Experienced property developers approached us with an opportunity to purchase a three-story, semi-detached mansion block in Hampstead. The building comprised 5 self-contained flats, and the plan was to reconfigure the layout, merging two units to create a larger 4-bed duplex garden flat, resulting in 4 premium units.
The borrowers were foreign nationals with substantial international wealth but limited UK presence. They needed to exchange before the Christmas holidays, giving us just 3-4 weeks from application to completion. Speed was critical.
The location was excellent, next to Finchley Road and Hampstead Village, an extremely desirable neighbourhood in the London Borough of Camden. The property offered strong fundamentals: freehold tenure, proven rental and resale demand, and clear comparable evidence supporting the exit strategy, the sale of the flats.
Key Challenges and Solutions
Foreign national borrowers with limited UK footprint
The borrowers were based overseas, with most of their wealth held internationally. This can make UK lenders hesitant due to the lack of UK credit history, uncertain residency status, foreign income and the complexities of verifying foreign income. While the borrowers had a limited UK footprint, they did hold some domestic assets through Limited Companies. They had also delivered a very similar scheme in Belsize Park that completed on time and within budget, so we had sufficient comfort to proceed.
No personal guarantee
A personal guarantee was not available, increasing our risk. Rather than walking away, we structured an interest and cost overruns guarantee from the key individuals instead. With day one LTV at just 53% and LTGDV at 55%, the conservative gearing gave us the headroom to take this commercial view.
Pre-Christmas deadline
The application came in late November with a hard deadline to exchange before Christmas. Our panel of solicitors were swamped with the pre-holiday rush and could not meet the timeline. We went off-panel to a specialist firm that could deliver. Daily catch-ups between our sales and credit teams, combined with close coordination with our valuers and monitoring surveyors, kept everything on track.
The Outcome
We completed the £2.5m facility within the required timeframe, allowing the borrowers to exchange before Christmas. The deal includes a £526k construction facility for the refurbishment works, with the exit strategy being open market sales of the individual flats. Comparable evidence fully supports the projected GDV of £4.5m.
This deal was delivered by Jack Bruce, Relationship Manager, Ben Miller, Credit Analyst and Theo Goodman, Credit Manager.
