Banks Give Boost to U.K. Luxury Real Estate Market
In spite of the economic and logistical challenges associated with Brexit, the United Kingdom continues to hold major international influence and remains a “market to watch” as it navigates challenging times.
As home to England, Scotland, Wales and Northern Ireland; the U.K. continues to play a significant role in NATO, the World Trade Organization, and the World Bank. As a whole the nation represents a global force culturally, commercially and financially as a hub for international banking and one of the most coveted property markets in the world.
The Fix: Banks, Clients, Opportunities
While Brexit has had a cooling effect on the real estate market, especially in London, many also see an opportunity. Of notable interest is a move recently by U.K. financial institutions to make it easier for their affluent clientele to participate in the real estate market, locally and beyond. For example, Deutsche Bank recently made a move to offer regulated mortgages to private banking clients. This will occur through access to competitive loan to value and interest rates for those clients wanting to borrow $3M British pounds or greater to purchase exclusive residences.
The bank will also assist their clients in managing liquidity with mortgage financing and equity release options on homes they currently own as well as will provide substantial mortgages without involving assets under management, enabling their customers to borrow more without leveraging what they have.
Rival private banks are stepping up too, with for example, offers of a line of credit against assets to enable home purchases.
Going Beyond Britain
Potential for these opportunities extends beyond Britain into the markets where affluent U.K. buyers often invest in second homes, including desirable areas in France, Spain, and Italy such as Tuscany, the French Riviera, and Marbella, on Spain’s “Costa del Sol.” Ultimately, the potential impact for these creative financing solutions in the U.K. could be a boon to the high-end real estate market throughout Europe, and beyond.
For more information on the U.K. market, check out our Global Market Guide: London.