What was the situation?
Our clients, a married couple in their mid-sixties approaching retirement, owned a country estate in Berkshire valued at £4,350,000 and set across 8 acres. The property included two ancillary dwellings, one used for short-term Airbnb letting and the other providing family and staff accommodation.
An existing £800,000 mortgage was in place, alongside a second charge facility, both of which required repayment as part of a wider restructure.
With retirement approaching, the clients wanted to clear all existing borrowing and gift £500,000 to their children, forming part of a coordinated inheritance tax strategy aligned to the seven-year gifting rule.
What was the issue?
The case required a lending solution assessed on age and property value rather than income. The acreage, secondary accommodation and short-term letting use narrowed the field of lenders able to consider the security on standard terms.
The title structure added further complexity. The main residence and the two additional properties were held across separate titles, with part of the estate on a leasehold basis. The presence of a septic tank introduced additional due diligence during valuation and legal review.
The existing first and second charge borrowing also needed to be redeemed in full on completion, requiring alignment across both lenders to deliver a clean exit.
What was the process?
Darren Johncock, Later Life Lending Director, focused on lenders whose criteria aligned with the property in its entirety, ensuring the case could be assessed on its full merits from day one.
Following a full review of the later life lending market, Darren narrowed the field to a lender comfortable with the acreage, secondary accommodation and short-term letting use, allowing the property to be presented in its true form rather than reshaped to fit standard policy.
Darren engaged directly with senior underwriting at an early stage, presenting the case in detail and ensuring underwriter confidence in the property and the structure ahead of formal application.
A £1,300,000 lifetime mortgage was structured at 30% LTV, aligned to the clients’ transition into retirement, allowing them to draw on the equity built up in a home they had owned for many years without altering their income or lifestyle.
During the legal process, the lender required the titles to be restructured to reflect the property layout. This was introduced late in the transaction and required immediate coordination between all parties, alongside additional reporting to satisfy the lender’s requirements, including matters relating to the septic tank.
Even with this introduced late in the legal process, the case progressed in line with the original timeline through careful management of the legal and underwriting workstreams.
What was the solution?
The £1,300,000 lifetime mortgage completed as structured, delivering a fully coordinated outcome aligned to the clients’ wider objectives.
£800,000 was used to redeem the existing first and second charge borrowing in full, clearing all secured debt against the property. The remaining £500,000 was gifted to the clients’ children on completion, allowing the inheritance tax planning strategy to begin immediately and the seven-year clock to start running.
Valuation and arrangement fees were waived by the lender, reflecting both the quality of the case and the level of early underwriting engagement, resulting in a cost saving of £1,600.
This case reflects the role later life lending can play at the centre of a wider wealth and estate planning strategy when led by an experienced adviser. By aligning lender selection, underwriting engagement and legal execution from the outset, the clients were able to achieve a clean exit from their existing borrowing and put their longer-term planning into effect in a single transaction.
How LDN Finance can help
Are you exploring the option of gifting money to your children by releasing equity? At LDN Finance we’re here to help you find a solution – no matter how complex your circumstances. Our expert brokers have extensive experience in providing creative solutions to secure large loans for our clients.
We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates.
Get in touch with us to organise an initial consultation.
