Equity Release and Remortgage for HNW Portfolio Landlord
22nd September 2022
Key Figures:
- Client: UK National & Resident
- Property Value: £2,000,000
- Loan Amount: £1,500,000
- LTV: 75%
- Interest Rate: 2.24% Discount Variable
- Term: 3 years
It can make a lot of sense to release funds from high-value property to invest it elsewhere for a higher rate of return. As a result, record numbers of UK homeowners are taking advantage of fixed-rate equity release products. According to the Equity Release Council, homeowners released £1.6bn bringing the total amount for the first six months to £3.13bn. The first quarter of this year saw more than 23,000 customers looking for equity release products - a significant increase from the historical high of 12,891 in 2018.
In this case, our client was a 65-year old portfolio landlord interested in releasing equity from his main residence for further investment purposes. Although the client had no earned income aside from rental income, their property portfolio was worth £15million.
Tapping into our network of 500 lenders, we sourced a lender that could structure funding requirements specifically around the client's situation. This specialist lender, namely, a building society, could take the HNW approach by looking at the equity in the portfolio which was in excess of £3million. Here, no generic affordability assessments or income multiples were required as the lender could get comfortable with serviceability.
As this example illustrates, Enness has close relationships with specialist lenders in this area, and your broker will know how you need to present your case and what lenders will want to see to be able to make a lending decision. Enness’ recommendation and introduction will often go a long way towards securing funds, and the application process will be streamlined and quick. As long as your figures add up and you have further collateral to give lenders comfort, equity release is often a very straightforward decision for lenders.
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