Residential property market insights – High net worth individuals.

If our latest residential property market report is anything to go by, it’s been a rough few years for home owners, buyers and movers alike. Rising house prices, interest rates and living costs (and decreasing housing stock) have made it harder for the average Brit to make their property ambitions come true.

But, with optimism that we could be back on the road to residential revival, what about the individuals at the other end of the scale; the successful entrepreneurs, business owners, property investors and other affluent home buyers? How have their property dreams fared?

To give us the inside take on what high net worth individuals have been experiencing over the last two to three years, and what could be on the horizon in the near future, we spoke to property industry expert, Michelle Niziol, and Together‘s CEO of Sales and Distribution, Marc Goldberg.

Here’s what they had to say…

“I think there’ll be a drastic change in the conversation over the next 12 to 18 months for high net worth individuals.

I’ve got over 20 years of experience helping high net worth individuals build their property portfolios, and I’ve seen a real nervousness in the last 24 to 36-month period due to economic concerns and a large number of businesses leaders – specifically in the tech sector – making significant job and funding cuts. This has led to us seeing a large number of clients offloading their residential property portfolios.

That said, unsurprisingly, hesitancy seems to be lifting and portfolio diversification seems to be an attractive move for many. High net worth individuals are seeing a decent return in the bank, but they don't want all their money tied up that way. Now, they’re looking to the future and investing in bricks and mortar again. Not only that, but I’m hearing an increasing number of high earners who have a renewed attitude towards inheritance; many are now spending more in their retirement, rather than leaving it behind for the next generation. House prices are still relatively stable and competition isn’t as strong as it was pre-COVID, but both will start to rise again soon as more high net worth buyers continue to return to the residential property space.

It wouldn’t be a conversation about high income property buyers without talking about Airbnb. The demand for holiday homes is huge – both for personal use and for investment purposes. A mix of property types in the residential space is having a resurgence, after things dying off during the COVID era.

Brokers, or high net worth individuals who might be looking to build their personal property portfolios, have an amazing opportunity… the ones that position themselves correctly will be the ones that reap the benefits.

My advice to brokers? Be open minded about complex income. For example, many clients are reluctant to draw out income from businesses or assets due to tax, or have complex income streams, so approach situations with logic, personalisation and provide a specialist solution that works for each case.”

Our research found that higher net worth applicants with a ‘non-standard’ income profile have occasionally had their mortgage application rejected. Of these rejections; 10% were due to sporadic income and 22% highlighted the primary reason was due to being self-employed. Those figures just aren’t good enough, and lenders need to work harder to support these individuals achieve their property ambitions.

In our conversation with Ken Roscoe, he discussed how it’s not unusual for high income earners to receive a large windfall payment – often as a result of one-off work projects, investments, sales of properties or businesses. Ken highlighted that these income contributions may be tens or hundreds of thousands of pounds, but may be sporadic in nature and be the only income source for an individual over a number of months.

In cases like this, particularly in the current economic climate, individuals need the support of a trusted lender who will work with their individual case to provide a bespoke solution. Having a key relationship with a finance specialist can result in their circumstances being fully understood, leading to the right customer outcome.

For me, this is where a specialist lender like Together excels. We have an incredibly diverse and broad product set, and flexible criteria designed to support a wide range of people across the societal spectrum.

It means we can adapt to circumstances and challenges that other lenders can’t or won’t, ensuring we deliver the best service and outcome. By working together with these valued customers, we can provide products that suit their individual needs, both residentially, but also across their wider business through commercial mortgages, development loans and buy to let or investment portfolio loans, when and where required.

It’s this commitment to our customers that has enabled Together to grow over the last 50 years, and, as we aim to become the UK’s most valued lender, we’re looking forward to opening doors for even more customers in the future.”

Looking for your next personal property or investment opportunity? Our dedicated team are on hand to offer bespoke lending solutions designed to help high net worth individuals achieve their property ambitions, with speed and simplicity. Get in touch now.

If you’ve enjoyed reading what Michelle and Marc have had to say, why not find more insightful and in-depth analysis and opinion across a range of topics in our residential property market report?