High Value Mortgages - Using Other Assets As Security

Although the use of non-property assets to assist with land purchases is not new, it is becoming increasingly more popular. In this new era, where equity is king, and cash can sometimes be difficult to realize, offering additional security is a viable alternative for some.

We all have clients that are ‘asset rich and cash poor’ so rather than being a barrier to business, we have sought to innovate and use the private banks more flexible approach to underwriting and wealth management, to gain an advantage for our clients.

Typical assets would be;

• share portfolios,

• cash on deposit (but in locked accounts),

• bonds and stock options where bonuses have been deferred.

• Other property

• Cash not in the UK

We have been asked to consider many asset classes, ranging from gilts, to the more exotic; such as yachts, vintage wine, antiques and paintings. Although this is somewhat rarer it goes to show that banks are willing to negotiate and take a view on what is now acceptable security.

The most frustrating point for us was seeing many deals which had merits but simply weren’t fitting inside the box with high-street lenders. By having direct links to credit committees we have been able to articulate and demonstrate the best points of a case rather than try to go through an automated system.

Although some cash will generally be needed and usually the asset will have to be moved under the lending bank’s management, it allows clients that have a lack of liquidity to access rates and risk profiles that wouldn’t normally be available to those that are highly leveraged.

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