We were recently asked to assist some clients from Russia who approached me having found a property in Westminster they wanted to buy as a second home to stay in when in London. The high value apartment they wished to purchase was valued at £6 million. They wanted to borrow as much as was possible against the property and thus needed a mortgage for non UK resident.
As the director of a vastly successful business in Russia, my client was personally wealthy. He wasn’t employed or affiliated with the Russian government, but the majority banks I spoke with regarded him as a PEP (Politically Exposed Person) due to the fact that he had been involved in parliament several years ago. This meant he was generally restricted from opening the bank account and mortgage he would require in order to make this purchase.
However, I managed to persuade one private bank who had a Russian department and they were able to put me in touch with a Russian speaking banker. I was able to persuade them to do a more comprehensive compliance check than tends to be the norm. Not only did they do the necessary in-house compliance checks but they also instructed a third party check, after which they were happy to take the clients on board.
They realised they would in fact be comfortable lending £3 million if the client was willing to place £3 million on deposit.
The proposed terms were finalised as a 2.3% + 3 month LIBOR and it was not necessary to put any assets under management in this particular case. Under these circumstances this rate is impressive, especially with a private bank.
The entirety of this process was not as fast as the majority of the cases that I settle as the complex nature of the client’s Russian nationality means that the bank has to be particularly vigilant from the compliance side. However, the fact that it’s been settled is a great success and the client was very happy as they had lost all hope of purchasing a property in the UK up until now.