of capital that needed to be committed to the banking relationship.
OUR SOLUTION
I reviewed the terms already available to the client and approached a bank with which Enness had an established relationship. Our previous experience arranging finance for clients with similar international profiles and alpine property requirements meant the lender was already familiar with the type of transaction.
I was able to negotiate a revised structure that broadly matched the existing offer while providing the client with a lower interest cost and a reduced AUM requirement. This gave her greater flexibility over how she allocated her wider assets while allowing her to proceed with the purchase of the Courchevel chalet.
The case highlights why international mortgage expertise can be valuable when financing high-value European property. A borrower’s residency, nationality, wealth structure and the location and liquidity of the property can all influence which lenders are prepared to consider an application.
For buyers considering a ski chalet or another property with more specialist characteristics, unusual property finance can also be relevant where the asset does not fit neatly within conventional lending criteria.
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. Where borrowing or assets are held in a foreign currency, exchange-rate movements may also affect the sterling value of the borrowing or associated payments.
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.
