£4.8 Million Second Property Purchase in London for French National

• Client: French national resident in Dubai with an established connection to the UK
• Property: Grade II listed London property valued at approximately £4.8 million
• Challenge: Complex company accounts resulted in a net profit figure that did not fully reflect the client’s underlying revenue
• Finance: 65% LTV interest-only mortgage at 3.24% fixed for two years

International borrowers looking to purchase high-value property in London can face additional challenges where their income is generated overseas or their financial structure does not fit conventional affordability calculations. Enness was approached by a French national resident in Dubai who was looking to purchase a second home in London for their family.

The property was a Grade II listed residence valued at approximately £4.8 million. The client had previously lived and worked in London for many years before relocating to Dubai, while their partner remained resident in the UK. The property was intended to provide a family home for the client, their partner and children.

The main challenge related to the way the client’s business accounts presented their income. Although the underlying business generated significant revenue, the net profit figure shown in the company accounts was considerably lower. As lenders commonly use reported net profit when assessing affordability for self-employed borrowers, relying solely on the accounts would have restricted the amount the client could borrow.

Enness therefore considered an alternative way of demonstrating the client’s underlying income. Rather than relying exclusively on the net profit figure, the team provided the lender with an accountant’s reference outlining the client’s annual revenue over the preceding three years.

This provided the lender with additional context around the client’s financial position and demonstrated the consistency of the underlying business revenue. It allowed the lender to take a broader view of the client’s affordability rather than relying solely on the headline net profit figure.

The lender was also comfortable considering the client under a foreign currency and overseas-resident mortgage package, which was appropriate given their Dubai residency and income structure.

Following negotiations, Enness arranged a mortgage at 65% loan to value (LTV), with the facility structured on an interest-only basis. The rate was 3.24% fixed for two years at the time.

The resulting structure provided the client with the required finance for the £4.8 million London property while accommodating their international residency and more complex income profile.

The case demonstrates how foreign currency mortgage solutions can be relevant for international borrowers whose income is earned outside the UK. For self-employed applicants, the way income is evidenced can also have a significant influence on the amount a lender is prepared to offer.

For international clients seeking to purchase a high-value London property, large mortgage finance can provide access to lenders experienced in assessing overseas residency, foreign currency income and more complex financial structures, subject to individual circumstances and 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, valuation, property suitability and lender criteria. Terms, rates, LTVs, fees 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. Interest-only mortgages require a suitable strategy for repaying the capital at the end of the mortgage term. Where income or borrowing is denominated in different currencies, exchange-rate movements may affect affordability and repayment costs.