Being able to release some of the capital tied up in your high-value property offers lots of benefits. This is especially the case in the current climate while the base rate is at a historic low. Whether you want to release funds to invest elsewhere or to make improvements on your existing property, this is a good time to release equity and significantly increase your returns.
Why release equity from your property?
Make an investment
As a high net worth individual, you have the opportunity to raise capital from your property and make further investments. Using the funds to purchase another property in Pimlico, for example, provides you with another asset. It also lets you benefit from a more competitive mortgage deal, particularly if you opt for an interest-only mortgage.
Investing your released equity in a buy-to-let property gives you a high-performing investment. As property prices have risen and lending criteria have become stricter since the start of the coronavirus pandemic, many potential buyers have been unable to make the switch from renting to owning their own homes. This means there is an increased demand for rental properties and, currently, the rental yields you can achieve are high.
You may prefer to use the released equity to expand your business. For example, investing the funds in new premises or equipment, increasing your workforce, expanding into a new market or increasing your range of products or services.
Carry out renovations
Another reason to release equity from your high-value property is to carry out works that improve it and significantly increase its value. If the property is your home, it saves the need to move to a new one, especially as property prices are so high. You can redesign it to have the home of your dreams and, by reinvesting your capital in the property, you benefit from an immediate increase in its value. You can also take advantage of remortgaging at a later date from this increased amount. Alternatively, you can renovate the property to considerably boost its value and then sell it for profit.
The criteria to release equity from your high-value property
To raise capital from your property, you need to satisfy the lender’s criteria. High street lenders are well-equipped to handle equity release and offer competitive rates. However, they tend to have defined procedures, which they are unlikely to compromise on. This isn’t an issue if you have straightforward circumstances. As a high net worth individual, however, you’re likely to have a complex income structure and require a more flexible approach for the lending criteria.
Specialist lenders and private banks can help you with this. They are willing to look at varied income streams and can include your assets in their calculations for affordability. These lenders are used to dealing with foreign currencies, assets held overseas and complex income structures, offering a tailored service. Some private banks prefer to form a long-term relationship with you and may ask to hold some of your assets under management. Your mortgage specialist in London, Kent or Edinburgh can find the right lender to suit your equity release needs, including those requiring an introduction.
Get professional guidance when releasing equity from your high-value property
Speak with a specialist mortgage broker to discover how releasing equity from your property can be beneficial for you and the potential gains you can expect when utilising this capital. Your Pimlico mortgage expert will be used to thinking creatively as far as your unique income structure as a high net worth individual is concerned. This will result in a bespoke solution for your equity release needs, sourcing the best lender and deal to meet your requirements.