Still something of a specialist space in the UK, the market for HNW regulated mortgages now has a new entrant in the shape of Deutsche Bank Wealth Management.
(Updates with comment, reaction)
Deutsche Bank Wealth Management has rolled out mortgages for private banking clients in the UK, adding competition in the space for HNW residential lending in the UK, which is still something of a niche area.
The German bank said that its offering is the “latest step for the firm in extending its market-leading European footprint into the UK”.
Clients who want to borrow £3 million ($3.8 million) or more can apply for mortgages in the UK, and later in nine other jurisdictions including France, Italy and Spain. The service covers mortgage refinancing and equity release, as well as preparations for dry lending - ie offering large mortgages without requiring assets under management for clients wishing to build a wider wealth management relationship - Deutsche Bank said in a statement today.
The HNW mortgages market in the UK, which was squeezed in the aftermath of the 2008 financial crisis, is expanding. As reported earlier in May, UK-based OakNorth is entering the space. The UK’s six largest banks manage around 75 per cent of the retail market but are often not commercially set up to lend to those who are asset-rich but whose income flows are at odds with mainstream lending requirements.
Last year, this publication wrote about the growth in bespoke mortgage financing, reporting on Bermuda-based Butterfield’s expansion in the area after closing down its private banking presence in the UK in 2016. Wealthy clients with complex mortgage needs are served by a relatively small number of banks. Among them are UK-based Arbuthnot Latham, Coutts, UBS and Brown Shipley. High street banks are getting in on the act as balance sheets improve, with more providing single-digit million mortgages, where previously only private banks were able to step in, Shaun Church, director at Private Finance, a specialist broker in the space, told this publication last year.
"Wealth managers are increasingly recognising that their clients need support with property investment and access to a growing range of borrowing options including equity release. Deutsche Bank Wealth Management’s launch into the regulated mortgage market is further evidence of the shift in the market and a very welcome development," Will Hale, CEO at Key, the financial services group, said
“This offering is a game-changer for Deutsche Bank Wealth Management in the UK and demonstrates our commitment to this market,” according to Michael Morley, head of Deutsche Bank Wealth Management in the UK.
“Our sophisticated clients are increasingly coming to us looking for higher value borrowing for principal private residences, high value buy-to-let properties and commercial buildings here. We’ll now be able to meet the full spectrum of their needs in the UK, putting our deep international experience and investment banking capabilities to work on their behalf.”
Recent hires in and around the real estate and lending space at Deutsche have included Saydam Salaheddin, previously at Credit Suisse, who took on the role of head of real estate for Europe, and James Lockyer, previously at SG Kleinwort Hambros, who will report to Salaheddin as head of UK regulated mortgages.
New arrivals also include Justin Minien, formerly at Metro, who will support Matthew Spencer, head of intermediaries, in working with mortgage brokers.