Foreign private banks fuel HNW demand for UK mortgage lending
Foreign private banks are providing an increasing number of mortgage loans to high net worth individuals in the UK, especially in the buy-to-let market, according to wealth manager and investment/mortgage planner HFM Columbus.
HFM said foreign banks are filling the gap left by local mortgage providers as they cut back on all lending following the onset of the credit crunch.
EFG Bank, Handlesbanken, and Bank Leumi have been among the most active in the local buy-to-let mortgage market, said HFM.
German-owned private bank Kleinwort Benson has also been among the big lenders in the sector.
“A recent example is Handelsbanken, which has just agreed to offer a client up to £2,000,000 at 1.4% 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,” said Gary Festa, a mortgage specialist at HFM.
“Another client, rejected by UK lenders, has struck gold with Kleinwort Benson on a £1.7m deal at 1.15% over the 1 week Libor rate (currently 5.1%). Monthly repayments on this loan work out at £8,854,” he added.
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