- Client: UHNW individual, represented by an Isle of Man fiduciary
- Properties: Five-bedroom terrace in St John’s Wood and six-bedroom terrace in South Kensington
- Combined property value: £13.85M
- Mortgage amount: £5M
- LTV: Approximately 36%
- Mortgage rate: 2.75% above Bank of England Base Rate
- Ownership structure: Isle of Man SPV
Complex ownership structures can create additional challenges when arranging substantial UK property finance, particularly where an offshore company is involved. Enness was approached by an Isle of Man fiduciary on behalf of a UHNW client who was looking to restructure the ownership of a substantial Central London property portfolio while maintaining the existing corporate structure.
The client had accumulated significant wealth following the successful sale of a business and was subsequently focused on high-end property investment. The portfolio comprised two prime residential properties: a five-bedroom terrace in St John’s Wood and a six-bedroom terrace in South Kensington, with a combined value of approximately £13.85M.
The properties were held through an Isle of Man SPV. Following changes to the tax environment, it was no longer considered cost-effective for the property to remain within the existing trust structure. The client therefore wanted to bring the property ownership onshore while retaining the Isle of Man SPV.
This created a specific lending requirement. The client needed a lender comfortable with the proposed ownership structure and the presence of an offshore SPV, while also being able to provide a substantial mortgage against high-value Central London residential property.
The overall level of borrowing was relatively conservative against the value of the portfolio. The client required £5M of mortgage finance against assets worth approximately £13.85M, representing an LTV of approximately 36%. However, the offshore ownership structure meant that a conventional high-street mortgage was unlikely to provide the flexibility required.
Enness therefore approached lenders with experience of high-value property and more complex corporate structures. The focus was on presenting the client’s wider financial position and the proposed ownership arrangements clearly, while identifying a lender comfortable with the Isle of Man SPV.
Following discussions and negotiations, Enness secured a £5M mortgage against the portfolio at a rate of 2.75% above the Bank of England Base Rate at the time. The structure allowed the client to proceed with the intended restructuring while maintaining the SPV ownership structure.
The transaction demonstrates the importance of lender selection when arranging finance against property held through an offshore corporate structure. While the underlying property value and relatively conservative LTV provided strong security, the ownership arrangements required a lender prepared to consider the wider circumstances of the transaction.
Enness works with private banks and specialist lenders on high-net-worth mortgages, including substantial UK property transactions involving complex ownership structures. The appropriate financing solution will depend on the borrower’s circumstances, property, ownership structure, available security and the relevant lender’s 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, affordability, valuation, property suitability, due diligence and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances. Any tax, trust or corporate structuring considerations should be assessed with appropriately qualified professional advisers.
Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Property values can fall as well as rise. Where property is held through a corporate or offshore structure, borrowers should consider the additional legal, tax, regulatory and administrative implications with their professional advisers. Borrowers should also ensure that an appropriate strategy is in place to meet all mortgage obligations.
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.
