Editor's note: This brief was summarised by The Property AI Newsroom from a report by PropertyWire. Read the original article for full details.

High-Value Mortgages Rise as Wealthy Buyers Choose Debt Over Cash

The number of regulated residential mortgages worth £5 million or more rose to 333 in the past year, up from 313 the previous year, according to new data from real estate adviser Karis Capital. The total value of these loans reached £3 billion, with the average loan standing at approximately £10 million.

A shift away from cash purchases

The data points to a shift away from cash purchases at the top end of the market. Wealthy overseas buyers are increasingly using mortgage financing to purchase high-value residential properties in Britain, borrowing even when they have the cash available so they can preserve capital for alternative investments.

Francesco Amato, Senior Debt Advisor at Karis Capital, said the increase reflects a change in how wealthy buyers are approaching the property market, with many choosing to borrow to preserve capital for other investments. He noted that arranging finance at this level requires more than securing competitive interest rates, as borrowers often have complex income structures, international assets or bespoke lending requirements.

London dominates high-value lending

London accounted for 88% of mortgages worth £5 million or more, with 292 of the 333 total mortgages secured against properties in the capital. That is up from 84% the previous year, when 263 such mortgages were completed in London. Only eight of the 333 mortgages above £5 million were for properties outside London, the South East and the South West.

Amato noted that London continues to attract buyers from the Middle East and Asia, with some viewing current market conditions as presenting long-term investment opportunities despite regulatory changes.

Market context for agents

The data emerges against a backdrop of recent changes to non-domicile tax rules, which have affected international buyers in the UK property market. Specialist mortgage products have become increasingly important for buyers with complex income structures and international assets.

The rise in high-value mortgage activity contrasts with broader trends in the specialist lending market, where speed of execution and tailored solutions have become increasingly important factors for borrowers. For letting agents and inventory clerks operating in the prime central London market, the figures suggest continued international demand at the top end of the rental and sales markets, with more transactions being financed rather than completed with cash.