Case snapshot
- Facility
- Portfolio refinance, three loans into one
- Loan amount
- £4,550,000
- Loan-to-value
- 65%
- Rate
- 6.46% blended, fixed for 5 years
- Term
- 10 years, interest only
- Outcome
- £79,000 a year saved in interest
The Challenges Of The Portfolio
The family portfolio was inherited from his late father in a complex family trust structure. Our client continues to manage and expand. The portfolio consists of residential, semi-commercial, and commercial assets. The portfolio was extremely well managed with strong occupancy rates across the board.
However, despite the portfolio’s strong track record, challenges were faced in securing more competitive loan terms due to the complexity of the ownership structure—particularly the use of two discretionary family trusts. While these trusts provided important estate planning benefits, it creates challenges for banks to lend into trust structures.
The next challenge to overcome was the fact that one of the largest asset operated as a serviced office. The challenge with serviced offices is that there is no traditional lease on the asset, it makes it very hard for banks to asses long term affordability.
The Refinancing Solution
After assessing the situation, we worked closely with our client to identify the best approach for refinancing his portfolio. The goal was to consolidate three existing loans, two of which were held by the family trusts and one in our clients personal name, into a single, more efficient loan structure. This would not only streamline his financing but also provide the opportunity to raise additional equity to fund future growth.
This deal was structured with personal pricing across the three different asset classes which allowed us to negotiate extremely competitive lending terms in a complex loan structure.
The final solution we secured was as follows:
The Deal:
Loan Amount: £4,550,000
Blended Interest Rate: 6.46% Fixed for 5 years
Leverage: 65% LTV
Structure: Full interest only
Term: 10 years
Asset Type: Semi-Commercial Portfolio (including residential, semi-commercial, and commercial properties)
Key Outcomes:
Reduced the clients lending margin from 8.2% down to 6.46%. This saved them £79,000 in interest each year and £395,850 over the term of the fixed rate.
£385,000 Equity Release which has allowed the client to look at acquiring other properties
10 year deal structured, which gives client peace of mind for 10 years, which is extremely valuable given the complexity of the portfolio.
Looking Ahead
This successful refinancing not only provided our client with the funds to continue growing his portfolio but also enhanced the overall efficiency of his financing. With a more streamlined loan structure and additional capital for future investments, they are now in a stronger position to take advantage of new opportunities in the property market, whilst saving a huge amount of money.
