Significant Capital Raise on a £4.5 Million London Property

• Client: International high-net-worth individual with a complex offshore ownership structure
• Property: Chelsea residential property valued at approximately £4.5 million
• Challenge: Required a substantial capital raise against a property held through a BVI structure administered by a Jersey trust
• Finance: £2.95 million capital raise at 65% LTV, fixed at 3.24% for two years over a 10-year term

Capital raising against a high-value London property can become more complex where the property is held through an offshore ownership structure and the borrower has an international financial profile. Enness was approached by an international high-net-worth individual looking to restructure existing finance secured against a residential property in Chelsea.

The property was valued at approximately £4.5 million and was used by the client’s family when in the UK. The client wanted to release equity from the property to support future property acquisition plans for family members.

The proposed refinancing presented several additional considerations. The client’s international background meant that some UK lenders could take a more cautious approach to the application. In addition, the property was held through a British Virgin Islands (BVI) structure administered by a Jersey trust, creating additional layers of ownership and credit assessment.

The existing financing arrangement also included approximately £1 million held as assets under management with the existing bank. The client wanted to avoid having to maintain this AUM requirement under the new facility, as releasing these funds would provide additional liquidity for future property acquisitions.

Enness identified a UK challenger bank with experience of considering more complex international cases and a flexible approach to the client's circumstances. Importantly, the lender was prepared to offer the required facility without requiring the client to place assets under management with the bank.

This meant that the existing £1 million AUM could potentially be released rather than remaining committed to the previous banking arrangement. The structure therefore provided both the required property finance and greater flexibility over the client's wider liquidity.

Following negotiations, Enness secured a 65% loan to value (LTV) facility against the £4.5 million Chelsea property, providing a £2.95 million capital raise.

The mortgage was arranged at a fixed rate of 3.24% for two years over a 10-year term at the time.

The case demonstrates how specialist mortgage finance can be particularly relevant where a high-value UK property is held through an offshore structure. Ownership arrangements, international residency, source of wealth and existing banking relationships can all influence the lenders able to consider a transaction.

For high-net-worth borrowers seeking to raise capital against a London property, specialist lender access can help identify structures that take the wider financial position and ownership arrangements into account.

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, valuation, property suitability and lender criteria. Terms, rates, LTVs, fees 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. Capital raising increases the amount secured against a property and may increase the overall cost of borrowing. Where assets or borrowing involve different jurisdictions or currencies, exchange-rate movements and changes in applicable regulations may also affect the overall position.