Sofia and I are Portuguese from Lisbon. We graduated from university and found good jobs at an international company. We had been planning to move to the UK for several years — there are more opportunities for career growth here, as well as better living and leisure conditions. When we found out that Sofia was expecting a baby, we realised that it was time to take action.
Miguel and Sofia are amazing people. They are open, friendly and strive for complete professional and personal fulfilment. We met them a few years ago when they had just moved to the UK. They asked us to help them obtain visas, as they had been offered promotions at their company and the job required them to be physically present in London. At the time, they did not think that the United Kingdom would one day become their home.
We fulfilled Miguel and Sofia’s request, wished them creative success, and moved on to other projects. But a few months later, they turned to us for help again. It turned out that they had performed very well at the company, proposing a number of promising and commercially viable projects to the management. Their implementation was planned to take several years, which practically ruled out the possibility of remote control and monitoring.
The company’s management supported the initiative but set a condition: the projects would be managed not by outsiders but by our clients. Miguel is an IT specialist who will handle the technical and software implementation. Sofia is an experienced marketer who knows how to accurately assess the state of the market and optimise the launch of new disruptive technologies.
At the time of contacting Imperial & Legal, our heroes had sufficient income to live in the UK, and they had funds deposited in a Portuguese bank from the sale of a spacious apartment in the centre of Lisbon. The task that the couple set us was challenging but interesting.
Miguel and Sofia’s case study task:
Client requests that require several consecutive actions are often more complex. Miguel and Sofia’s case is no exception. The first stage — international transfer — is a standard service that Imperial & Legal specialists perform for clients. Miguel and Sofia can document the legality of the source of the funds (sale of an apartment in Lisbon), so the risk of increased attention to the transaction from the financial monitoring service is minimal. But further actions were associated with several difficulties.
Potential problems:
When we first met, we explained to the clients that in the UK, foreigners have the same rights as citizens and residents of the country. Therefore, mortgage refusal is possible, but not because Miguel and Sofia are from Portugal. Typical reasons include insufficient income, poor or no credit history, and no official employment. We then analysed the potential risks and developed a set of recommendations for each of them.
The easiest part was choosing a neighbourhood. We recommended that Miguel and Sofia, who did not yet have children, live in different parts of London for 2-3 weeks. This would be enough time to assess the advantages and characteristics of each neighbourhood and understand how well it met the clients’ expectations. This approach was not quick, but it completely eliminated the element of uncertainty.
It was possible that the mortgage loan for the purchase of investment property would be denied. The fact that Miguel and Sofia could document sufficient financial solvency reduced the risks, although it did not eliminate them completely. We clarified how important it was for the clients to purchase two properties at once — one for living in and one for renting out.
They explained to our specialists that their earnings allowed them to save money. However, the yield on bank deposits in the UK ranges from 0% to 4.25%, with an average of just over 2%. The interest rate on a deposit loan varies from 2% to 4.5%. Renting accommodation in the UK in inner London (for a typical studio flat) costs between £1,000 and £1,800. We confirmed the accuracy of the calculations and agreed that the idea of buying a property in London with a mortgage and then renting it out is more profitable than a bank deposit.
We then explained to our clients that instead of a conventional mortgage, which they may be denied, it would be easier for them to apply for a Buy-to-Let loan:
Legally, the client’s request was as follows. Miguel and Sofia wanted to buy property in London with their own (rather than borrowed) money for their personal residence. They wanted to invest the remaining funds in an apartment that would be rented out. To compensate for the shortfall in funds, the clients planned to take out a bank loan.
We explained the terms and conditions of the Buy-to-Let mortgage programme to Miguel and Sofia in detail, and they decided that this option suited them. The main advantage of this scheme is that there are no minimum income requirements for mortgage payments. The bank’s only financial condition is that the client must have sufficient funds to cover their personal needs. The income from renting out a property purchased under the Buy-to-Let programme is used to repay the mortgage.
Once the key points of the assignment had been discussed, our specialists set about implementing the planned actions. As expected, we managed to avoid any particular problems, and the task was ultimately completed in full.
Miguel and Sofia checked out several areas of London and ultimately chose the one that suited them best — Richmond upon Thames. Property here is not the most affordable, but our specialists were able to find an interesting and relatively inexpensive option. The area is very convenient for living — it is calm, quiet, with a developed social infrastructure, clean air and an abundance of green spaces.
To generate passive income, we found a large and spacious flat near the underground, close to many points of interest — nightclubs, shopping centres, concert venues, cosy cafés, several high-end restaurants, and exhibition complexes. The property is in consistently high demand among visitors to London, so the balance between mortgage payments and rental income is very good.
It should be noted that by the time the legal formalities for the rental flat were completed, Miguel and Sofia had already decided on the area of London where they wanted to live, so we repeated steps 3-10, excluding only the point concerning the choice of mortgage programme.
After reviewing Miguel and Sofia’s assignment, we developed a detailed action plan and assigned a team of experienced specialists to the clients’ request. The case was complex and multi-stage, so we constantly monitored its progress, discussing new or changed circumstances with the clients.
As a result, Miguel and Sofia were able to quickly move into a comfortable and spacious flat in London. The passive rental income they received fully covered their mortgage payments and allowed them to set aside a certain amount each month for their family savings. We sincerely wish the couple success, happiness, health and financial prosperity!
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