UK High Street Banks Move Into Large-Scale Mortgages

There was good news this week for anyone seeking a high-value mortgage, with the news that Great Britain’s high-street banks are now increasingly offering larger home loans. Previously only private banks have offered mortgages for £750,000 or more, but in the past year or so mortgage brokers are placing a growing number of million-plus loans with banks and building societies, according to a report in the Financial Times. One of the reasons for the move to UK high-street banks is that those private banks based in Europe have become less competitive on pricing because they are more highly exposed to the eurozone crisis. British banks have had several years now to recapitalise, while for many of the European banks, the situation has only got worse. As one example, this week Yorkshire Building Society’s broker lending arm Accord Mortgages increased its maximum loan amount from £1.5 million to £3 million. The mortgages are on a two-year tracker rate of the Bank of England (BoE) base rate plus 1.59 per cent available on a loan-to-value (LTV) of up to 75 per cent loan-to-value with a £3,990 fee. Other high-street banks and building societies offering similarly good value deals are ING Direct, Nationwide, NatWest, Skipton Building Society, Woolwich, Clydesdale Bank and Santander. Simon Gammon of Knight Frank Finance told the FT that “there’s a lot more choice in the market for those looking to borrow between £750,000 to £2 million”.”These high-street names are pricing extremely well but their underwriting procedures are not geared up to the type of client they are going to get,” he added. Benefits of using high-street lenders include being able to keep banking arrangements and key assets in place, rather than transferring them to a private bank, whereas the drawbacks include what Mr Gammon called the requirement to be “squeaky clean” in order to qualify.

Published on 2 March 2020

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