Remortgage of Luxury London Property for International Client

• Client: International high-net-worth property investor with business interests in the UAE
• Property: Luxury Mayfair flat valued at approximately £7.2 million
• Challenge: Required approximately £4.5 million of capital while the property was undergoing a substantial lease extension
• Finance: £4.5 million dry loan at 3.25% above Bank of England Base Rate at the time

Arranging a substantial mortgage against a luxury London property can become more complex where the borrower has an international financial profile and the property itself is undergoing significant changes. Enness was approached by a high-net-worth property investor looking to refinance a luxury Mayfair property and release capital from the asset.

The property was valued at approximately £7.2 million and was held in the name of the client’s company. The client was looking to raise a dry loan of approximately £4.5 million against the property, providing additional liquidity while retaining ownership of the asset.

The client’s international circumstances added an additional consideration. The client was resident in the UAE, where a significant proportion of their business activity was conducted, while also maintaining substantial connections to the UK and Ireland. The application therefore required a lender comfortable with an international high-net-worth profile and a sizeable UK property facility.

The property itself also presented an important consideration. The Mayfair flat was undergoing a lease extension, with the existing 55-year lease being extended to 99 years. The cost of the extension was expected to be approximately £500,000, meaning the lender needed to take the ongoing lease arrangements and associated expenditure into consideration when assessing the application.

Given the size of the proposed borrowing and the property-specific considerations, a lender with experience of high-value transactions and a flexible approach was required. Enness’s London team approached a British private bank with which it had an established relationship and presented the client’s wider circumstances alongside the underlying property.

The lender was prepared to consider the transaction and provide the required level of capital despite the complexities surrounding the property and the client’s international profile.

The resulting facility provided approximately £4.5 million of borrowing against the £7.2 million Mayfair property. The mortgage was arranged at a rate of 3.25% above Bank of England Base Rate at the time.

The case demonstrates how large mortgage requirements can require a bespoke approach, particularly where a high-value property is subject to a lease extension and the borrower has an international financial profile. Access to private banks and specialist lenders can be particularly valuable when a transaction falls outside conventional lending criteria.

For high-net-worth clients looking to raise capital against luxury property, the appropriate financing structure will depend on the property, existing commitments, borrower profile and individual lender 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, property suitability, valuation, lease terms 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. Where borrowing is secured against a leasehold property, the remaining lease term and any lease extension requirements may affect the property's value and financeability. International borrowers may also be exposed to currency and cross-border considerations.