- Client: Successful Chinese business owner planning to relocate their family to the UK
- Property: Central London family home valued at approximately £2.95 million
- Challenge: Required a high LTV mortgage despite limited UK financial footprint and restrictions around transferring funds from China
- Finance: £2.5 million mortgage at 85% LTV, structured with a combination of interest-only and capital repayment
International clients looking to relocate to the UK can face additional challenges when arranging mortgage finance, particularly where their wealth and income remain overseas. Enness was approached by a successful Chinese business owner looking to acquire a family home in Central London ahead of relocating their family to the UK.
The property was valued at approximately £2.95 million, with the client looking to borrow around £2.5 million. This represented an 85% loan to value (LTV), significantly higher than the level many lenders would typically consider for a mortgage of this size.
The client’s income was generated through businesses based in China, while their family had not yet relocated to the UK. As a result, there was limited UK financial history available for a lender to assess. The client was also planning to relocate under a Tier 1 visa, adding an international element to the application and requiring careful consideration of the client’s wider circumstances.
Another important consideration was the movement of funds from China. Although the client had substantial financial resources through their businesses, Chinese currency controls meant that only limited capital was readily available outside the country to fund the deposit.
The combination of overseas income, limited UK financial footprint, currency restrictions and the requested 85% LTV meant that a conventional mortgage route was unlikely to provide the required flexibility. Enness therefore considered private banking options where the lender could assess the client’s wider wealth and business interests.
A further consideration was the client’s preference not to place assets under management with the mortgage lender. Enness therefore needed to identify a lender prepared to structure the facility without relying on an AUM relationship.
Following negotiations with a private bank, Enness secured a £2.5 million mortgage at 85% LTV over a 25-year term. The mortgage was structured with 75% of the borrowing on an interest-only basis and 10% on a capital-and-interest basis.
The agreed structure also allowed the client to make capital reductions of up to 10% per annum without an early repayment charge during the applicable early repayment period.
Several fixed-rate options were available at the time, including a two-year fixed rate of 2.24%, a five-year fixed rate of 2.49% and a 10-year fixed rate of 2.64%.
The case demonstrates how UK mortgage finance can be structured for international borrowers where income, wealth and available liquidity are concentrated overseas. High LTV requirements, overseas business interests and restrictions on international capital transfers can all affect the options available.
For international families looking to purchase a UK home while relocating from overseas, specialist large mortgage finance can provide access to lenders able to consider more complex international profiles, subject to individual circumstances and 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, property suitability and lender criteria. Terms, rates, LTVs, fees 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. Interest-only mortgages require a suitable strategy for repaying the capital at the end of the mortgage term. Where income or assets are held overseas, currency controls and exchange-rate movements may affect the availability or value of funds and the cost of borrowing.
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.
