- Loan Amount: £1.7M
- Combined Property Value: Circa £13M
- Charge: Second Charge
Enness recently assisted a high-net-worth individual in securing a £1.7M residential bridging loan to meet an urgent liquidity requirement after being unexpectedly let down by their private bank. The client owned two high-value properties: a London residence valued at close to £9M and an estate in the South West of England worth approximately £4M, both of which held significant equity.
A key challenge was that the London property was already mortgaged with a lender that had substantial early repayment charges (ERCs). Refinancing the existing facility would therefore have resulted in significant costs, making a second-charge solution an alternative approach that allowed the existing mortgage arrangements to remain in place.
Enness identified a lender able to take second charges across both properties, allowing the client to raise the required capital without refinancing their existing mortgage arrangements. The facility was structured against the combined property security on the agreed terms.
The available property security and proposed exit strategy allowed the lender to assess the transaction, while a streamlined legal process helped the funds to be released within the required timeframe. This gave the client access to the required liquidity while avoiding the potentially significant ERCs associated with refinancing the existing mortgage.
This case demonstrates how second-charge bridging finance can provide a source of liquidity for high-net-worth clients who have substantial property equity but wish to retain their existing mortgage arrangements. By considering multiple properties as security, Enness was able to explore a financing structure aligned with the client's circumstances and time-sensitive requirement.
If you are looking to raise capital against an existing property portfolio without refinancing a first-charge mortgage, speak to a mortgage specialist to explore your options.
Important: Second-charge bridging finance is short-term borrowing and requires a credible and achievable repayment or exit strategy. Where repayment depends on a future source of funds, delays, changes in property values or market conditions may affect the anticipated exit and the overall cost of borrowing. Existing first-charge mortgage terms and any applicable early repayment charges should also be considered when assessing the overall financing structure.
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.
