High street banks are boldly stepping into the £1m to £10m mortgage arena
The mortgage market has recently undergone a major transformation. Retail banks are now stepping up to challenge private banking institutions head-on, breaking the traditional mould where mortgages ranging from £1m to £10m were exclusively handled by private banks. This bold move by high street banks has injected excitement into the financial sector.
Historically, private banks dominated the large loan space, catering to high-net-worth (HNW) clients with a personalised approach, while retail banks served the masses. However, winds of change are sweeping in, bringing a fresh perspective to what retail banks can offer and challenging the status quo.
Kem Kemal, Co-Founder and CEO of Henry Dannell, comments:
“As high street banks welcome more HNW clients, we are entering a new era of lending, where high street banks are directly competing with private banks. This marks an exciting period in the market, with increased competitiveness among banks, which will offer substantial benefits to borrowers.
We’ve collaborated with lenders to develop lending pilot schemes tailored to HNW clients, providing a clear indication of their strong interest in pursuing these client types.”
So, what’s driving this seismic shift?
Contrary to common belief, high street banks certainly have an appetite for larger mortgage loans. The main challenge they encounter is ensuring they have a solid grasp of clients’ income to make a strong case for lending. This often makes all the difference when securing an offer with a high street or private lender.
Courtney Flockhart, Specialist Credit Adviser at Henry Dannell, comments:
“Many retail banks have now adopted a holistic approach to underwriting large mortgage applications. Instead of relying on a simplistic tick-box mentality to determine financial eligibility, they delve deep into individual circumstances and broader financial scenarios to assess lending capacity.
We closely collaborate with lending underwriting teams to effectively present the intricacies of applicants’ income and commitments in a format that is both simplified and detailed, ultimately aiding in a positive underwriting outcome.”
In London, we’ve carved out a niche as the go-to high-net-worth mortgage advisory boutique. Our focus is on providing guidance to clients from family offices, trust companies, wealth managers, tax advisors, accountants, solicitors, and super-prime agents, both in London and across the UK.
We have developed trust in this new model and have become known in the market for our expertise in helping high-net-worth individuals with their mortgage needs.
What does this shift mean for potential borrowers?
First and foremost, borrowers now have more choices. HNW individuals are no longer confined to private banking. The retail sector, with its extensive infrastructure, user-friendly interfaces, and digital innovations, offers a contrasting yet equally robust platform for managing large lending needs, often at a lower cost to the borrower.
This change reflects a significant shift in how retail banks view HNW individuals, recognising that assets play a crucial role in a borrower’s capacity, and their assessment should extend beyond just income.
For potential borrowers, this represents a golden opportunity with numerous choices and vast opportunities, especially after the recent turmoil in the interest rate markets.
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.