80% LTV for UHNW client on £7.3 million London property

80% LTV purchase for UHNW Hong Kong national on £7.3 million central London property

Article by Andrew Chalton Private Client Director

What was the situation?

I was recently approached by an ultra-high net worth (UHNW) Hong Kong national with businesses in the Far East, who was looking to purchase a stunning £7.3 million property in Belgravia. My client was keen to establish a foothold in London as a safe haven for investment and set up a UK family home outside of Hong Kong in the wake of increasing tensions and unrest within the region.

What was the issue?

This was a complex case to say the least and there were a number of issues to overcome in order to get this deal across the line, including:

Foreign currency income

Overseas income can be tricky to navigate at the best of times, but what was most difficult in my client’s case was that all of his business was based in the Far East – a region which typically enforces strict capital controls that prevent people from moving large sums of money out of the area.

High LTV requirement

Typically, a private bank would normally only lend 60-65% loan to value (LTV) on a deal this size – which in normal circumstances would have been absolutely fine as my client had more than enough personal liquidity – but as a result of the restrictive credit controls, my client needed to borrow a rather punchy 80% LTV on day one in order to secure the high value property.

No assets under management (AUM)

My client was also keen to secure the mortgage on a dry lending basis, meaning he would not have to place any assets with the lender. He had previously contacted another bank based in Singapore who was not only unable to reach the 80% LTV my client needed but also wanted him to place £2 million worth of AUM.

What was the process?

In essence, this case relied on my close working relationships with a number of trusted private banks. In order to meet my client’s requirements, I needed to work with a lender who could take a view on his vast wealth profile, albeit overseas, and provide a bespoke solution in order to move the deal along at speed. As such, I took the time to fully understand my client’s position as an UHNW individual and fully detail his income and assets in order to present his case in the best possible light.

Leaning upon my contacts, I was able to engage a private bank that was happy to lend 80% LTV on a dry lending basis in order to get the deal done straight away, on the understanding that my client would then pay down the loan to 60% LTV within five years.

What was the solution?

In order to get the loan to work at the higher LTV, I negotiated with the lender to structure the mortgage in two parts, with one part configured over 15 years, and the other over five years with annual bullet payments.

The total borrowing of £5.84 million was secured at a fantastic variable rate of 2.19% and the mortgage repayments were split as follows:

  1. £1.46 million across the first five years with an annual bullet repayment of £292,000 on the anniversary each year bringing the overall facility down to 60% LTV
  2. £4.38 million on an interest only basis to be repaid at the end of a 15-year term

My client was extremely happy as this facility allowed him to establish a foothold in the UK despite the post-COVID climate and international hostilities with the US, China and Hong Kong. He was thrilled to have secured the higher LTV borrowing on day one, reducing the amount of upfront capital he needed to bring onshore, as well as retaining further liquidity given he didn’t need to part ways with any extra funds for AUM.

Lending solutions with LDN Finance

At LDN Finance, our expert brokers have a wealth of experience in securing high value mortgages for UHNW foreign nationals. We work closely with our trusted network of mainstream banks, private banks and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates and ensure you feel in control at every stage of the process. Get in touch with us today to organise an initial consultation.

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