£7 Million Prime Chelsea Property - High Value Loan Secured for Mortgage

• Client: French national and UK resident
• Property: Chelsea property valued at £7M
• Mortgage amount: £4.9M
• LTV: 70%
• Mortgage type: Interest-only
• Fixed rate: 2.6% for two years

Arranging a high-value mortgage can become more complex where a property is held through a corporate structure and the borrower is looking to restructure the ownership at the same time as securing mortgage finance. Enness was approached by a French national and UK resident looking to purchase the Chelsea property they were already renting for approximately £7M.

The client was part of an ultra-high-net-worth family with extensive international business and investment interests. The wider family business interests included private banking, private equity and a substantial portfolio of wineries. While the client had significant financial backing, the proposed ownership structure required a lender comfortable with a more bespoke approach.

The property was held within a Panamanian company, and the client intended to acquire the company and subsequently de-envelope the property. This meant that the financing needed to accommodate the proposed transition from corporate ownership to personal ownership.

The client was looking to secure mortgage funding of £4.9M against the £7M property, representing a 70% loan to value (LTV). The requested mortgage was also structured on an interest-only basis.

One of the key considerations was how the lender would structure security while the ownership arrangements were being changed. Rather than relying solely on the property as security, the lender was prepared to provide the mortgage in the client’s personal name while taking security over assets held within the company.

This required coordination between the client, the lender and the relevant professional advisers to ensure the proposed ownership and security structure could be implemented appropriately. The transaction therefore required a lender capable of considering the wider financial circumstances rather than relying solely on standard residential mortgage criteria.

Enness approached its private banking contacts and negotiated a bespoke structure around the client’s requirements. The resulting facility provided £4.9M of mortgage funding against the £7M Chelsea property, representing 70% LTV.

The mortgage was arranged on an interest-only basis with a rate of 2.6% fixed for two years at the time. The structure allowed the client to purchase the property personally while the lender took additional security over assets held within the corporate structure.

The case demonstrates how a high-value mortgage can be structured where a borrower is dealing with corporate ownership, additional security and a significant property purchase. For high-net-worth and ultra-high-net-worth borrowers, the ownership structure and wider asset position can be important factors when determining which lenders are able to consider a transaction.

Enness works with private banks and specialist lenders on complex property transactions, including million-pound mortgages. Each application is assessed according to the borrower’s individual circumstances, property, assets, ownership structure 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 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. Interest-only borrowing does not reduce the capital balance during the interest-only period, so borrowers should have an appropriate and realistic repayment strategy in place. Where additional assets are provided as security, those assets may also be at risk if the borrowing is not repaid.