- Client: Kyrgyzstan resident and ultimate beneficial owner (UBO)
- Legal borrower: BVI limited company
- Property: London property valued at £8.5M
- Purpose: Equity release for further UK property investment
- LTV: 100%
- Assets under management: £5.5M
- Interest rate: 2.25% plus Bank of England Base Rate
- Product: Five-year interest-only mortgage
Arranging mortgage finance for international clients can become more complex where the borrower has an overseas residency, a corporate ownership structure and a substantial but complex source of wealth. Enness was approached by an introducer on behalf of a client who was resident in Kyrgyzstan and looking to release equity from an unencumbered London property.
The client wanted to use the released capital to pursue further investment opportunities within the UK property market. Rather than selling the existing property or using other liquid assets, the proposed structure allowed the client to leverage the property while retaining ownership of the underlying asset.
The property was valued at approximately £8.5M and was owned without existing mortgage debt. The legal borrower was a BVI limited company, with the client acting as the ultimate beneficial owner. This corporate structure, combined with the client’s Kyrgyzstan residency and international source of wealth, meant that the application required careful lender selection and due diligence.
One of the main challenges was the client’s international profile. Lenders assessing overseas borrowers need to understand the source of wealth, source of funds and wider financial circumstances before considering a substantial UK property facility. The corporate ownership structure added another layer to the lender’s assessment.
The client was also seeking a particularly high level of borrowing relative to the property value. The required structure was based on 100% loan to value (LTV), making this a specialist transaction rather than a conventional residential mortgage application.
Enness approached lenders with experience of international borrowers and high-value UK property. The application was presented around the strength of the underlying property, the client’s wider assets and the proposed investment strategy, while taking into account the additional due diligence required for the international ownership structure.
Following negotiations, Enness secured an 100% LTV mortgage on an interest-only basis. The facility was arranged at a rate of 2.25% plus the Bank of England Base Rate over a five-year term.
The arrangement also included £5.5M of assets under management (AUM). This formed an important part of the overall structure and allowed the lender to take a broader view of the client’s financial position when considering the high LTV requirement.
The client ultimately released £3M in cash to support further investment in UK real estate. The remaining funds were retained within the lender’s AUM arrangement, creating a structure that provided access to capital while maintaining a significant investment relationship with the lender.
The case demonstrates how London mortgages for international clients can be structured around complex ownership and wealth profiles. While a 100% LTV requirement is outside the parameters of conventional mortgage lending, private banks and specialist lenders may consider bespoke structures where the overall financial position, assets and security support the proposed facility.
For international clients looking to release equity from UK property for further investment, specialist mortgage expertise can help identify lenders able to consider overseas residency, corporate ownership structures and substantial property assets, subject to lender criteria, due diligence and individual circumstances.
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, property suitability, due diligence and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances.
Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Property values can fall as well as rise. Interest-only borrowing does not reduce the capital balance during the interest-only period, so borrowers should have an appropriate repayment strategy in place. Leveraged property investment can increase both potential returns and potential losses, and borrowers should consider the risks associated with property values, interest rates, refinancing and the ability to repay the borrowing.
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.
