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Market dries up for £1m-plus mortgages

Mortgages for more than £1m are becoming increasingly scarce as lenders look to curb volumes by restricting lending, says wealth manager HFM Columbus.

Director Gary Festa says: “Assuming you can find a lender prepared to arrange a loan in excess of £1m – and we are talking about barely a handful – the fees become crippling, even for those with up to 50 per cent loan to value.

“Barclays, traditionally a major player in this high-net-worth mortgage arena, typically imposes a huge £5,000 arrangement fee for a £1m-plus mortgage and adds an extra £5,000 to every extra £1m borrowed. In addition, it increases its rates over the first £1m and again for every additional one.”

Among lenders still offering loans over £1m are Intelligent Finance, which goes up to £5m, and Cheltenham & Gloucester and Royal Bank of Scotland, which have no cap on loan size subject to underwriting.

Nationwide’s cut-off point is £500,000 and Chelsea Building Society offers one product above £500,000 which is only open to buy-to-let customers.

HFM says it will increasingly be private banks that look to step into this end of the market.

Chadney Bulgin mortgage partner Jonathan Clark says: “There are still deals out there but lenders are taking less account of non-guaranteed income-like bonuses which many City workers rely on.”


Leading Edge – April 2017

There is little doubt 2017 will be a year of political uncertainty. Leading Edge is Royal London Asset Management’s regular review of investment markets. This edition explores some of the impacts that this uncertainty is having on investors, from the pitfalls of prediction within UK equity investing to the dangers of opting for convenience over […]


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