Helping clients secure their dream retirement home in Spain
A wealth planner, private bank and investment manager all-in-one.
Our clients’ wishes
Through one of our trusted broker partners, we were introduced to clients looking to unlock the value in their mortgage-free UK home to purchase a property in Spain. While retiring to the Spanish sunshine had long been part of their plans, an opportunity arose to acquire their dream home in their preferred location much sooner than expected.
To make this ambition a reality, they required financing of £1.3 million and a lender able to take a full view of their circumstances.
Our clients’ situation
The clients had previously sold their business through an Employee Ownership Trust (EOT). Under the terms of their director service agreement, they remained directors of the company and received a modest salary. This is common within EOT-owned businesses, where cash flow is often prioritised towards repaying the acquisition debt created by the transaction.
In addition to their salary, the clients had access to a substantial director’s loan account from which they could draw funds as required. Following a detailed review of the company’s financial performance, we were satisfied that these drawings were sustainable and could be considered as part of the overall affordability assessment.
The director service agreement also included a significant increase in remuneration from 2027, with their combined income expected to exceed £200,000 per annum. However, based on their current salary and rental income from commercial properties holdings, affordability remained constrained in the short term, creating challenges when assessing the proposed borrowing.
Both the clients and the introducer were delighted with the speed and flexibility of the process, enabling the clients to complete the purchase of their dream property in Spain within the required timeframe.
Our clients’ outcome
To overcome this, we structured a bespoke lending solution incorporating both repayment and interest-only elements. The clients intended to sell their UK property and relocate permanently to Spain upon retirement, so the facility was designed to reduce the outstanding balance to approximately 50% loan-to-value by the end of the term.
As an additional mitigant, we requested a cash deposit equivalent to one year’s interest payments. This would be held until evidence was provided confirming that the clients’ remuneration had increased in line with their director service agreement. Once this uplift in income was evidenced, affordability comfortably supported both the proposed borrowing and their ongoing lifestyle expenditure, allowing the deposit to be released.
The clients were pleased with the proposed structure, and we progressed quickly with the application. The case was approved promptly, with onboarding and valuation progressing smoothly. Both the clients and the introducer were delighted with the speed and flexibility of the process, enabling the clients to complete the purchase of their dream property in Spain within the required timeframe.
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Clients of Nedbank Private Wealth can get in touch with their Wealth Adviser directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.
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We have helped countless high-net-worth clients with their financial needs – some straightforward, some complex. Our bespoke approach, where we really get to know our clients, allows us to offer solutions that other wealth planners and private banks aren’t able to.
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