Mortgage broker Springtide Capital has predicted that the pricing and availability of mortgage finance at £1m and above will be at its most competitive since before the financial crisis.
The broker has witnessed a particular increase over the last four months in the number of high street lenders re-entering this market. For the previous five years, it has seen this market being the preserve of private banks, however there is now a significant shift towards the retail banks offering purely transactional deals and becoming increasingly keen for the business.
Springtide Capitals predict the impact of this trend will be heightened competition among the retail and private banks for high net worth clients. This, in turn, is likely to reduce the cost of borrowing on mortgages over £1m over the next 12 months.
Henry Knight, managing director of Springtide Capital, said: “Following the financial crisis we witnessed the percentage of high street lenders withdraw from the large loan market, leaving the opportunities with the private banks.
“Now that the likes of Nat West, Santander, Virgin, Halifax and Woolwich have all come back to the market with new propositions, we can expect to see more competition and innovation amongst all banks.
“The significant difference is that private banks will invariably be looking for a wider relationship, often insisting on funds under management whereas the high street lenders are able to offer this level of finance without asking for any such commitment from their customers. We therefore expect as a result of this we will see increased pressure on private banks, resulting in rates falling in the months ahead for both those purchasing and refinancing.”