When it comes to property ownership, there are two fundamentally different forms: freehold and leasehold. The former means you own the building and the land it stands on outright, in perpetuity. Leasehold, on the other hand, means you just have a lease from the freeholder which gives you the right to live in a property for a set period of time.
Despite millions of people owning a flat or maisonette on a lease, this type of home ownership can be complex as the property value reduces in value over time. The shorter the lease, the less valuable the property becomes. For this reason, leaseholders will often consider extending their lease and are allowed to do so after they have owned a property for two years.
In this case, we were approached by a Saudi Arabian national and resident who was looking for a lease extension for their Chelsea apartment. The property in question had been purchased with cash for £2.5million with a 10-year lease. The client was now looking to extend the lease to 999 years for £1.5million, which he needed a loan for. Once extended, the property would be valued at £3.2million.
The client ran multiple successful business ventures and was a chairman of an entertainment company based in Saudi Arabia with earnings in SAR (Saudi riyal), making them a complex borrower. In cases like this, working with a broker who understands how the lenders view your situation and what will give them comfort is critical to securing a mortgage quickly. Enness’ brokers are specialists in sourcing property finance for non-UK residents and will achieve the best rates available.
Considering the client's multiple income streams and foreign currency income, we approached a private bank that would take a more holistic analysis of their overall wealth and net worth. The bank was able to offer our client a competitive £1.55million mortgage with a 5-year fixed term.