Family trusts have long been a cornerstone of wealth management. For many high-net-worth (HNW) and ultra-high-net-worth (UHNW) families, property is at the heart of those structures. From Prime Central London townhouses to sprawling country estates, placing assets into trust can help ringfence wealth for future generations, protect against business risks, and ensure continuity across succession.

But when it comes to raising finance against property held in trust, families often discover that what makes sense from a legal or tax perspective does not always align with lender appetite. Mainstream banks can be wary, specialist lenders are inconsistent, and even private banks apply varying criteria. The result is that financing property within a trust becomes a specialised exercise — one where the right structuring and the right partners make all the difference.

Why Families Place Property Into Trust

The motivations for placing property into trust are diverse, but they usually come down to control, protection, and foresight. Parents or grandparents often want to ensure assets pass smoothly to beneficiaries without fragmentation. Business owners may seek to shield family wealth from commercial liabilities. Others are focused on long-term tax planning, where trusts form part of a wider estate strategy.

Whatever the rationale, trusts introduce a layer of complexity when property finance is required. Lenders want clarity over who owns and controls the property, how decisions are made, and — most importantly — how enforceable their security will be if something goes wrong. It is at this point that families can find their carefully structured trust colliding with the more rigid requirements of the lending market.

How Lenders Approach Trust-Owned Property

In 2025, the lending landscape around trust property has matured, but it is still far from straightforward. High-street banks tend to take a cautious line. Their systems and risk frameworks are designed for individual or corporate borrowers, not for assets held within discretionary or offshore trusts. For most mainstream lenders, the presence of a trust is enough to end the conversation.

Specialist lenders sometimes offer more flexibility, but with conditions. They may insist on personal guarantees from trustees or adult beneficiaries, or restrict their appetite to onshore UK trusts where the legal framework is clearer. Even then, the underwriting process can be slower, with enhanced due diligence required to satisfy anti-money laundering and know-your-customer obligations.

Private banks remain the most adaptable. Accustomed to dealing with complex wealth structures, they are often willing to lend against trust property, particularly if the family already has a broader relationship with the bank. Yet even here, attitudes vary. Some banks embrace offshore discretionary trusts; others will not consider them at all. Terms can also be stricter, with higher equity requirements or bespoke covenants.

The Practical Challenges Families Encounter

For families seeking to release capital from trust-owned property, the hurdles are rarely financial in nature — the wealth is evident — but structural. Trustees may be required to formally approve borrowings, which can slow the process if the trustees are professional institutions. In other cases, lenders are concerned about the enforceability of their charge: if the trust deed contains restrictions that could impede repossession, appetite diminishes quickly.

Where trusts are based offshore, additional complications emerge. Jurisdictional differences raise questions about recognition of lender security, and some institutions will decline applications outright rather than wrestle with cross-border legal uncertainties. Even when a lender is willing, the process of verifying beneficiaries and controllers can be exhaustive, particularly for discretionary trusts with wide classes of potential heirs.

Structuring Solutions That Work

Despite the challenges, liquidity can be unlocked — provided families approach the market strategically. The most common route is through private banks, who will look beyond the ownership structure to the bigger picture. If a family has significant assets under management with the institution, the bank may extend mortgage or refinance facilities against trust property as part of a wider relationship.

In some circumstances, trusts hold property via underlying companies. Here, lenders may prefer to structure the loan at company level, with the trust as shareholder. This satisfies their need for a corporate borrower while preserving the family’s intended trust structure. Elsewhere, specialist bridging lenders may step in when speed is essential — for instance, to settle tax liabilities or cover urgent costs pending insurance payouts.

One recent example involved a UHNW family with a £10 million London property held within a Jersey trust. The heirs wanted to release capital for business expansion but were turned away by mainstream lenders. By engaging a private bank with cross-jurisdictional expertise, they secured a bespoke facility at competitive rates. The loan was structured with the trust as borrower but backed by a comfort letter from the professional trustee, giving the bank sufficient security.

Trust Property and the Wider Estate Planning Puzzle

Financing property within a trust rarely exists in isolation. It often intersects with broader estate and inheritance planning. For instance, families may need liquidity to meet inheritance tax obligations, but wish to avoid forced sales. This is a theme we’ve explored in our article on Inheritance Tax and Mortgages in 2025: How Property Finance Plays a Role in Estate Planning. Similarly, probate delays can complicate access to property wealth, which we analysed in Probate Finance in 2025: How Families and Executors Can Unlock Estate Value.

By integrating trust finance with these related strategies, families can maintain stability and ensure wealth transitions smoothly, rather than being eroded by time pressures or liquidity gaps.

How Willow Can Help

At Willow Private Finance, we regularly advise HNW families whose property is held within trust structures. Our expertise lies in navigating lender appetites, understanding which institutions are comfortable with complex arrangements, and structuring facilities that respect the family’s estate planning intentions.

We work closely with trustees, whether professional or family members, to ensure the process runs smoothly. Where cross-border elements exist, we liaise with specialist lenders and private banks who have the expertise to operate across jurisdictions. And crucially, we coordinate with clients’ lawyers and tax advisers to ensure finance complements, rather than undermines, broader planning goals.

In a market where many brokers are deterred by the word “trust,” Willow brings both experience and relationships to the table. That means liquidity can be secured when it is needed most, without compromising the integrity of the family structure.

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