I recently helped arrange a high value consolidation loan for two clients. This involved shifting their high value mortgage from one bank to another, after their former lender objected to some major alterations they made to the property.
My clients in this case were a husband and wife who owned adjacent flats in South Kensington. He was the CFO of a hedge fund, and his salary was paid in dollars. They had bought the two flats with a view to knocking down the dividing wall to make one large property. They had received planning permission from the council, and duly gone ahead with the building work. The new, combined property was valued at £10m.
One of the flats was in her name and one in his. Each property had a loan taken out against it; again, one in each name. The loans came to a total of £4.5m.
Although they had granted permission, the council had not completed the paperwork to legally combine the titles of the two original properties, and had so much on their plate that it was not going to happen any time soon.
This left my clients in an awkward position with the bank through whom they had both arranged their initial loans. This lender was not completely comfortable with the new situation, which they felt was a security risk for them; after all, they had lent against properties which technically no longer existed.
We needed to find a private bank who would take security on two different titles, as combining them at this point would have incurred towering stamp duty costs which my clients were understandably keen to avoid. This was of course a tall ask; no lender would ordinarily do this because of the extra legal work needed.
I contacted a bank I had dealt with many times before, and with whom I had a very good relationship.
In this case, the lender was prepared to go above and beyond for my clients, and was happy to take security on the two separate titles. They issued the £4.5m high value consolidation loan my clients needed, and they are now happily settling in to their new home.