Financing a Second Home Purchase in London for a HNW Individual
Featured Snippet: Articus Finance successfully arranged financing a second home purchase in London for a HNW individual, securing a £1.4m loan at 70% LTV while tailoring terms to complex bonus-based income and minimising monthly payments.
Introduction
Securing financing a second home purchase in London for a HNW individual demands specialist structuring, particularly when bonus-driven income forms the majority of earnings. For professionals seeking to manage liquidity while establishing a base in London, retail mortgage lenders often fall short. This case study demonstrates how Articus Finance leveraged private banking relationships to overcome bonus income challenges and deliver favourable terms.
Client Background
Our client was a UK national, resident in the South West of England, where they owned a mortgage-free £3.2m property near Salisbury. As a senior director at a prestigious London-based company, a lengthy daily commute had become increasingly impractical. Their priorities included:
- Acquiring a London property worth £2m as a second residence.
- Minimising cash contribution by releasing equity from their primary residence for the down payment.
- Securing a loan structured around income heavily weighted toward annual banking bonuses—over three times base salary.
- Keeping monthly mortgage commitments as low as possible.
Whereas some banks treat substantial variable bonuses as unreliable for lending coverage, this client required a broker able to interpret bonus income positively and align it with lender risk frameworks.
The Challenge – Financing a Second Home Purchase in London for a HNW Individual
Completing financing a second home purchase in London for a HNW individual presented multiple industry-specific challenges:
- Bonus-heavy income: Many lenders discount a significant portion of variable compensation when assessing affordability.
- Liquidity preference: The client aimed to avoid deploying liquid assets, instead leveraging property equity for the acquisition.
- Second home requirements: Structuring the loan to balance interest-only exposure and long-term affordability, ensuring flexibility remained intact.
- High-value lending: At £1.4m loan requirement, the facility sat outside typical high street appetite, necessitating bespoke underwriting.
Without tailored advocacy, restrictive interpretations of bonus income could have resulted in reduced borrowing power, unfavourable loan-to-value ratios, or higher-than-necessary repayment terms.
Our Solution
Articus Finance capitalised on its long-established links with UK private banks experienced in lending to high-net-worth professionals. Our strategic approach included:
- Engaging a private lender known for evaluating total compensation packages holistically rather than penalising bonus income.
- Structuring £1.4m financing on a 70% LTV basis, aligned with the £2m purchase price.
- Securing interest-only repayment terms, reducing monthly outgoings to match the client’s affordability goals.
- Negotiating a competitive interest rate reflective of the client’s strong net worth and low leverage on primary residence.
This combination allowed the client not only to avoid large upfront capital injections but also to transition seamlessly into London homeownership, minimising disruption to their overall financial planning.
Key Highlights
- Property Value: £2m London residence.
- Loan Secured: £1.4m facility at 70% Loan-to-Value.
- Client Profile: High-net-worth UK national, banking director with annual bonus triple base salary.
- Funding Source: Equity released from mortgage-free £3.2m Salisbury home.
- Solution: Interest-only structure ensuring competitive payments and liquidity protection.
- Outcome: Acquisition completed without cash strain, preserving wealth strategy and lifestyle goals.
Why Articus Finance Delivered
Arranging financing a second home purchase in London for a HNW individual depended on targeted private bank access and financial structuring expertise. Articus Finance’s independence from retail constraints, coupled with extensive knowledge of complex income profiles, positioned the client favourably with lenders. By demonstrating sustained income capacity and leveraging property equity efficiently, Articus secured approval that a conventional broker would not have achieved.
Explore Related Insights
- High Net Worth Mortgage Case Study
- Private Bank Mortgage Solution
- Large Portfolio Refinance for British Resident
- Buy-to-Let Remortgage for French National
- Foreign National Mortgage Solutions
- Expat Mortgage Case Study
- UK Property Refinance for Italian National in Switzerland
- Financial Conduct Authority – FCA
Final Thoughts
This case demonstrates that financing a second home purchase in London for a HNW individual becomes achievable with private bank expertise and bespoke structuring. Articus Finance enabled the client to access liquidity efficiently, maintain low monthly payments, and establish a London base while preserving financial independence.
