- Client: High-net-worth individual
- Existing Property Value: Approximately £1.4 million
- New Property Mortgage: Approximately £1 million
- New Property LTV: 75%
- Term: 25 years
Enness was approached by a high-net-worth client who had agreed an attractive purchase price on a new home. The client intended to sell their existing property to help fund the move, but the sale was unlikely to complete quickly enough to meet the required completion date.
This left the client facing a potential funding gap. A bridging loan could have provided a short-term solution, but the client wanted to avoid unnecessarily expensive short-term borrowing where a more suitable option might be available.
Enness reviewed the client’s wider financial position and identified an opportunity to structure the borrowing across both properties. Because the client’s overall wealth was within the appetite of a private bank, we were able to explore a longer-term lending solution rather than relying solely on a conventional bridge.
The resulting structure provided sufficient funds to cover the deposit and stamp duty required for the new purchase, allowing the client to proceed without needing to contribute additional cash. Once the existing property was sold, the borrowing secured against it could be repaid.
The mortgage against the new property was approximately £1 million, representing 75% LTV. The facility was structured on a five-year fixed rate with a 25-year term and a full interest-only repayment structure. This gave the client greater certainty over their monthly payments while retaining flexibility around their longer-term plans.
The client intended to maintain borrowing against the new property following the sale of their existing home. The longer-term structure therefore provided a more appropriate solution than using short-term bridging finance simply to overcome the timing difference between the two transactions.
The case demonstrates why a funding requirement that initially appears to call for bridging finance can sometimes be addressed differently when the borrower’s wider wealth and asset position are considered. For high-net-worth clients, looking at the complete financial picture can open up alternative structures that may provide greater flexibility and potentially lower overall borrowing costs.
If you are selling one property while purchasing another and need to manage a timing gap between the two transactions, speak to a mortgage specialist to explore your options. Enness can also assess private bank mortgage solutions where a client’s wider wealth and assets may support a more tailored structure.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, affordability, underwriting, property assessment and lender criteria. Terms and availability will vary depending on individual circumstances and the proposed transaction. Interest-only borrowing requires a suitable repayment strategy, and the value of property 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.
