At Enness, we regularly work with clients who own valuable property outright and want to make better use of the capital tied up in it. Refinancing an unencumbered property can provide an opportunity to release funds for other investments while retaining ownership of the underlying asset.
I recently assisted a wealthy international client who was living in the UK and looking to raise capital against a property in an exclusive London postcode. As a self-employed individual, the client’s personal income did not provide a straightforward picture of their overall wealth.
The client ran a charitable foundation and therefore maintained a relatively modest personal salary, while much of their wealth was held across a substantial property portfolio and other global assets. Among these holdings was an unencumbered London property valued at approximately £10 million, which had originally been purchased for around £7 million.
The objective was to unlock some of the capital held within the property and use it across a number of different areas. The client wanted to invest in higher-yielding assets, including a rental property portfolio and liquid investments, while also continuing to support their charitable interests.
The combination of an international background, complex wealth structure and diverse investment objectives meant that a conventional lender was unlikely to be the right fit. The case required a lender willing to look beyond traditional salary-based affordability and consider the client’s wider financial position.
OUR SOLUTION
I approached a niche international lender with which Enness had an established relationship. After presenting the client’s wider circumstances and explaining how the proposed borrowing would be used, the lender was comfortable taking a broader view of the application.
The lender agreed to provide a £6.5 million facility against the property on a fixed-rate basis. This allowed the client to access a substantial proportion of the equity held within the unencumbered property while retaining ownership of the asset.
The case highlights how releasing equity from property can be considered by clients who want to put existing property wealth to work elsewhere. For high-net-worth borrowers with significant assets but a less conventional income profile, the right lender can take a much broader view of their overall circumstances.
It also demonstrates the value of specialist international mortgage expertise when a borrower’s wealth, assets and financial interests span multiple jurisdictions.
For clients looking to raise substantial borrowing against a high-value property, large mortgages can provide a route to accessing significant capital, subject to lender criteria and the individual circumstances of the borrower.
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.
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.
