HNWS are not being served by the UK’s high street banks, as many struggle to acquire a mortgage, reports Arun Kakar
HNWS are growing fed up of the one-size-fits-all model employed by high street banks, according to a new survey. Some 79 per cent of HNWs say that banks fail to take into account personal circumstances when assessing mortgage applications, applying ‘tick box methods’ instead.
The poll, from London-based prime property mortgage provider Butterfield Mortgage Limited, surveyed over 500 HNWs with a net worth of over £1 million. It paints a picture of waning confidence in the UK’s high street banks, with many HNWs struggling to secure mortgages form the firms.
Two in three (67 per cent) respondents said they didn’t believe that the firms cater to the needs of property investors and buy-to-let landlords, and 60 per cent said that believe that it is becoming ‘increasingly difficult’ to access credit, as their capital is tied up in ‘existing real estate’.
As a result, the survey found that a large majority (73 per cent) rely on brokers to help secure lenders that cater to their needs. The report suggests that this is a result of the challenges HNWs face when trying to secure credit, with 44 per cent of respondents stating that they have found it ‘inherently difficult’ to access credit because their capital is tied up in existing real estate investment. Some 38 per cent said that they struggle to get mortgages from banks because they don’t have ‘standard monthly paycheques’.
Because lenders employ this ‘tick box’ method, many fail to understand the individual circumstances of HNWs, paradoxically making them ineligible for their mortgage products.
‘It may come as a surprise that of all the demographics, the UK’s wealthiest people often find themselves at an immediate disadvantage when it comes to applying for credit from banks; be it mortgages or credit cards,’ said Alpa Bhakta, CEO at Butterfield Mortgages Limited. ‘In reality, the rigid “tick box” methods applied by many conventional lenders are not compatible with HNWs’ unique and often complicated financial profiles.
‘To overcome these challenges HNWs need to seek out brokers or lenders who can commit the necessary time and expertise to understand their situation and, in turn, deliver mortgages that meet their specific needs.’
Arun Kakar writes for Spear’s