A foreign national investing in luxury in the capital
A broker reached out to us for help with a large refinance facility for a foreign national client against a high value luxurious single asset in Central London. The borrower had a bridging loan on the property which was near maturity and were in the process of completing refurbishment works.
The current lender was not prepared to provide an extension on their facility, so the borrower had to either:
- Sell the property in its current condition (incomplete)
- find a way to refinance the debt to give them more time to complete the works then sell the property
- or face the prospect of the property being re-possessed by the current lender
The borrower wanted to complete the works as soon as possible so funding was needed quickly, given an existing bridge facility was reaching maturity and they were about to instruct receivers. MFS were able to offer terms to refinance the property, however, we had a strict 3-week deadline to adhere to.
Calculating exit strategy viability
Our underwriter, Kieron Coote, got to work. The first potential hurdle popped up during the legal stage. A few issues were raised, but by working with the legal parties involved, we established there was nothing that concerned us.
We instructed the valuation and solicitors quickly. The valuation report confirmed how much the refurbishment was going to cost. While being a relatively high figure, we were given a clear schedule for when the works would complete from a builder, providing a clear endgame which gave us comfort in the proposed exit strategy.
Our expertise can help foreign investors returning to the UK
With large transactions, we understand the pressure is on to make sure things run smoothly. As the potential costs are so high, refurbishment or legal delays are the last thing investors need.
Fortunately, here at MFS we have experience in working with multiple different teams and experts in the property world. Where complications arise, which is likely with foreign nationals, we’re adept at resolving them as quickly as possible.
This expertise will likely prove crucial over the coming months and years. Following a few years of decline, international purchases of London property increased slightly in 2021, according to research from Henry Dannell.
As foreign buyers set their sights on UK property, you should get up to speed on how our overseas bridging loans can help those based abroad. If you’re tempted to utilise a large property for it’s renting potential, make sure you’re aware of what regulations you’ll need to follow.