Supporting a Joint Borrower/Sole Proprietor structure for a father and son
A wealth planner, private bank and investment manager all-in-one.
Our clients’ wishes
We were approached by one of our clients, a dual British/South African national residing in Dubai, who was looking to purchase a UK property for his son ahead of his studies (with a longer-term intention for his son to remain in the UK).
The target property was a lower ground floor flat in central London valued at £1,400,000, and the client required lending of approximately £980,000.
A key priority was to structure the facility as a Joint Borrower/Sole Proprietor mortgage, ensuring the property would be held solely in his son’s name to benefit from more favourable stamp duty treatment.
Our clients’ situation
Mr X, aged 50, is a successful business owner in Dubai. His income structure comprised a combination of salary and performance-related bonuses, alongside a substantial level of profits retained within the business to support ongoing growth and liquidity.
While this is a fairly typical structure for business owners in the region, it introduces additional complexity when presenting income for UK lending purposes. This was further compounded by the fact his earnings were received in multiple currencies, primarily US Dollars and UAE Dirhams, requiring careful consideration of consistency, sustainability and foreign exchange exposure.
Following a detailed review of his financial position, including income streams, business performance and retained profits, we were able to build a clear and well-supported picture of his overall affordability profile to lenders, demonstrating the strength and reliability of his overall income.
In addition, Mr X outlined a clear and credible strategy to make periodic ad-hoc capital reductions, utilising surplus income and retained profits. We were able to evidence that this approach was both realistic and sustainable, further strengthening the overall profile of the application and enhancing lender confidence.
To address these challenges, a broader and more strategic approach was taken.
Our clients’ outcome
We structured a 70% loan-to-value interest-only mortgage over a 10-year term. This provided a balanced solution aligned with Mr X’s broader financial planning and ensured the loan would be repaid well ahead of his anticipated retirement at age 65.
The interest-only structure complemented his income profile, offering flexibility and effective cash flow management while retaining the ability to make capital repayments as required.
A key part of the strategy was the planned reduction of the loan to 60% loan-to-value within the first two years, in line with Mr X’s intention to make ad-hoc bullet repayments. To support this, the facility was arranged on a two-year preferential variable rate, allowing these reductions to be made without incurring early repayment charges.
Mr X and his son were particularly impressed by our pragmatic and commercial approach to assessing complex, overseas income streams. They also valued the ability to structure a solution that could adapt alongside their business interests rather than being constrained by rigid criteria.
Overall, the outcome not only met the immediate objective but also established a strong foundation for a longer-term private banking relationship
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Email our credit specialists directly at [email protected] or call +44 (0)1624 645000 to speak to our client services team.
Any examples of investments and structures used are for illustrative purposes only. This case study does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.
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