Navigating the process of finding the right million plus mortgage to suit your circumstances can be incredibly challenging. According to research by the consumer bible Which? there are more than 850 £1m+ residential purchase mortgages currently being advertised by UK banks and building societies. That’s before you even consider the number of mortgages which are not publicised, such as those we often arrange through private banks or specialist lenders.
If you’re looking for a mortgage of £1m or more, many would assume that lenders would be falling over themselves to work with you. However, a recent survey of 500 UK-based high net worth individuals found that more than 1 in 10 (12%) have been turned down for a mortgage in the past decade.[i] Why is this the case? In our experience it’s usually because the higher the net worth of an individual, the more complex their financial situation, and therefore they need to work with a broker with a detailed understanding of the market. Only a team with this specialist expertise can professionally present client cases to decision makers.
The clients we work with, particularly those looking to buy in the prime London market, are often foreign nationals or based overseas. According to Hamptons International, a home costing a dollar buyer £2m in the peak of the market in early 2014 now effectively costs 33% less due to both sterling’s depreciation and falling house prices in prime central London (PCL).[ii] Therefore, PCL property presents very good value for many.
Many of our clients feel that, if you’re looking to invest long term in London’s property market, there’s never been a better time. Brexit has caused short-term instability, but the capital holds an enduring cultural and economic draw. If you have an eye for a bargain, it’s likely you will be in an advantageous negotiating position, as the market for homes worth £2m or more declined 18% in the year to April 2019.[iii]
Investors certainly seem to think Central London remains a good bet; property has seen a 55% increase in demand from family offices, real estate funds and large investors looking to bulk-buy residential apartments in the second half of 2019, according to London property buying agency Ludgrove.[iv]
Our clients come from a huge range of backgrounds, and the feedback we hear time and time again is that we’ve been able to find a solution where others can’t. In fact, 79% of high net worth individuals questioned feel that lenders rely too heavily on “tick-box methods” that fail to appreciate their unique personal circumstances. This is exactly the approach we seek to challenge, as we take a detailed and individual look at each circumstance and shape a lending solution to fit.
Some of the circumstances we see daily include:
- Complex or irregular income streams, such as bonus payments, dividends or vested shares. This often requires a flexible approach where the lender takes a view on future earnings or builds a bespoke repayment plan allowing lump sums to be paid off at an agreed timescale.
- Expat buyers or British nationals living overseas who can often find it difficult to secure lending due to administrational elements, unless they work with a team with experience in navigating these processes.
- Later life lenders – as we all continue to enjoy longer lives, that means more of us are borrowing post-65. Options in this market were almost unheard of several years ago, but there are now several specialist providers with a range of suitable products, as well as private banks who can build a bespoke solution, with little regard for age.
- Foreign currency earnings will affect the mortgaging options available to you, but we work with several providers in this space.
- Buy to let mortgages form a significant part of our client base, both with individual and portfolio landlords often requiring specialist advice to find a solution which best fits their needs.
- Development, bridging and commercial finance is a challenging area if you don’t work with the right broker and economic instability has only exacerbated the difficulties. Our dedicated Commercial Department is part of the National Association of Commercial Finance Brokers and lives and breathes this part of the market, meaning they can provide up-to-date feedback and knowledge on the financing solutions available.
- Purchasing a property through an alternative structure or special purpose vehicle (SPV) requires a specialist broker such as Large Mortgage Loans to navigate the process.
If you’re looking for a million plus mortgage, you need to be sure your broker has scoured the market to find a solution which is tailored to your needs. Don’t hesitate to get in touch with our team to find out more.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
Changes in the exchange rate may increase the sterling equivalent of your debt.
The Financial Conduct Authority does not regulate some aspects of commercial finance, commercial mortgages and bridging finance.
A lifetime mortgage is a loan secured against your home. Think carefully before securing other debts against your home. Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits. Home reversion plans and lifetime mortgages are complex products. To understand the features and risks, ask for a personalised illustration. If you are in doubt, seek independent legal and financial advice.
[i] https://www.ftadviser.com/mortgages/2019/10/08/how-to-get-a-1m-mortgage/?page=3
[ii] https://www.ft.com/content/98d6acb0-d928-11e9-9c26-419d783e10e8
[iii] https://www.ft.com/content/98d6acb0-d928-11e9-9c26-419d783e10e8
[iv] https://www.propertyinvestortoday.co.uk/breaking-news/2019/10/bulk-buyers-flock-to-central-london-before-brexit
