I recently secured a high value mortgage for a client who, though wealthy, had very little provable income.
My client in this instance was an Italian national who had recently moved to the UK. She was purchasing a property in South Kensington for £2.6m which she was going to use as her main residence, and she wanted to raise a loan of £1.4m.
The difficulty was that my client had very little by way of provable income. The regulator’s Mortgage Market Review of 2014 has made it harder for those with a complex income structure to secure mortgages. Rigorous checks, usually in the form of computer algorithms, can prove a real headache; borrowers whose situation is unusual can find themselves being turned down without any sort of discussion.
My client had some regular rental income from a property in France, and a little more coming in from a consultancy business based in the UK. Even combined, this was nowhere near enough to service the size of mortgage she was looking for. Although she had a significant investment portfolio with UBS in Italy, worth £5m, she wasn’t deriving any income from it.
She had been renting a property in London for around £10,000 a month, and had been looking to buy a main home here for some time. Other brokers, however, had told her that she was after the impossible; she was repeatedly told that she would not be able to raise a residential mortgage without withdrawing income from her investments as she would not pass lenders’ affordability checks.
We needed to find a bank who would treat the capital gains on the £5m investment portfolio she had with UBS as income, and agree to a loan on that basis. Most lenders want more security than this, but I had a lender in mind with whom I had a good relationship.
I spoke to a private bank who were willing to take the portfolio’s performance as security. They were happy to lend the full £1.4m, enabling my client to move into her new home.