- Client: UHNW individual
- Portfolio: Four buy-to-let properties in Central London
- Portfolio value: £35M
- Loan amount: £18M
- LTV: Approximately 51%
- Mortgage type: Interest-only
- Term: Five years
- Purpose: Refinance refurbished properties onto a single facility
- Structure: Dry lending
Refinancing a substantial buy-to-let portfolio can become more complex when multiple properties need to be consolidated under a single lender. Enness was approached by an ultra-high net worth individual who was looking to refinance a portfolio of four recently refurbished properties in Central London.
The client was the chairman of a diversified group of companies with interests spanning automotive distribution and services, real estate and investments, retail, food and beverage, engineering, technology, media and entertainment. The client had spent several years refurbishing the four Central London properties and was now looking to transition the portfolio into its next stage as a rental investment.
The properties had a combined value of approximately £35M, with existing debt of £18M. This represented an overall LTV of approximately 51%, providing substantial equity across the portfolio. The client wanted to refinance the existing borrowing with a single lender rather than maintain separate arrangements across the individual properties.
Another important consideration was the proposed structure. The client was seeking dry lending, meaning there was no requirement to transfer additional investment assets to the lender as part of an assets-under-management arrangement. This significantly narrowed the pool of potential lenders, particularly given the size of the facility and the value and nature of the underlying properties.
Enness assessed the portfolio as a whole and approached lenders experienced in high-value buy-to-let and complex property finance. The objective was to identify a lender comfortable with the scale of the borrowing, the Central London properties, the proposed rental strategy and the client’s requirement for a consolidated facility.
Following negotiations, Enness secured an £18M mortgage against the £35M portfolio. The facility was structured over five years on an interest-only basis, allowing the client to retain greater flexibility over the portfolio’s cash flow while the properties were transitioned into their intended rental strategy.
The case demonstrates the potential advantages of taking a portfolio-wide approach to refinancing. For experienced property investors, consolidating borrowing against several assets can provide a clearer overall debt structure while potentially simplifying the management of the portfolio.
Enness works with traditional banks, private banks and specialist lenders across the property finance market, including lenders able to consider substantial buy-to-let portfolios and bespoke structures. The appropriate solution will depend on the properties, valuation, LTV, rental income, existing debt, borrower circumstances and individual lender 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, valuation, due diligence and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances. The terms described relate to the historical case and are not indicative of current or future pricing.
Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Interest-only borrowing requires the outstanding capital to be repaid at the end of the agreed term or when otherwise due. Buy-to-let investments are subject to property market and rental market risks, and changes in property values or rental income may affect the ability to service or refinance borrowing. Borrowers should ensure that a suitable repayment and exit strategy is in place.
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.
