Enness was approached by a group of Italian non-dom clients seeking finance for an off-plan buy to let investment in London. The purchase was being made through a Special Purpose Vehicle (SPV), with the clients acting as directors of the company.
The investors were looking to gain exposure to the London property market through a new build apartment in Embassy Gardens, part of the wider Nine Elms regeneration scheme in South West London. The property was valued at approximately £982,000 and the clients were seeking borrowing at 50% loan to value (LTV).
There were several factors that made the application more complex. The borrowers had no established UK footprint and were seeking a buy to let mortgage through an SPV. The purchase was also structured as an assignable contract, which can create additional considerations for lenders when assessing the underlying property and purchase price.
The clients had sufficient capital to purchase the property without borrowing, but wanted to retain liquidity while taking advantage of available mortgage finance. They also wanted a structure that offered flexibility should they decide to sell the investment in the future.
OUR SOLUTION
Enness approached an international private bank with experience in international borrowers and more complex ownership structures. The lender was comfortable assessing the directors’ wider financial position, including their international income and source of wealth.
The SPV structure required particular consideration, as the lender needed to assess the directors alongside the company. The number of directors involved also made the application less straightforward than a typical SPV transaction.
The lender was comfortable with the proposed investment and instructed an independent valuation to assess the property. This provided additional assurance around the security and allowed the application to progress.
The resulting facility was structured over 5 years on an interest-only basis. The historic arrangement also included early repayment charges of 1% for the first 2 years, providing the clients with a defined structure while retaining flexibility around their longer-term plans.
This case demonstrates how specialist lender knowledge can be valuable when arranging buy to let finance for international investors using an SPV. By considering the borrowers’ wider financial circumstances alongside the property and ownership structure, Enness was able to identify a lender prepared to consider the application.
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, property suitability and lender criteria. Terms, rates, LTVs 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.
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.
