In 2025, the luxury property finance market has entered a new era of sophistication and competition. For high-net-worth (HNW) and ultra-high-net-worth (UHNW) borrowers, traditional private banks are no longer the only — or even always the best — option. Private debt funds have surged to prominence, offering bespoke, flexible finance that rivals the most established banking institutions.
In Prime Central London (PCL), where property values often exceed £5 million, liquidity, speed, and discretion are paramount. While private banks continue to dominate relationship-led, long-term lending, debt funds have emerged as agile, capital-rich alternatives capable of completing transactions in days rather than weeks.
At Willow Private Finance, we’re seeing a distinct shift in how our clients leverage both options. Increasingly, borrowers are blending traditional and alternative lending structures to achieve the right balance of cost, speed, and flexibility. Understanding the distinction between these two lender types — and knowing when to use each — is now essential to successful property finance strategy.
For further background, you can read Private Bank Mortgages Explained: Benefits and Drawbacks.
Following the volatility of recent years, the 2025 lending landscape is defined by stability at the top end and segmentation beneath it. Interest rates have begun to ease slightly from their 2023–2024 highs, but capital remains selective. Private banks are returning to cautious optimism, focusing on affluent clients who can bring broader assets under management (AUM).
Meanwhile, private debt funds are seizing the opportunity created by that caution. Backed by institutional and family office capital, they operate with greater autonomy and risk tolerance, moving decisively into markets that banks might hesitate to serve. The result is a market in which both lenders coexist — each appealing to different borrower priorities.
For HNW clients acquiring or refinancing multi-million-pound properties in Knightsbridge, Belgravia or Chelsea, the decision increasingly comes down to whether one values price efficiency or speed of execution more highly.
Private banks remain the cornerstone of long-term property finance for high-value borrowers. Their lending philosophy is built on relationship depth and financial transparency. These institutions don’t simply provide mortgages — they extend holistic financial partnerships, often tied to wealth management, investment custody, or foreign exchange services.
Because of this relationship model, private banks frequently offer highly competitive interest margins, especially when the borrower is willing to place investment portfolios or liquid assets with the institution. In exchange, borrowers benefit from lower rates and longer amortisation periods, sometimes stretching to 25 or even 30 years. Many facilities are structured on an interest-only basis, allowing clients to manage liquidity efficiently without liquidating other investments.
However, such privileges come with scrutiny. Private banks are bound by regulatory frameworks that demand extensive due diligence. Borrowers must provide verified income records, asset statements, and comprehensive ownership structures. For many international clients or entrepreneurs with fluctuating income, that level of transparency can be cumbersome. It’s not unusual for underwriting and legal approval to take six to ten weeks — perfectly acceptable for long-term planning, but challenging when speed is critical.
Ultimately, private banks excel where stability, relationship continuity and long-term pricing matter most. They’re less suited to transactions requiring fast turnaround or unconventional asset structures.
Private debt funds have transformed the lending landscape for borrowers seeking speed and flexibility. These funds are typically backed by institutional investors, private equity, or family offices, and they prioritise returns through short to medium-term, asset-backed lending.
Unlike banks, which lend based on income verification and AUM, debt funds are more focused on the underlying property and the borrower’s exit plan. Their underwriting process assesses asset value, location, and liquidity rather than conventional affordability measures.
The advantage of this approach is agility. Many funds can approve and complete loans within ten to twenty-one days. They’re ideal for clients purchasing off-market opportunities, negotiating fast exchanges, or requiring bridging finance pending a liquidity event. Terms are tailored on a case-by-case basis, with interest often rolled up into the facility to minimise cash flow strain during the loan period.
That flexibility, however, comes at a cost. Private debt fund pricing typically carries a higher interest rate than a private bank’s equivalent facility — sometimes by two to four percentage points. Loan durations are shorter, usually ranging from twelve months to five years. These are designed as transitionary solutions, giving borrowers time to stabilise an asset or prepare for a long-term refinance.
