Wealth manager HFM Columbus says the door has been left wide open for the likes of Sweden’s Handles banken, Germany’s Kleinwort Benson, Israel’s Bank Leumi and Switzerland’s EFG Bank to hoover up BTL business over £1million.
Mortgage specialist Gary Festa says: “Our own lenders have effectively pulled the plug on this market altogether. But where do buyers go when they want to get their hands on the big money? Current market conditions have given rise to tremendous buying opportunities, and now we have a situation where foreign investment banks are swooping.”
“We are placing major deals on behalf of high net worth clients, but the big fees commission is going to overseas banks which appear to be less nervous than our own.
Festa adds: “A recent example is Handelsbanken, which has just agreed to offer a client up to £2,000,000 at 1.4 per cent above bank base, initially for three years when the rate would be reviewed. The bank is also prepared to offer an offset facility alongside this loan – but no UK lender wanted to touch anything above £1,000,000. It’s their loss,” he said.
“Another client, rejected by UK lenders, has struck gold with Kleinwort Benson on a £1.7m deal at 1.15 per cent over the 1 week Libor rate (currently 5.1 per cent). Monthly repayments on this loan work out at £8,854. The best we could find via traditional UK lenders is 1.6 per cent over Bank of England base rate – and it is just not competitive.”