- Property Value: Above £2 million
- Loan Amount: Circa £1.3 million
- Purpose: Short-term finance for a new family home
Enness was approached by a couple looking to upsize their family home while initially retaining their existing property. Their wealth and asset profile meant that a conventional long-term mortgage was not suitable, so they needed a short-term financing solution that would allow them to secure the new property without having to liquidate a significant amount of their wealth.
The clients could have purchased the property in cash, but preferred to preserve their liquidity for their wider financial plans. The challenge was finding a lender able to consider their overall financial position and provide suitable short-term finance on terms appropriate to the proposed transaction.
Enness reviewed the clients’ circumstances and identified a lender able to take a broader view of their financial position. The facility was structured against both the existing property and the new purchase, allowing the overall loan-to-value to remain lower than it would have been against the new property alone.
This structure provided the clients with the flexibility to proceed without committing a large proportion of their available cash. Enness moved quickly, with the financing arranged within a matter of days.
The speed of the solution was particularly important. Having finance already lined up allowed the clients to support an offer below the property’s estimated market value with a clear understanding of their proposed funding structure, helping them to proceed within the vendor’s required timeframe.
The case demonstrates how using multiple properties as security can sometimes provide greater flexibility when arranging short-term finance. For clients with substantial assets but a preference to preserve liquidity, the right structure can provide access to funding without requiring them to commit all of their available cash to a purchase.
If you or your clients are considering short-term finance for a property purchase and have a complex wealth or asset profile, speak to a mortgage specialist to discuss your circumstances.
BRIDGING FINANCE IS SHORT-TERM BORROWING AND REQUIRES A CREDIBLE EXIT STRATEGY. DELAYS, CHANGES IN MARKET CONDITIONS OR ASSET VALUES MAY AFFECT THE EXIT AND OVERALL COST OF BORROWING.
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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.
