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There’s business at the top end if you know who to ask

There is potential for brokers to make serious money if they ask the right questions of high-earning clients

PHIL WHITEHOUSE, HEAD THE MORTGAGE ALLIANCE
PHIL WHITEHOUSE, HEAD THE MORTGAGE ALLIANCE

The housing market has always been a fractious place, full of statistics and contradictions. This might have something to do with its emotive nature and the pockets of higher value areas which seem to create their own demand and pricing demographics.

The latest Royal Institution of Chartered Surveyors housing market survey suggests that new buyer enquiries dropped for the fifth consecutive month as the housing market slowed further during October.

In contrast, a report from Savills says London property prices slowdown, with values surging by up to a third by 2015.
While not exactly contradictory, it illustrates how differently the market can be reported on.

So it is little wonder that some confusion occurs when trying to decide when the best time to sell or buy may be.

The Savills research suggests the higher end of the market will benefit most over the longer term. It says the biggest rises are likely to be in Kensington and Chelsea – where average prices will leap by 33% to smash the £1m barrier – and Westminster, where they will also go up by a third.

This makes interesting reading as it comes on the back of data from Investec Specialist Private Bank which reports a 46% increase in the number of mortgage deals it completed between June and August compared with the first three months of 2010.

The value of these mortgage loans has risen by 43%, compared with a nationwide increase of 29% over the same period.

Investec says that increased demand for its high-end mortgages of £1m or more is due in part to its personalised service.

It is also because even high-income professional and established entrepreneurs are struggling to get loans approved due to the inflexible lending criteria that is used by other banks.

There may be home owners with mortgages above £1m sitting on SVRs, who may benefit from refinancing

Inevitably the higher-end mortgage market has also suffered from the funding problems that have blighted much of the market and reduced the number of high street lenders willing to lend over £1m.

But some are cautiously returning to the market. This is of course in addition to the private banking sector.

Much like the mainstream mortgage market, it may be the case that there are a number of people with mortgages above £1m sitting on SVRs who may benefit from refinancing.

The reality is that funding issues have made an already daunting area of the market even more so, especially for brokers not familiar with some of the complex issues.

But there is an opportunity to engage with a specialist broker who will have extensive private banking knowledge and contacts.

This is an area of the market that can provide good commissions through a simple referral process. This opens the door to help more higher net worth clients, creating more cross-selling opportunities with the potential of larger premiums.

Of course, not every customer will have property worth £1m, but for intermediaries with clients in the right postcode, this could be an area of the mortgage market where asking a few additional questions could result in them making some serious money.

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