Pre-Funded Short-Term Mortgage to Fund the Purchase of London Family Home

• Clients: Dual Nationals
• Property: London residence valued at circa £2 million
• LTV: 60%
• Term: 2-year pre-funded loan

Enness was approached by dual-national clients looking to purchase a residence in London. The clients already owned a second home in Europe which they intended to sell, meaning they did not require a conventional long-term mortgage and instead wanted a financing solution that could bridge the period until the European property was sold.

Although the clients had substantial assets, their declared income was not sufficient to meet the affordability requirements of a traditional mortgage. Standard lenders typically place significant emphasis on income reported through tax returns, which did not accurately reflect the clients’ wider financial position. We therefore needed to identify a lender willing to take a more holistic view of their wealth and circumstances.

The clients also knew that they intended to repay the borrowing within a relatively short period, making a conventional five-year or longer mortgage unsuitable for their requirements. A standard bridging facility initially appeared to be a potential solution, but most bridging loans have relatively short maximum terms, typically around 12 months. This did not provide sufficient time for the clients to sell their European property and repay the borrowing.

Enness therefore explored an alternative structure with one of its private lenders. We identified a flexible facility with similar characteristics to bridging finance but with a longer term that better matched the clients’ circumstances.

The facility was structured as a two-year pre-funded loan, with the interest costs incorporated into the facility itself. This meant the lender could assess the application without relying on a traditional income-and-expenditure assessment in the same way as a conventional mortgage. The structure also gave the clients sufficient time to sell their European residence and repay the borrowing without being restricted by a standard short-term bridge.

Importantly, the facility provided an alternative to conventional bridging finance without the same level of interest costs typically associated with a short-term bridge. By structuring the finance around the clients’ anticipated exit rather than their declared income alone, Enness was able to provide a solution that aligned more closely with their wider financial position and intended timeframe.

The resulting 60% LTV facility allowed the clients to proceed with the London property purchase while retaining the flexibility required to sell their European residence and repay the borrowing within two years.

This case demonstrates how alternative private lending can provide flexibility where a borrower has substantial assets but does not fit conventional income-based affordability criteria. It also highlights the importance of matching the term and structure of a loan to the borrower’s intended exit, rather than automatically relying on either a standard mortgage or short-term bridging facility.

If you are looking to finance a property purchase but have complex income, substantial assets or a shorter-term borrowing requirement, speak to a mortgage specialist to discuss your circumstances.

Risk Warning:
Property finance carries risks. Mortgages and other forms of property-backed finance are secured against property, and failure to meet the terms of the facility could result in enforcement action against the secured property. Borrowers should ensure that they have a realistic and achievable repayment strategy, particularly where repayment depends on the sale of another property.

Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, property assessment and lender criteria. Terms, rates and availability will vary depending on individual circumstances and the proposed transaction.