- Client: Middle Eastern national and UK resident
- Property Value: Circa £5 million
- Purpose: Short-term finance pending the sale of a main residence
Enness was approached by a Middle Eastern national who had lived in the UK for many years and was looking to downsize from a London residence valued at approximately £5 million.
The client needed short-term funding while the property sale progressed. There were existing arrangements connected to the property that were important to the client and needed to remain in place, so simply replacing the existing structure with a conventional facility was not suitable.
The circumstances meant that lender selection was particularly important. A number of lenders were willing to consider the transaction but wanted to introduce specific conditions or caveats that the client was not comfortable with. The challenge for Enness was therefore to find a lender that could understand the existing structure while providing the liquidity required without imposing terms that would interfere with the client's plans.
Enness explored specialist options and identified an offshore bridging finance provider that was comfortable with the client's circumstances and the structure surrounding the property.
The lender was able to provide the required short-term finance without imposing the additional conditions that had been raised by other lenders. The facility also offered a competitive interest rate, which represented a saving compared with the private banking facility the client had previously been using.
This gave the client the liquidity needed while waiting for the sale of their existing property to progress, without having to make changes to the arrangements they wanted to retain. The solution also provided a more cost-effective alternative to the client's previous financing arrangement.
The case demonstrates why short-term property finance can require a more considered approach when an existing property has complex arrangements attached to it. For high-value property owners, the most suitable solution is not always simply the lender offering the lowest headline rate; the structure, conditions and flexibility of the facility can be equally important.
For clients who need temporary funding while selling a property or managing a time-sensitive transaction, bridging finance can provide short-term liquidity without requiring the client to wait for the longer-term transaction to complete.
If you require short-term finance against a high-value property, speak to a mortgage specialist to discuss your requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Bridging finance is short-term borrowing and may carry higher costs than conventional mortgage finance. Finance is subject to status, valuation, underwriting and lender criteria. Property values can fall as well as rise, and failure to meet repayment obligations could put the secured property at risk.
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.
