Sale and debt recovery of duplex penthouse in Aldgate

We were recently appointed over the loan on a 12th/13th floor 3-bedroom duplex apartment in Aldgate on the City fringe. Despite being a relatively modern development, the building did not have an External Fire Review Certificate (EWS-1), now mandatory on all buildings over 18m high following the Grenfell Tower disaster. 

As a result, mainstream lenders would not provide funding. The only credible buyer, therefore, was a cash purchaser. 

As there was local high net worth buyer demand, we wanted to explore the private treaty market with auction as a backstop. We appointed a well-known national estate agent with a local office to advertise the apartment at a realistic level that would attract interest from a range of buyers, including occupiers and investors with cash funding.  

A suitable buyer came forward and terms were agreed, with a strict timetable for exchange and completion, and a sale was completed within 10 weeks. 

Although on paper the lender saw a loss, the principal loan debt and a large proportion of the interest was recovered from what had initially been an asset but had become a liability.