I’m wealthy – so why can’t I get a loan?

This month, Tim Miles-Marsh talks about the problems high net worth (HNW) individuals and entrepreneurs face when seeking competitive loans on the high street and how to find the solution.

What are the best mortgage deals at the moment?

There’s a rate war going on. As I write, there are 50 mortgages under 1% on offer in Britain. 5 times as many as there were in June. In April, there were none. Great news for those with access to instant large cash deposits.

Now in the last half of the financial year, lenders are under pressure to increase their market share. Lockdown allowed increased saving for many, and as lenders are sitting on more cash than usual, they’re appealing to those potential customers with headline grabbing deals.

Who are their ideal customers? Borrowers with clean credit records, good loan to income ratios, and a 40% deposit, which equates to low-risk lending.

Specialist mortgage lending for entrepreneurs and HNWIs

But what if you thrive on risk like the vast number of entrepreneurs who have no monthly pay cheque to satisfy a “tick-box” spreadsheet? Or you’re a high net worth (HNW) borrower with complex finances?

Many affluent borrowers have significant assets, but not access to the instant liquidity with which to place a deposit. Their wealth could be held inside trusts, spread across various countries, or tied up in stocks and shares. Lenders have been risk-averse since the 2008 crash, heightened by regulatory mortgage changes and high street banks are far more cautious in lending to these types of consumers today.

Equally, entrepreneurs who are used to long gestation profit periods will find that they are too high-risk for high-street banks. Lenders want security – a trailblazing pioneer with no income for 3 years won’t fit this profile and the effects of the pandemic have exacerbated this.

Private banks who understand the complexities of wealthy clients

Private banks can have more flexibility for high-net-worth clients, which is permitted by the Financial Conduct Authority. They can be very skilled at assessing a unique borrower’s profile, motives, and potential, and have an in-depth knowledge of this type of client.

Ashbridge Partners are well known to many private banks. We’ve dedicated the last decade to building a wide network of contacts in the private banking industry. The contacts we work with understand the unique challenges that such clients face, particularly at the top end of the property market. They also know our reputation, and can go straight to reviewing an application submitted through us.

This is where expertise and credibility are essential elements to securing a deal. We’ve seen countless variations of this theme and can foresee the lenders’ concerns before they arise. Every client is unique, but because of the experience we’ve accrued, we know the many similarities they share. This can save everyone a lot of precious time. We ask borrowers the right questions so that a robust application answers a lender’s concerns from the get-go.

Client example

Entrepreneur Realises His Ambitions in the Country

An entrepreneurial client of ours, shares how we were able to present his application and help him meet his goals:

My work is fairly unique in Britain, as I develop renewable projects. Income tends to be lumpy with a 4-5 year gestation period before a project comes to fruition. There was nothing available for me on the high street before I came to Ashbridge. Tim, however, was able to source funding through his specialist contacts. I was able to buy a much bigger house, and am now enjoying living in a substantial family home in the country. I would highly recommend him, especially if you’re an entrepreneur with a strong track record.

If the points raised here sound familiar for your own needs or that of your clients and your wealth is more complex than high street banks can cater to, I’d be delighted to talk further. I relish a challenge. Professionally speaking, there are few things I find more rewarding than taking a complex case, securing the right mortgage, and seeing a client move into the property of their dreams. I also keep in touch with clients, reviewing mortgage rates with them as their ambitions evolve.

An expertly crafted application detailing assets, motives and plans could open doors to lenders who understand the complexities of high-net-worth borrowers. The last half of the financial year is an opportune time to talk. I’m ready to listen, and I’m waiting for your call.

Contact Us:

Want to know more? Tim welcomes you to get in touch so he can support your ambitions:

Tim Miles–Marsh (Residential Mortgages) tim@ashbridgepartners.co.uk
01451 830223 / 07818 848688