When families think about property finance, they tend to focus on the numbers: loan-to-value ratios, interest rates, stress tests, and rental yields. While these metrics are critical, lenders in 2025 are increasingly looking beyond spreadsheets. They want to understand who is behind the borrowing, how decisions are made, and whether the family has the governance structures to manage risk responsibly.

This is where the concept of family governance enters the picture. In simple terms, governance refers to the way families organise ownership, decision-making, and accountability. For lenders, strong governance signals professionalism and stability. Weak or informal governance, on the other hand, raises concerns about succession, liability, and the ability to manage a portfolio during times of stress.

In this blog, we explore why governance has become a key factor in lender confidence, how families can demonstrate professionalism without losing flexibility, and why these issues are central to intergenerational wealth transfer.

Why governance is on the lender agenda

Lenders have always cared about numbers, but in 2025 they also care about behaviours. This shift has been driven by three key developments:

• Regulation. Following multiple property market cycles and the regulatory changes that followed, banks are under pressure to show they lend responsibly. They must evidence that borrowers are not just able to repay today, but also able to sustain facilities under stress.

• Complexity. Family portfolios have become more sophisticated, often held through SPVs, trusts, or cross-border structures. Without governance, lenders fear these arrangements could collapse into disputes or inefficiency.

• Succession. With trillions in wealth expected to transfer between generations over the next two decades, lenders want assurance that successors are prepared to take responsibility.

Governance provides answers to all three. A family that can demonstrate clear ownership, transparent decision-making, and readiness for succession stands out as lower risk—even if their leverage is higher than average.

This theme echoes the points raised in Succession-Ready Estate Finance in 2025, where we explored how lenders assess continuity as assets pass down.

What governance looks like in practice

Governance in family property businesses does not need to be complicated. At its core, it involves clarity: clarity about who owns what, who decides what, and who carries liability for borrowing.

For example, a family might hold properties through several SPVs. Governance means ensuring that each company’s directorships are up to date at Companies House, that minutes exist to record major borrowing decisions, and that dividend policies are documented. To a lender, these small signals suggest the family runs its portfolio as a professional enterprise rather than as an informal hobby.

Private banks, in particular, scrutinise governance closely. As discussed in Private Client Finance in 2025, they often integrate lending decisions with a family’s wider wealth picture. If governance is weak, they may hesitate to extend large facilities, fearing that disputes or disorganisation could undermine repayment.

Example scenario: siblings with differing views

Consider a family portfolio owned jointly by three siblings. Two are actively involved, while one has little interest in day-to-day management. A lender assessing a refinancing application asks who will provide personal guarantees. The engaged siblings are happy to sign, but the third resists.

Without governance, this could stall the facility. But if the family already had an agreement clarifying roles, liabilities, and reward structures, the lender would see stability. The application would likely proceed smoothly, with terms tailored to the engaged siblings’ commitment.

This is why governance is not just a family issue—it is a lender issue. Structures give lenders confidence that disagreements will not derail repayment.

Lender expectations in 2025

In the current market, lenders expect more than just financial statements. They look for:

• Clear ownership structures. Families should be able to evidence who owns shares in SPVs or trusts.

• Defined roles. Lenders prefer to know who is responsible for decision-making, rather than dealing with a diffuse group.

• Succession planning. If parents are stepping back, lenders want evidence that successors are prepared and willing to take responsibility.

• Transparency. Annual accounts, minutes, and governance documents demonstrate professionalism.

This parallels the trend we noted in AI in Mortgage Underwriting, where underwriting is no longer just about static figures but about dynamic risk assessment. Governance is part of that dynamic assessment.

The risks of weak governance

Families without governance face several risks when seeking finance:

• Lender hesitation. Even if the portfolio is strong, banks may reduce loan size or pricing if they fear disputes or lack of accountability.

• Succession challenges. Without clear agreements, the death or retirement of a key family member can throw borrowing into uncertainty.

• Intergenerational disputes. If liabilities are unclear, heirs may resist taking on debt, forcing refinancing under unfavourable terms.

We saw similar dynamics in Cross-Collateralisation in 2025, where tying properties together can expose families to unexpected collective risks. Weak governance magnifies these challenges.

Intergenerational governance: preparing heirs for responsibility

One of the most significant reasons governance matters is succession. Inheritance is no longer a passive process. Lenders want to know that heirs are not only inheriting assets but also the ability to manage debt responsibly.

For families, this often means gradually introducing the next generation into decision-making. That could involve adding them as directors of SPVs, involving them in refinancing discussions, or ensuring they understand lender expectations.

In some cases, families create formal family constitutions or charters, setting out values and decision-making processes. While not legally binding, these documents give lenders comfort that the family has thought about long-term continuity.

This governance work aligns with broader estate planning themes, as explored in Trusts and Property Finance in 2025.

Governance and lender flexibility

The irony is that strong governance often increases flexibility. Families with clear structures are better placed to negotiate with lenders. They can ask for portfolio-wide facilities, bespoke repayment profiles, or more lenient stress tests—because lenders trust their ability to manage risk.

Weak governance, by contrast, limits options. Lenders may only offer standardised products, cap borrowing, or require additional guarantees. In other words, governance does not just make life easier internally—it can directly reduce the cost of borrowing.

Future outlook: governance as a competitive advantage

Looking ahead, governance will become a competitive differentiator in property finance. Families with clear structures will secure better terms, more flexibility, and stronger relationships with private banks. Those without will increasingly find themselves locked out of premium lending options.

This reflects the broader evolution of the market, where lenders are moving away from transactional lending and towards relationship-driven models. As we discussed in Why Strategic Mortgage Advice Beats Online Comparisons in 2025, families that think strategically—rather than just chasing rates—are better positioned for long-term success.

Governance is part of that strategic mindset. It is no longer optional. It is the foundation of lender confidence in 2025.

How Willow Can Help

At Willow Private Finance, we understand that governance is as important as borrowing terms. We help families present themselves to lenders not just as property owners, but as professional, organised businesses with clear structures and plans for succession.

That might mean helping prepare documentation for lenders, explaining how guarantees align with ownership, or negotiating facilities that reflect the family’s governance framework. Because we are independent and whole of market, we can match families with lenders who value governance and offer terms accordingly.

For families looking to strengthen governance in 2025, Willow provides not only finance solutions but also the guidance to make portfolios lender-ready for the next generation.

Frequently Asked Questions

What is family governance in the context of property portfolios?
It includes the rules, decision processes, roles, transparency and oversight structures that guide how property assets are managed, transferred, and financed across generations.

Why do lenders care about governance?
Governance gives lenders confidence that decisions will be rational, stable and predictable. It reduces the risk that internal disputes or opaque decisions will compromise repayment or ownership.

Which governance features strengthen lender entitlements?
Clear bylaws or constitutions, owner agreements, board or advisory structures, voting thresholds, succession rules, and documented dispute resolution all help.

Can a lax governance structure reduce borrowing power?
Yes. Weak governance makes a family appear risky. Lenders may impose higher pricing, stricter covenants, or outright reject financing without proper oversight.



How does Willow help families improve governance for lender alignment?
We audit existing governance structures, propose enhancements suited to property financing, simulate decision flows, and overlay governance design with lender expectations so the structure supports borrowing, not hinders it.