- Client: British National and Resident
- Net Worth: £20-25m
- Security: UK self-build property valued at £4,500,000
- Loan Amount: £2,700,000
- Product: Five-year interest-only facility with quarterly interest payments
Enness was approached by a high-net-worth client looking to release equity from a valuable UK residential property to create additional liquidity. Although the client had a substantial net worth, a significant proportion of their wealth was held in illiquid assets, including high-value property. The objective was therefore to unlock capital without having to sell existing assets.
The client wanted to establish a flexible facility that could be used to fund future property acquisitions in St. Barts and the Alps. Rather than requiring the full amount immediately, they wanted access to capital that could be drawn down when suitable acquisition opportunities arose.
This created a number of considerations when structuring the finance. The lender needed to be comfortable with the intended use of the funds, while also understanding the client’s wider financial position. Although the client had considerable wealth and a strong financial background, their relatively low level of day-to-day liquidity meant that the presentation of the application and the proposed use of the facility were particularly important.
Enness approached a Swiss private bank with experience of working with high-net-worth international clients. The client’s UK residence was used as security, allowing Enness to negotiate a £2.7 million facility. Rather than requiring the client to draw the full amount immediately, the structure allowed the capital to be placed with the bank and subsequently accessed as required through a securities-backed lending facility.
This structure gave the client greater flexibility around the timing of future property purchases. When capital was required for an acquisition, the facility could be used to provide the necessary liquidity. The bank was also comfortable supporting the client’s plans to finance a property purchase in the Alps.
Beyond the headline loan amount, Enness considered the wider requirements of the banking relationship. The client wanted a facility that offered flexibility while also providing a high level of service and a clear point of contact within the bank. The private bank was able to provide a dedicated relationship, alongside an interest-only structure with quarterly payments over a five-year term.
The case demonstrates how equity release can be structured for high-net-worth individuals whose wealth is concentrated in valuable but illiquid assets. Rather than selling property or other investments to generate cash, a bespoke lending facility can potentially provide access to liquidity while allowing the underlying assets to remain in place, subject to lender criteria and the overall structure of the transaction.
For clients looking to access capital ahead of future investment or property opportunities, the right structure can be just as important as the amount borrowed. Enness can assess the wider financial position, identify suitable lenders and negotiate a facility designed around the client’s requirements.
Risk Warning:
Equity release and securities-backed lending carry risks. Property values and investment assets can fall, and borrowing against assets can increase exposure to losses. If you do not meet the terms of a facility, the lender may take enforcement action against secured assets. Securities-backed facilities may also be subject to changes in collateral values and additional lender requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, valuation and lender criteria. Terms and availability will vary depending on individual circumstances and the proposed transaction. Enness does not provide investment advice or advice on securities-backed lending, and lender introductions are unregulated.
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.
