Mayfair based bridging lender Market Financial Solutions has announced that it has closed a ‘standout’ bridging deal, issuing a £5.2 million loan for an offshore client.
A new broker approached MFS on behalf of a client who required funds urgently to clear an existing debt on a prime central London investment property. The property, which had a market value of £8.7 million, was listed for sale and, at the time of the enquiry, was garnering strong interest from potential buyers.
However, as the client resided offshore, they had experienced difficulties raising finance through traditional methods in order to clear their debt with an existing lender. Their current facility was close to being called in and only a very quick completion on the London property would enable them to avoid being penalised and charged for late repayment.
MFS instructed a valuer to complete a report on the investment within 24 hours. At the same time MFS solicitors were engaged to start the legal process and to ensure the transaction was conducted without delay.
The result was that MFS was able to issue a loan to the client of £5.2 million at a loan to value (LTV) of 60%. It was agreed that the exit was the sale of the security property, which was already attracting significant attention.
The case comes as figures from real estate firm Knight Frank published in September 2018 showed that in the year to May 2018, non-UK residents acquired 2,162 properties in London alone, which had a combined value of £2 billion, up from £1.65 billion in the preceding 12 months.
Meanwhile, separate data from Hamptons International published in January 2018 showed that more than half the prime central London real estate acquired in 2017 was purchased by foreign buyers.
According to Paresh Raja, MFS chief executive officer, international high net worth individuals are increasingly looking to bridging finance to overcome their frustrations when dealing with traditional lenders.
‘As a bridging loan provider that regularly works with international high net worth individuals and brokers who have such clients, MFS understands the unique challenges facing foreign investors within the UK property market,’ he said.
‘This recent case highlights this point. For foreign buyers, who are evidently still keen to pursue bricks and mortar opportunities in the UK, it is vital that brokers and lenders take a bespoke approach to delivering short term finance,’ he explained.
‘Due to the unique challenges they face and investment portfolios they hold, international high net worth individuals require a tailored approach when it comes to securing credit, and this is what sets bridging apart from mortgages,’ he added.
