Although Brexit has caused widespread uncertainty in the property market, the weak pound and a readjustment of house prices has made some areas – specifically the UK’s iconic capital city – more attractive to overseas buyers.
A recent case saw us work with a familiar profile of a client who wished to buy a pied-à-terre in London. An ultra high net worth foreign national, they had assets and companies spread across a number of jurisdictions and were based overseas, receiving income in multiple different currencies. They had decided to buy a London pied-à-terre and had placed a large deposit on a property and committed to significant development plans.
Where our client’s needs differed from most was that they wanted to borrow up to 60% of the property’s current market value rather than the initial purchase price. They were confident that the work being undertaken would have a significant effect on the property’s price and therefore wanted their mortgage to reflect this. The client also wanted the majority of the loan to be interest only on a variable rate, with the flexibility to fix the rate at a later date, given the uncertainty in the economy and the looming prospect of the Bank of England lowering interest rates.
Our team sourced a lender who agreed to look at the current value of the property and lend 60% on an £6.5m property valuation. Of that 60%, 50% of the loan would be interest only for the full term of the loan, 10% is repayment. The whole loan was offered on a variable interest rate, with the ability to switch to a fixed rate at the client’s request.
Your home or property may be repossessed if you do not keep up repayments on your mortgages.
Changes in the exchange rate may increase the sterling equivalent of your debt.