Private Label, which is part of the Brightstar Group, will be focusing on residential first-charge cases of more than £500,000, particularly those where the circumstances are less mainstream, such as complex incomes and non-standard property types.
The Private Label brand was originally started back in the late 1990s, before it was relaunched by Brightstar in 2017 to target innovative new lending deals.
However, Rob Jupp, chief executive officer of Brightstar, admits that “the traction we got was disappointing”, as lenders were cautious about the types of product – such as a dedicated Airbnb mortgage – and this was reflected in the pricing.
The move to high net worth
But after seeing that Brightstar was receiving a lot of calls from brokers who were having difficulty placing large loan cases, the firm decided to rejig the Private Label proposition to focus instead on high net worth cases.
Jupp explains: “We were seeing a large number of intermediaries, including high net worth specialists, who had tried the private banks but couldn’t get the cases placed, so they came to us. We didn’t have a formal proposition for this with our lenders. So we looked at, if we could bring them the leads, could they be more dynamic with their processes?”
“If you are a broker that doesn’t want to do these sorts of cases, then you can refer it over. We’ll go to all the high net worth banks for you. But if you are in this market, and you’re still coming up against a brick wall, we have a panel of lenders that will take a sympathetic look at it and price it based on the individual risk.”
The brand, which officially relaunched yesterday, has already received £14m-worth of enquiries from brokers, which Jupp describes as a “relief”.
“It shows that there’s a place for this, that we can add value to the people we work with and they will pick up the phone to work with us.”
Research this week from Butterfield Mortgages suggested that high net worth borrowers struggle to get credit from high street banks, with four out of five of those surveyed suggesting that banks’ lending criteria is too rigid.
Jupp pointed out that for a long time there has been a broad assumption that if a borrower is looking for a large mortgage “then you’re going to be alright. Chances are you have a good salary, good credit rating and you’re buying a nice house in a nice community. That’s often right, but in a minority of cases it’s very wrong.”
This may be because the borrower is looking for too large a loan on an interest-only basis, is buying non-conventional land, or may have been out of the country for too long.
“These interesting cases, the mainstream market won’t do them,” Jupp concludes.