- Portfolio: Properties across Brighton
- Portfolio value: £26M
- Loan amount: £8M
- LTV: Approximately 31%
- Mortgage type: Interest-only
- Fixed-rate options: 3.25% for two years or 3.55% for five years
- Property types: Land, development sites, commercial and residential property
Refinancing a substantial property portfolio can require a different approach from arranging finance against a single asset. Enness was approached by a professional landlord who had built their wealth through real estate and was looking to refinance a diversified portfolio of property and land in Brighton.
The portfolio comprised a combination of land, development sites, commercial property and residential property with a total value of approximately £26M. The client required £8M of mortgage finance, equivalent to an overall loan to value (LTV) of approximately 31%.
One of the key considerations with portfolio finance is the ability to assess multiple assets collectively rather than considering each property in isolation. A diversified portfolio can contain different property types, income profiles and future investment opportunities, making the overall structure more complex than a standard residential mortgage.
The client was also looking for an interest-only structure. This can provide greater flexibility over monthly cash flow, although the capital remains outstanding and requires an appropriate repayment strategy at the end of the agreed term.
Enness assessed the portfolio as a whole and explored suitable funding options with lenders experienced in larger property transactions. The relatively low overall LTV provided substantial equity across the portfolio, while the diversity of the underlying assets required a lender comfortable with a combination of residential, commercial and development-related property.
Following the funding process, two fixed-rate options were available to the client: 3.25% fixed for two years or 3.55% fixed for five years. The mortgage was structured on an interest-only basis, allowing the client to consider the option that best suited their intended timeframe and wider financial planning.
The case demonstrates how property portfolio finance can provide an alternative to arranging separate facilities against individual properties. For professional landlords with substantial holdings, consolidating or refinancing portfolio debt can provide greater visibility over the overall borrowing structure and potentially release capital for future investment, subject to lender criteria.
Enness works with lenders across the residential, commercial and specialist property finance markets. For landlords considering portfolio refinancing, the appropriate structure will depend on the assets held, overall LTV, income, existing borrowing, proposed use of funds and individual 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, valuation, affordability, due diligence and lender criteria. Rates, terms, LTVs, fees and availability may vary depending on individual circumstances. The rates stated above relate to the case at the time and are not indicative of current or future pricing.
Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Interest-only borrowing requires the outstanding capital to be repaid at the end of the agreed term or when otherwise due. Property values can fall as well as rise, and changes in rental income, market conditions or the value of development assets may affect the ability to service or refinance borrowing. Borrowers should ensure that a suitable repayment and exit strategy is in place.
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.
