OakNorth launches mortgages for high net worth individuals, SME business owners and clients with atypical income streams, with the aim of building its mortgage loan book to £260m this year
07-05-2019
  • OakNorth will target affluent and high net worth individuals (HNWIs)[1];
  • These customers are typically under-served by the high-street and private banks as they typically don’t have stable and recurring levels of income;
  • OakNorth will lend from £500,000 (in exceptional cases loans can be considered above £250,000) and will differentiate itself by providing quick turnarounds on decisions and taking a holistic view on applicants’ finances;
  • OakNorth expects to capture up to 5-10% of the under-served residential mortgage market by year-end (c.£4.25bn), accounting for a total of c.£260m.

OakNorth – the bank for entrepreneurs, by entrepreneurs – has today announced it is entering the retail mortgage market with lifetime tracker rate products, aimed at affluent individuals with atypical sources of income.

The six largest banks in the UK dominate 77 percent of the mortgage market[2], but often find it commercially unviable to create bespoke mortgages for these individuals as they lack the appropriate cost base and expertise to cater to them. Individuals with non-uniform or atypical sources of income, those who may be asset-rich but regular income-poor, usually find it difficult to pass the high-street banks’ lending criteria, as most banks only accept regular and established forms of payments as ‘income’. These individuals therefore require more bespoke lending solutions, and as a lender that has provided over £3bn in bespoke loans to UK entrepreneurs since its launch, OakNorth has the necessary expertise and tailored credit analysis models to cater to this unique market niche.

Since its launch in September 2015, OakNorth has built a reputation within the UK’s entrepreneurial community as a lender that completes transactions quickly – weeks compared to the months it takes larger lenders – and takes a customised approach to lending. It will apply this same approach to its mortgage offering, enabling a currently under-served portion of the market to secure the finance they need to buy a property in the UK.

The challenger has hired three highly experienced mortgage advisers – Kevin Appleton, Matthew McDonald and Mark Howell. Kevin joins from the Financial Ombudsman Service where he helped resolve disputes between financial businesses and their customers. Prior to this, he was a mortgage broker and also spent 18 years with the RBS Group (RBS Bank, Coutts and Co and the NatWest Private Client Group) where he undertook complex credit reviews and applications for new and existing borrowers and managed and built a portfolio of ultra-high net worth private clients. He also has an extensive track record working with entrepreneurs having built a private portfolio of more c.600 entrepreneurs whilst working as a private banker at NatWest’s Mayfair Commercial Office. Matthew was previously a broker, responsible for generating and transacting business throughout his existing network and by building new relationships with introducers and clients. He also spent 12 years at Coutts & Co which saw him responsible for managing and building a portfolio of over 200 high net worth clients with combined assets and liabilities in excess of £250m. Mark joins from the Bank of Ireland where he held the position of Director of Marketing and Customer Management, UK Mortgages.

Ben Barbanel, Head of Debt Finance at OakNorth, said: “High-street banks have limited mortgage offerings when it comes to borrowers who don’t have a regular or established source of income, such as the self-employed or business owners. Private banks, on the other hand, tend to have high entry requirements that are unfavourable to most of these individuals. Lenders are typically unwilling to offer bespoke terms to their mortgage products and as a result, more than one in ten business owners in the UK are unable to access the finance they need to purchase their first home.

“By leveraging our experience in creating tailored loans for businesses, we can plug this gap and provide our growing portfolio of property investors and developers with mortgage solutions that are attractive, quick, convenient and easy to use.”

To apply for a mortgage with OakNorth, please visit: www.oaknorth.com/lending/mortgages/

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE’.


[1] For mortgage purposes HNWIs are defined by the Mortgage Conduct of Business Rules (MCOB) as a customer with an annual net income of no less than £300,000 or net assets of no less than £3,000,000, or whose obligations are guaranteed by a person with an income of such amounts.

[2] https://www.fca.org.uk/publication/research/statistics-and-sources-sector-overviews.pdf