Foreign lenders are stepping in to offer mortgages to high-end customers, Clear Property Investment has learned.

Private banks in Asia, Scandinavia and the Middle East are underpinning UK High Street lenders by offering more competitive rates to borrowers looking at loans worth half a million pounds or more. Some rates are as low as 1.74 per cent a year.

British-based Knight Frank Finance has already signed an exclusive deal with Swedish bank Skandinaviska Enskilda Banken to help finance loans of £1 million to clients worth more than £5 million. The rate is just one per cent over Libor (the rate at which banks lend to each other) which is currently sitting at 0.74 per cent.

"National Bank of Abu Dhabi and Ahli Bank are also very keen to lend to the right kind of client," Knight Frank's Simon Gammon told the Sunday Times newspaper.

"We have seen a marked shift in the number of foreign private banks looking to lend in the UK, pricing considerably below the market leaders."

Brokers at Savills Private Finance meanwhile confirm more than 12 foreign banks had made an appearance in the lenders market since August.

Ian Gray at largemortgageloans.com said he'd learned from various foreign banks that they were willing to lend to wealthy clients without demanding the right to manage their investments.

"Rising competition in the market is driving down rates further," he added.

In addition, foreign banks tend to have fewer restrictions and, unlike many British banks at this moment in time, are happy to welcome self-employed borrowers.

The prime property market - houses worth more than £1 million plus - have suffered least in the property downturn. Statistics from the Council of Mortgage Lenders meanwhile showed lending was at its lowest for thirty years.

Melanie Bien from broker Private Finance confirmed the prime property market was a good one to invest in. She added: "Demand is strong as there is a plentiful supply of cash buyers from overseas.

"In the mainstream market, difficulties in getting mortgage finance, combined with fears about rising unemployment and financial uncertainty, are having a negative impact.

For further information on mortgages and foreign deals contact any of our Clear Property Investment staff.

 

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