London has a wide range of high-value new-build developments, but arranging finance against a newly constructed property can be more complicated than buyers might expect. This is particularly true where a borrower is looking for a high loan-to-value (LTV) mortgage on a property worth several million pounds.
I recently assisted a successful banker who was looking to purchase a new-build flat in London valued at £2 million. The client wanted to contribute a 20% deposit, meaning he required an 80% LTV mortgage.
This immediately narrowed the available options. Lenders can be more cautious when assessing new-build properties because there may be fewer comparable transactions available to establish the property's value. At the time of the application, many lenders were limiting the LTV they would offer on higher-value new-build properties.
The client’s income also required a more tailored approach. He had recently been promoted, meaning his latest payslips did not yet reflect his increased salary. A significant proportion of his overall remuneration also came from bonuses, and he needed a lender prepared to take a substantial proportion of this variable income into account when assessing affordability.
With the client having already committed a significant deposit to the purchase, finding a suitable lender within the required timeframe was particularly important.
Given my experience arranging finance for senior banking professionals with bonus-based remuneration, I knew that a private bank was likely to offer greater flexibility than a conventional lender. I approached a lender that was prepared to take a broader view of the client's income and overall financial position.
The lender agreed to provide the required £1.6 million mortgage, representing 80% LTV against the £2 million property. The terms secured at the time included a two-year fixed rate of 1.65%.
To help manage the client's monthly commitments, I was also able to arrange a 31-year term. This provided the client with the higher LTV he required while accommodating his recently increased salary and bonus-based remuneration.
The case demonstrates why million pound mortgage expertise can be particularly valuable when financing a high-value new-build property. It also highlights the importance of working with lenders who understand complex remuneration structures, particularly where a borrower’s income includes significant bonuses.
For senior professionals seeking substantial borrowing, specialist lender access can help identify solutions where standard affordability calculations do not fully reflect the borrower’s wider financial 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, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise.
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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.
