- Client: UK National and Resident
- Property: UK Residence
- Property Value: £16,000,000
- Loan Amount: In excess of £1,250,000
- Facility: Second-charge finance, 24-month term
Enness was approached by a UK-based high-net-worth client seeking to raise significant capital to fund a new business opportunity. Having generated wealth through a combination of successful businesses and property investments, the client wanted to access liquidity without selling assets or disrupting their wider investment strategy.
Given the time-sensitive nature of the opportunity, Enness explored a second-charge structure secured against the client’s primary UK residence, valued at £16 million. The proposed facility would allow the client to raise more than £1.25 million to repay an existing business loan and provide additional capital to address a supply chain disruption affecting the client’s business.
Second-charge lending can provide an alternative way for high-net-worth borrowers to access capital while retaining their existing first-charge mortgage. However, it is a specialist area of the lending market, with a relatively limited number of lenders willing to consider larger or more complex transactions.
The structure of this transaction also required careful consideration of the regulatory position. While borrowing secured against a main residence can fall within the regulated mortgage market, the circumstances of the existing finance, the proposed use of funds and the overall structure meant that the regulatory treatment required careful assessment alongside the lender’s criteria and applicable requirements.
Enness presented the client’s circumstances, the intended use of funds and the proposed repayment strategy to specialist lenders. The client’s overall financial position and the substantial value of the property were relevant factors when assessing the proposed structure.
Enness successfully arranged a second-charge facility in excess of £1.25 million on a part-and-part interest-only basis over a 24-month term. The structure provided the liquidity required to repay the existing business borrowing and support the client’s wider commercial objectives, while allowing them to retain ownership of their primary residence.
This case demonstrates how second-charge finance can provide a source of liquidity for high-net-worth borrowers with substantial property assets and complex funding requirements. The suitability and regulatory treatment of any structure will depend on the borrower’s circumstances, the existing finance, the proposed use of funds and individual lender criteria.
If you are considering raising capital against a high-value property, Enness can assess your requirements and explore specialist second-charge and other bridging finance solutions.
Read the UK version of this case study.
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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.
