Need a £5M+ UK Mortgage? What Borrowers Must Know

The UK mortgage market has matured significantly in recent years, especially when it comes to lending to overseas buyers and high-net-worth individuals (HNWIs). Whether you're buying a UK property as a non-resident or exploring sophisticated lending options, there are two main categories of UK mortgage finance available: private bank lending and specialist/building society lending.

• Private Bank Lending: Offers a tailored and flexible approach to UK mortgage lending. Their sophisticated underwriting processes allow them to work with clients from all diverse backgrounds (as long as everything is legally compliant). These lenders can lend up to 95% of property values and will require clients to open bank accounts with them to develop a broader banking relationship. 
• Specialist / Building Society Lending: More focused on UK Expats, these lenders can be flexible in their underwriting approach (especially for HNWI’s). A high loan to value (LTV) is achievable, and interest rates are competitive, with some lenders being as cheap as the UK High Street.  

What Role Does Asset Under Management (AUM) Play?

The UK mortgage market is sophisticated, and many banks will lend on a mortgage-only basis. There are several Private Banks that will require AUMs (or at least sight of AUMs) to consider onboarding and lending to a client. 

These banks can often work with more complicated clients who would maybe otherwise not meet standard lending criteria (Income Multiples / Affordability).

The bank may also look to cross-collateralise the AUMs, allowing for a more significant Day 1 Loan amount. 

What Is the Bridging Market Like?

Bridging has become more popular over the past couple of years in the UK mortgage space. As the bank process has become heavier and heavier; HNW and UHNW clients value the deliverability and ease of application that bridging offers them. This, alongside a higher base rate, has meant that bridging can often be used where a client needs to complete it quickly and with a low-touch application but with only marginally more expense than traditional private bank or specialist mortgage lending. 

There are many bridging lenders in the market today, and offerings vary from lender to lender, but the following is possible:

• LTVs up to 80% of the property value 
• Rates starting at 0.55% 
• Fast and straightforward application process
• Terms as long as 60 months

UK Mortgage Affordability: How Much Do You Need to Earn?

For UK residents, a high street/standard lender will lend anything up to 5-5.5x a borrower's income. However, their lending appetite/income multiples are a lot more limited when lending above £1m and/or the loan to value is higher than 70%/75%.

Private banks are often able to use a borrower's broader wealth in addition to a borrower's regular income to satisfy affordability, taking the view that borrowers could, for example, use their savings and investments towards servicing their monthly mortgage payments in addition to their regular income. This method can often allow private banks to provide borrowers with a higher lending amount than high street lenders' standard income multiples affordability assessment can. 

Purchasing vs Remortgaging in the UK Mortgage Market

Generally, there are more remortgage products that offer free legal and valuation fees over purchase products. Outside of this, the differences are limited.

Is Income Always Required for a UK Mortgage?

With high-street banks, regular income is almost always needed. However, private banks can often lend if a client doesn't have a regular income. For example, if a client doesn't have a regular income/career but has recently gotten divorced and been given a lump sum or regular maintenance agreement, this can be used to service the mortgage payments. Another example would be if a client has recently sold their business and received a large sum; a private bank could gain comfort that the client could use these funds or the interest from these funds to meet the mortgage payments and running costs for the property, plus maintain their lifestyle for the term of the mortgage.

How Are Buy-to-Let Mortgages Treated? 

With standard lenders, the affordability is typically based on the lender being comfortable that the rental income covers the mortgage payment, assuming an increased stressed interest rate for a 2-year product or stressed by the product rate for most 5-year fixed rate products, as there's no risk of the interest rate increasing for the full 5 years. 

Private banks and specialist lenders can often offer an affordability assessment called top slicing. This is taking the borrower's regular income or wider wealth into account to evidence the monthly mortgage payments can be met in addition to the client's personal expenditure, either if there are rental void periods or if there's a shortfall in the rental income. This can often allow for a higher borrowing amount than the standard lender's affordability assessment will offer.  

Why Work with Enness Global?

Enness Global are well-equipped to navigate the complexities of the UK mortgage market, especially for high-net-worth individuals seeking to borrow over £5 million. With strong relationships with both private banks and specialist lenders, Enness can tailor mortgage solutions that align with unique financial situations and asset profiles. The team at Enness understands the nuances of assets under management and the flexibility offered by private banks, enabling them to secure competitive rates and favourable terms even for clients without traditional income streams. Whether you are looking for private bank lending, specialist options, or fast bridging loans, Enness Global's expertise ensures a streamlined and efficient lending process that meets their needs effectively.