Transcript
Welcome to the transcript of our video, What is bespoke lending?. This page provides the full text version of the content, making it easy to read, reference, or search through specific topics covered in the video. Whether you prefer reading over watching, want to quickly scan for information, or need an accessible alternative to video, this transcript is here to help.
Introduction
So, what is bespoke lending? Well, being a private bank, how we differ from other lenders is that we have the flexibility to offer a personal service that can be completely tailored to your individual circumstances, not just how well you fit a prescribed set of criteria.
The benefits to you of this include both quick decision making and competitive pricing. I want to bring that to life a bit for you now. So, let’s take a look at a couple of case studies.
In the first one, we have Mark and Julia who wanted to buy a property they had been renting since relocating to the UK from LA. Mark is a US national, and Julia is a British national.
Case Study 1: Mark and Julia
Mark and Julia were paying 5,000 pounds per month in rental payments before their landlord decided to sell the property for 2.1 million pounds. They had the money to buy it, but it would’ve meant selling some investments, which they didn’t want to do, in the current climate. The sale of the investments wouldn’t have been a good idea from a tax perspective.
The couple had around 5.5 million pounds in investments with various US banks, which generated income annually that they could use as and when needed. However, they also received around 10,000 pounds per month in rental income from their previous home in LA, which had an estimated value of around 5 million pounds.
But due to their lack of regular UK income, traditional High Street banks were unable to help. However, we could take a more flexible view looking at all the surplus rental income after management fees and conversion to Sterling, and also the income generated by their investments.
After the couple provided various pieces of information to confirm the income and investments, we were comfortable offering a mortgage over a 10-year term, taking Mark to age 70 on an attractive five-year fixed rate.
Case Study 2: Business Sale and Buy to Let Strategy
In the second example I wanted to share, we have a client who sold his business in 2017 for 30 million pounds, and a majority of the privileges are held with us offshore. The client is a UK res/non-dom for tax purposes, and his onshore UK income is minimal.
To plan for his future and to generate more onshore UK income, he wanted to buy five high yielding buy-to-let properties in London on average, delivering gross rents of circa 10% per annum.
He wanted to use his main residence, valued at 8 million pounds to secure the 4.5 million needed to cover the purchase price, stamp duty, and refurbishment costs. The plan was to repay the loan by selling the properties, in 10 years’ time when his non-dom status may change.
We took a forward view on the buy-to-let properties and the anticipated rental yield to support the lending against his primary residence. To provide extra comfort, two years interest cover was placed in a block account with us. Once the properties were purchased and let the annual income reported and proven we agreed to release the charge cash.
Why These Examples Matter
So why have I shared these quick examples with you? Well, I think they really help bring to life how flexible we can be when looking at lending requests. How we really take the time to look at the client’s individual circumstances and how one size definitely doesn’t fit all.
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