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High Net Worth Mortgage – What Profits Will It Show On The Home It’s Paying For?

Posted January 2, 2018 by in High Net Worth Mortgages, Mortgages

With some conflicting property news out there, it’s a small wonder that the property market appears to be deflating. The news, however, is not all bad, and in fact, some of the doomsayers may even be exaggerating a little.

Climbing the property ladder and obtaining the right mortgage advice has, however, become a little more complicated. This is especially true when looking for a high net worth mortgage targeted at high net worth individuals (HNWI).

Depending on the available figures that you look at will depend on what you read into the current state of the property economy. A report published by Hamptons International indicates that in 2017 92% of homeowners selling their homes made a profit. The question, though, is how much?

The average profit was around £92,000. While that figure may seem staggering, it only paints part of the picture. It is wiser to drill down and have a look at the detail. One in five, that’s an eye-watering 20%, managed to double their money. Whether that’s half a million pounds or ten thousand pounds, double is double. An exceptionally good return however you dress it up.


High Net Worth Mortgage and Profitability

Those seeking out a high net worth mortgage for the high net worth individuals will not be disappointed when looking at the results for the urban areas where this type of property finance for individuals is predominant.

Real profits can be seen at the higher end of the market. This is where high-value properties and mortgages for high net worth individuals play a part. Sellers in London may not have experienced the highest margins, but the higher value properties enjoyed a soaring return nevertheless. Kensington and Chelsea enjoyed the highest gains in the country with an average gain of £940,494. This is slightly down from 2016, but certainly not to be scoffed at.

High-value properties in London are still displaying returns regardless of the predictions of the aforementioned doomsayers. These figures are taken from sellers that have owned their properties for at least nine years. Holding onto your home would seem to be a good idea. These properties were bought around or shortly after the infamous crash of 2007 to 2009. All things considered, that recovery is impressive.

The research covered all of England and Wales, and those in the North-East were the least likely to make a profit, with only 79% doing so. Interestingly though, those in the South-East are more likely to sell their homes for a profit. Moreso than those in London. It may be time for high net worth individuals to have a look at investing a bit further out of town.

Making a profit, however, has not been about simply buying a property. And certainly, for many, it’s not about waiting and then selling it again a few years later. It is clear that those that have made the most profit have made improvements with renovations and extensions.


Negative Equity Is Still Out There

Things are, however, not as rosy for all homeowners. Figures indicate that one in four towns are still suffering from real negative equity problems. There are patches of the country where property values simply have not managed to recover from the 2007-2009 crash. These are not run down impoverished neighbourhoods. The property blackspots are found in popular areas such as Blackpool. Parts of the Lake District are affected too. There are still many properties that are valued well below the prices they were fetching a decade ago.

At the time of seeking out a high net worth mortgage, it is important to consider several factors. Firstly, rather than looking at the property market on average, it is critical that the investor explore how values fluctuated in the last one or two decades. Investigating this in line with economic changes that have been weathered should indicate whether a profit is going to be made in the short, medium, or long term.

When seeking out a high net worth mortgage, make sure that you speak to an experienced and reputable broker. Belgravia Property Finance is experienced at seeking out the best property finance options for high net worth individuals requiring high net worth mortgages.

Tags: high net worth mortgages

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