One question that I have been asked several times over the past few weeks is: ‘Why are brokers so fascinated with the £1m-plus property market?’ Surprisingly, this question was even asked by a private banker, who in the next breath, said that the sort of client he looks for is someone who could be introduced to the bank’s investment arm. In other words, the type of client who would buy a £1m-plus property.

But there is another question worth asking: why are a handful of brokerages focusing on the niche that is large mortgage loans? There are several good reasons. Low interest rates have been great for those borrowers on lenders’ low standard variable rates or cheap lifetime trackers but have done little for the mass mainstream remortgage market that was a mainstay of brokers’ income pre-credit crunch. Reduced funding levels mean fewer mortgage products are available, tighter criteria, little in the way of buy-to-let deals for landlords, and in some instances, better rates available direct from the lender via its high-street branches than the intermediary. This combination of factors has proven fatal for a number of intermediary businesses.

At the same time, the prime property market has proved remarkably resilient during these tough economic times. Prime property in central London and the country continues to defy the odds and perform strongly. Demand for large loans comes increasingly from overseas, as the fall in sterling makes multi-million pound properties at the smartest locations in London and in the country ever more desirable.

As a result, there is plenty of demand for large mortgage loans in the £500,000 to £3m loan market – and beyond. Since the credit crunch hit, private banks have demonstrated much more of an appetite to lend to this sort of client than high-street lenders. The latter tend to be fairly conservative when it comes to lending criteria on bigger loans, with many of them refusing to consider mortgages above £500,000. Lloyds signalled its intentions clearly recently when it announced that it would no longer consider interest-only on loans above £500,000. Yet the majority of borrowers at this level would opt for an interest-only deal, relying on bonuses to pay down the capital more quickly than the average 25-year term on a repayment deal.

Private banks are still the best bet for borrowers who may have a relatively modest income but good bonuses. They often want to develop a relationship with the borrower that goes beyond the mortgage so may wish to see a substantial sum of money deposited with the bank or want the client to invest with them. Other private banks demand that borrowers open a current account with them, and consider investing with them in the future.

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For the right sort of client, private banks can be extremely accommodating with higher LTVs than are available on the high street. They are also more willing to be flexible with regard to interest-only, which is crucial for clients who may have modest incomes, topped up with sizeable and fairly reliable bonuses.

While high-street banks have been cutting back on interest-only lending, restricting maximum LTVs and refusing certain options such as bonus payments, inheritance or selling the property as a satisfactory way of clearing the capital, private banks are likely to take a view on a case-by-case basis, depending on the client. For example, they may agree to a LTV of more than 75% on an interest-only basis on a large loan with the understanding that anything above this is repaid within, say, two years.

However, some high-street lenders are becoming more flexible and understanding of the large loan market. While private banks have offered the most competitive rates on large loans since the credit crunch, increasingly high-street banks are getting in on the act.

The broker with the right contacts and the right client with good equity and strong income may be able to approach a high-street bank on a loan over £1m, even if this is not something that is advertised to the general public. High-street banks may also have fewer conditions than private banks for offering the loan.

Brokers who know and understand their market and have good contacts with high-street and private banks can be of real value to clients looking for a large loan. Many deals are only available through brokers, and most clients simply would not know where to start if they were to try to do it themselves. In a climate where brokers are often muscled out of the way by some lenders, this is very attractive.

There is now greater need for advice at the higher end of the property market than ever before. Brokers can form a bridge between the banks and clients who do not yet have the relationship.

Even wealthy cash buyers need a mortgage. It often does not make sense for someone from overseas to bring all their money into the UK – structuring their debt almost becomes a necessity. A wealthy Russian buying a home in the UK where the family can live while the children attend school, for example, may not want to bring his wealth into the UK, but prefer to borrow up to 70% of the purchase price. He is the sort of client who needs a broker to advise him – and point him in the right direction.

Melanie Bien is director of Private Finance