Securing a Mortgage for a Jersey Resident

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Key facts:

• Borrower: Jersey resident 
• Property: Existing land and buildings purchased for development
• Property value: £1,250,000
• Loan: £1,000,000
• LTV: 80%
• Interest: 7.50%

Arranging a high value mortgage for Jersey resident. 

Our client is a local individual whose only income comes from their work as a property developer. The client had liquid cash, but no other assets to be used as leverage. A new development project had been identified, and we were asked to source funding to firstly acquire the site, and secondly fund the development post-acquisition. The project would need planning consent, so the client was looking for the maximum LTV possible so that some of their available cash could be used to fund the work required to obtain consent. 

There are limited players in the development arena in Jersey, and finance can often be costly with the heavy arrangement and exit fees.

Enness was able to use its extensive list of contacts to source a private individual who was happy to provide the acquisition finance for a term of 18 months, giving our client sufficient time to secure planning consent. Not only was the deal structured without any arrangement or exit fees, but we were able to negotiate the roll-up of loan interest for the entire term of this Jersey mortgage loan. When plans are passed and a development appraisal has been prepared, the lender has the first refusal on the development finance.

In general, there is a misnomer around private finance in that it’s more expensive than conventional sources. This example shows that’s not always the case, with the added benefit that private lenders are often far more pragmatic when it comes to negotiating terms. Learn more about mortgages in Guernsey.