{"id":13590,"date":"2022-10-26T15:03:19","date_gmt":"2022-10-26T07:03:19","guid":{"rendered":"https:\/\/www.dev.articusfinance.com\/uncategorized-sg\/the-rise-in-competitiveness-of-private-banks-for-uk-mortgages"},"modified":"2023-08-18T11:08:16","modified_gmt":"2023-08-18T03:08:16","slug":"the-rise-in-competitiveness-of-private-banks-for-uk-mortgages","status":"publish","type":"post","link":"https:\/\/backup.articusfinance.com\/sg\/blog\/the-rise-in-competitiveness-of-private-banks-for-uk-mortgages","title":{"rendered":"The rise in competitiveness of private banks for UK mortgages"},"content":{"rendered":"

What is a private bank? <\/strong><\/span><\/p>\n

<\/p>\n

Private bank<\/a> mortgages<\/span><\/span> will judge each application on its merits rather than follow strict criteria or tick lists as many high street lenders tend to use. For example – private banks and private bankers consider various income streams and will not always look for a standard number of years of accounts or traditionally steady income streams. This, for many of our clients, is an essential solution.<\/span><\/p>\n

We have seen a significant increase in the number of private banks over the past decade \u2013 each with a different appetite for solutions and clients.<\/span><\/p>\n

Download our High-Net-Worth guide<\/a><\/span> for further information on HNW solutions.\u00a0<\/span><\/p>\n

Why use a private bank?<\/strong><\/span><\/p>\n

Private banks can potentially offer large mortgages to high-net-worth individuals, with the emphasis very much on individual circumstances rather than satisfying criteria. Private banks are also likely to provide a tailored service in the long term, meaning they can come with more flexibility.<\/span><\/p>\n

This flexibility gives our clients the freedom to do more with their money through debt. They are able to work with clients on a personal level to understand their goals and find the most effective way to achieve them.<\/span><\/p>\n

The rise in the competitiveness of the private bank <\/strong><\/span><\/p>\n

Changes to the private bank took place progressively over the 1980s and 1990s. This was largely an evolutionary process, but several factors contributed to an intensification of competition and tended to erode the functional distinctions between high-street lenders and Private banks.<\/span><\/p>\n

Private banking used to be popular at the time only by UHNW investors, as high street lenders often capped loans to \u00a31 million. However, by about 2010 \u2013 partly due to rising house prices \u2013 the high street raised their maximum loans to \u00a32m, and the rates they applied were far cheaper when compared to Private Banks.<\/span><\/p>\n

Private banks also regularly asked for assets under management which traditional banks did not require.<\/span><\/p>\n

In recent years, this rise in the competitiveness of high-street lenders has forced private banks to become more competitive. The cost of a private bank, when compared to a traditional bank, is now close to parity, whilst some private banks no longer require assets under management.<\/span><\/p>\n


\nThe use of private banks today <\/strong><\/span><\/p>\n

From resilience, the need for more significant margins and the capacity of private markets to adapt to the various competitions coming from high street lenders, the private banking industry faced positive evolution over the years.<\/span><\/p>\n

This has not only benefited their traditional clients (UHNWs)<\/span><\/a> but also has increased their \u2018perfect\u2019 client profile to the lesser wealthy, giving the wider audience access to private banks. Some examples of their uses are described below:<\/span><\/p>\n