Case study: Capital raise against a second home

The borrower

Since selling their business, the client has continued to be active in the technology sector through a combination of employment, consultancy and investment. The client has a complex income from a number of different sources including a salaried role, self-employed consulting contracts, multiple non-exec directorships and rental income from a property abroad. They are asset rich, but have a challenging income profile in comparison to overall debt.

The problem

The client wanted to raise capital against a second home on the south coast valued at £5million, to replenish liquidity that had been used to develop the adjacent property and take advantage of potential investment opportunities in the tech sector in the future. The client’s goal was to put the money to work rather than leave the equity dormant in the property.

The solution

The challenge required Investec to take considerable time to understand the client’s overall income and wealth position as well as future potential. In order to meet affordability requirements, we looked at the client’s various income streams as well as existing liquidity. The client also had options at his disposal whereby he could generate additional income or sell assets to create a liquidity event. We provided a £2million loan, on an interest only basis on a five-year fixed term.

Important information

Your property may be repossessed if you do not keep up repayments on your mortgage. Investec residential mortgages are only available for residential properties in England or Wales and are primarily available to UK residents and subject to eligibility.