Mortgage finance most competitive since 2007

The London-based broker says it has seen a particular increase over the last four months in the number of high street lenders re-entering this market. For the previous five years this market had been the preserve of the private banks. But there is now a shift towards the retail banks offering purely transactional deals and becoming increasingly keen for the business.

The impact of this trend could 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 twelve months.

Henry Knight, managing director, 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 NatWest, 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.”

Knight added: “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.”