How to get a £1m mortgage

  • Describe some of the difficulties achieving a £1m plus mortgage
  • Identify some of the ways to improve the chances of getting a £1m mortgage
  • Describe the elements of the relationship with the lender that would improve a borrower's chances
How to get a £1m mortgage

As we approach 31 October 2019, the possibility of a no-deal Brexit is still a possibility.

Yet for all the uncertainty that has ensued since the country first voted to leave the EU over three years ago, investor demand for UK-based assets seems to have remained robust.

Take bricks and mortar as an example.

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According to the Office for National Statistics, UK house prices have increased by 1.2 per cent in the year to May 2019.

Yet perhaps most impressive has been the performance of the prime central London (PCL) property market.

A top destination for high-net-worth (HNW) individuals and wealthy UK residents, PCL property prices increased by 2.7 per cent between Q1 and Q2 2019, according to Central London Portfolio.

With the average price of a PCL house estimated to be £1,878,004, the property investment consultancy also revealed that the number of transactions increased between the two quarters by an impressive 23 per cent.

These figures not only reflect the demand we are seeing for PCL property, but the potential capital growth that can be delivered as a consequence of rising prices.

For those wishing to make a prime property purchase, however, the process of securing a mortgage can be complicated, stressful and time-consuming.

Regardless of one’s financial position, be they a HNW, a seasoned property investor or a foreign national, there are countless factors that can lead to a mortgage application being rejected.

Over the last decade, we have seen lenders become more risk averse in the UK, adhering to stringent approval processes that fail to take into account the unique financial circumstances of the applicants.

Do not be deterred, however, as the risk factors involved in a prime property mortgage (those £1m and more in value) can be easily managed from the outset, reducing delays and the chances of an application being rejected.

Understanding the rules and regulations

In the world of finance, it is generally accepted that the higher the value of a transaction taking place, the more complicated, expensive and regulated it will be.

This does of course ring true for the majority of financial transactions we see; governments tend to regulate large-scale transfers of capital through taxes, and this can sometimes deter people from pursuing new investment opportunities.

Fortunately, however, this unspoken rule does not apply to the mortgage market. Here in the UK, prime property mortgages are regulated by the same set of standards that govern the entire lending market.

This is welcome news for borrowers, yet it is important not to overlook the fact that lenders still need to abide to a general set of rules when assessing applications.

This is where the individual circumstances of each application are taken into account.

Since 30 September 2017, for instance, the borrowing criteria for landlords (defined as those who own three or more properties) has changed.