How To Build Your Own Home
In the world of high finance, securing the means to build a bespoke luxury property in one of London’s most exclusive areas is no small feat. The challenges are magnified when the client's income, on paper, doesn’t reflect their actual wealth. Yet, this is precisely the kind of scenario where P10 Financial Group excels—navigating complex financial landscapes to turn ambitious dreams into reality.
The Vision: A Bespoke Mayfair Residence
Our client, a high-net-worth individual (HNWI) with significant assets, had a vision: to construct a £6.85 million family home in the heart of Mayfair. However, the path to realizing this vision was fraught with challenges, both financial and logistical.
Building a custom home in central London, especially within a Grade II listed building, involves more than just picking out luxury finishes. From navigating the intricacies of planning permission to assembling a seasoned professional team—including architects, project managers, and contractors—each decision can make or break the project. Moreover, ensuring that the construction process is financially viable is critical, particularly when the client’s income is structured in unconventional ways.
The Challenge: Complex Income and Lending Risks
Our client’s financial profile, typical of many HNWIs, didn’t fit neatly into the traditional lending models. Despite their substantial wealth, much of their income was being drawn from Director Loan accounts within their business, resulting in a tax return that understated their true financial standing.
Compounding this complexity was the nature of the property itself—a Grade II listed building requiring specialized construction work in an area where every detail is subject to rigorous regulatory scrutiny. Traditional mortgage products were unlikely to accommodate the client’s needs, and the financial solution had to be as bespoke as the home itself.
The Solution: A Tailored Drawdown Mortgage
P10 Financial Group devised a sophisticated financial strategy to meet the client’s needs. We structured a competitive drawdown mortgage facility, allowing the client to access funds as the construction progressed. This phased approach ensured that cash flow was aligned with the project’s timeline, reducing financial strain and mitigating risk.
The mortgage was designed to transition seamlessly once the build was completed. At that point, the facility would convert into a standard residential mortgage with highly favourable terms—a critical consideration for the long-term financial planning of the client.
The key results were as follows:
Property End Value: £6.850 million
Initial Mortgage Amount: £2.5 million (day 1 facility)
Interest Rate: 3% over sonia during construction
Final Mortgage Amount: £4.110 million (60% LTV of the end value)
Post-Completion Interest Rate: 1.95% over base rate once build works were finished
Mortgage Type: Interest-only
The Outcome: Turning Vision into Reality
With P10 Financial Group’s bespoke financial solution, our client was able to proceed with their ambitious project without the typical financial hurdles that can derail such endeavors. The drawdown facility provided the necessary funds throughout the construction phase, while the favorable terms of the post-completion mortgage ensured long-term affordability.
This case is a prime example of how P10 Financial Group leverages deep financial expertise and a network of specialized lenders to provide solutions that are tailored to the unique needs of HNWIs. For clients looking to build their dream home in London or elsewhere, our team offers not just financial support, but peace of mind—ensuring that their vision is realized with minimal stress and maximum efficiency.