I was approached by retired client who had previously been a partner in a law firm. My client was looking to borrow £1.24 million towards the purchase of an investment property in Highgate, valued at £3.1 million. The deposit came from his personal savings.
My client received pension income of around £32,000 per annum, and also owned two further investment properties worth £750,000 and £1.2 million with total borrowing of £600,000. These properties generated rental income of around £75,000 per annum. He also owned his main residence, worth £2.75 million, outright. Even though my client had arranged his previous mortgages himself, he wanted to benefit from expert advice due to the high borrowing requirement.
My client had been knocked back by several lenders due to the fact that he wished to borrow over £1 million but did not have a substantial personal income. Complicating matters further, the rental income from the property was not sufficient to satisfy most lenders’ requirements. This is often the case when approaching high street lenders with higher value requirements as they adhere to a ‘tick box’ criteria system and look very closely at affordability, not overall wealth.
In addition, my client wanted exclusive rights to the property which meant he had to move extremely quickly to secure the purchase.
I was able to agree the full £1.24 million loan requirement with a leading private bank. They were prepared to lend based on my client’s assets and personal profile at a fixed rate of 3.4 per cent for 5 years – even though the rental income did not ‘fit’ their standard calculation.
In addition, I was able to agree the borrowing in four days and the formal offer was produced in a little over a week. This helped my client secure the property, proving to the agent that he was in a strong financial position to proceed.