Ultra-High-Net-Worth Bridging Finance for Complex Property Funding

• Client: US citizen and UK resident
• Property: 1,000-acre country estate in Hampshire valued at £26M
• Loan amount: £5M
• LTV: Approximately 19%
• Term: 24 months
• Interest rate: 8.4% per annum

High-net-worth borrowers with substantial property assets can sometimes require short-term finance where an existing facility is approaching maturity and longer-term refinancing or a sale cannot be completed within the available timeframe. Enness was approached by a US citizen and UK resident with significant wealth who required a bridging facility secured against a substantial country estate in Hampshire.

The client owned a 1,000-acre commercial estate with a range of uses, including farming, fishing and shooting. The estate was valued at approximately £26M and represented significant underlying security for the proposed borrowing.

The existing mortgage was approaching expiry and the incumbent lender was unwilling to extend the facility. With the property ultimately intended to be marketed and sold, the client required sufficient time to prepare and market the estate properly rather than being forced into a rushed sale or an unsuitable long-term refinancing arrangement.

Enness was instructed to source a £5M bridging facility for an initial period of 24 months. Against the £26M valuation, this represented an LTV of approximately 19%, providing a substantial level of equity in the underlying property.

The principal challenge was identifying a lender prepared to consider the nature and scale of the estate, together with the proposed exit through the eventual sale of the property. The unusual nature of the asset meant that a conventional lender was unlikely to provide the flexibility required within the available timeframe.

Enness approached a specialist bridging lender and presented the wider circumstances of the transaction, including the substantial value of the estate and the proposed repayment strategy. Following discussions, the lender was comfortable with the available security and agreed to provide the required £5M facility.

The resulting bridging loan was arranged for 24 months at an interest rate of 8.4% per annum. The structure provided the client with additional time to prepare the estate for sale and repay the borrowing from the eventual disposal proceeds.

There was a further complication during the refinancing process when the client’s existing buildings insurer withdrew cover. Given the size and nature of the estate, maintaining appropriate insurance was an important consideration for both the borrower and lender.

Enness was able to assist with this aspect of the transaction by arranging replacement insurance through a package negotiated directly with a Lloyd’s of London underwriter. This helped address the insurance requirement alongside the financing and allowed the wider transaction to progress.

The case demonstrates how bridging finance can provide a temporary funding solution for high-net-worth borrowers where an existing facility is reaching maturity and a property sale or longer-term financing solution requires additional time. In this instance, the substantial value of the underlying estate and relatively low LTV provided important support for the proposed facility.

For UHNW borrowers with substantial property assets and complex refinancing requirements, specialist lender access can help identify potential solutions where conventional finance may not provide the required flexibility. Each application remains subject to valuation, underwriting, lender criteria, affordability and the proposed exit strategy.

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, due diligence and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances.

Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Bridging finance is short-term borrowing and can carry higher costs than longer-term finance. Borrowers should ensure that a realistic and achievable exit strategy is in place. Property values can fall as well as rise, and borrowers may face additional costs if the intended sale or refinancing is delayed. Where other assets are provided as security, these may also be at risk if the borrowing is not repaid.