Unlocking Equity in Real Estate to Facilitate UK Property Acquisition

• Client: International property investor
• Additional Finance Required: £500k
• Existing Property: Balearic Islands property valued at €1 million+
• Maximum LTV: 60%
• Term: 25 years, fully amortised
• Rate: Fixed or variable

Enness was approached by a client who was in the process of purchasing a property in the UK. Their existing bank was prepared to finance 70% of the property’s value, but the client required an additional £500k to complete the acquisition.

Although the client could complete the purchase using cash, they wanted to structure the transaction in a way that suited their wider financial objectives. More expensive short-term solutions such as bridging finance or a second charge were therefore not appropriate for their requirements.

During the assessment of the client’s wider property portfolio, Enness identified an opportunity to use an existing property in the Balearic Islands as security. The property was valued at more than €1 million and provided an opportunity to release equity without requiring the client to sell the asset.

Enness identified a lender able to consider the Balearic property as security and structured a long-term facility with a maximum LTV of 60%. The proposed loan was fully amortised over a 25-year term, providing the client with a longer-term financing solution rather than the short-term borrowing considered unsuitable for their requirements.

The structure also gave the client flexibility over the interest rate, with the option to choose between a fixed or variable rate depending on their preference and wider financial objectives.

By releasing equity from the Balearic property, the client could raise the additional £500k required to complete their UK acquisition without having to sell the property or rely on a short-term bridging or second-charge facility. This allowed them to retain their existing asset while completing the purchase.

The case demonstrates the value of considering a client’s wider international property portfolio when arranging finance. Rather than focusing solely on the property being acquired, Enness was able to identify available equity elsewhere and use it to create a financing solution aligned with the client’s objectives.

For clients with international property assets who are looking to release equity or raise capital for a new acquisition, international mortgage solutions can provide an alternative to more expensive short-term borrowing. Speak to a mortgage specialist to discuss your circumstances.