Still, for clients who value confidentiality, speed, or bespoke structuring over headline cost, private debt funds have become an indispensable part of the HNW financing toolkit.
One of the most interesting dynamics of 2025 is that many HNW clients are no longer choosing between banks and debt funds — they’re using both. The concept of “blended finance” has gained traction as a way to combine immediate liquidity with longer-term cost optimisation.
A client might use a private debt fund to complete a competitive off-market purchase within ten days, then refinance to a private bank within six months once due diligence and AUM transfers are complete. Others might employ a senior bank loan supplemented by mezzanine debt from a fund, achieving leverage of up to 75–80% loan-to-cost for development or acquisition.
This hybrid strategy reflects the sophistication of today’s high-value borrowers. They recognise that private banking and debt fund lending aren’t opposing options — they’re complementary tools in a well-structured financial plan. As brokers, our role at Willow is to identify where each fits within a client’s broader liquidity strategy, ensuring cost and timing align with investment goals.
While choice has increased, complexity has too. The first challenge is documentation. Private banks demand rigorous proof of income, asset verification, and clear source-of-funds documentation. For international clients or those with multi-jurisdictional holdings, this can extend timelines significantly. Debt funds are faster but expect clarity around exit strategies — whether through a sale, refinance, or liquidity event.
Another hurdle is currency exposure. Many borrowers earning in USD, EUR, or AED must consider currency volatility when taking sterling-denominated debt. Some private banks offer dual-currency facilities to mitigate this, but debt funds typically do not.
Finally, there’s the question of regulation. Most private bank mortgages are regulated under FCA rules when secured against a primary residence, while private debt fund loans are generally unregulated. For investment or corporate borrowers, this distinction shapes both the legal structure and documentation process. Understanding which category a loan falls into — and ensuring it remains compliant — is where experienced brokerage support is essential.
In the current market, success hinges on preparation and timing. Borrowers seeking private bank finance should ensure documentation, business structures, and asset declarations are ready early. Demonstrating transparency accelerates credit committee approval and can even unlock more favourable pricing.
For those using private debt funds, clarity around exit strategy is paramount. Lenders want reassurance that a viable refinance or sale will occur within the term. Borrowers who can evidence a clear, step-by-step exit plan tend to negotiate better terms and lower fees.
At Willow Private Finance, we also encourage clients to think strategically about lender relationships. Building continuity with a private bank — even while using debt funds for tactical needs — creates long-term flexibility. Over time, that relationship can yield better terms, faster approvals, and broader cross-collateral opportunities.
Consider a London-based entrepreneur purchasing a £15 million apartment in Eaton Square. With only seven days to exchange, the client secures a £10 million facility from a private debt fund within ten days. The loan covers acquisition, fees, and part of the refurbishment budget.
Six months later, the borrower transfers investment assets to a private bank, which refinances the debt fund loan at 5.7% on a 20-year, interest-only basis. The refinance releases additional capital to fund another acquisition — demonstrating how debt funds and private banks can work in tandem to deliver both speed and long-term value.
Looking ahead, the boundary between private debt funds and private banks is expected to blur even further. Some institutions are already introducing hybrid lending models — combining short-term drawdown flexibility with longer-term banking relationships.
With PCL property continuing to attract global capital, borrower demand for bespoke finance will only grow. The most successful HNW borrowers will be those who integrate both options into a cohesive financial plan, balancing efficiency, leverage, and timing.
For Willow Private Finance, this means maintaining close relationships across the spectrum of lenders — from Tier 1 private banks to boutique debt funds — so that our clients always access the most appropriate structure for their needs.
At Willow Private Finance, we specialise in structuring bespoke property finance solutions for high-net-worth individuals and families. Our team combines deep market insight with whole-of-market access, ensuring clients receive impartial advice and tailored funding — whether from private banks, debt funds, or layered combinations of both.
From fast completions to strategic refinancing, we coordinate every aspect of the lending process — working seamlessly with legal, tax, and wealth advisers to ensure the final structure aligns with long-term goals and regulatory compliance.
Q1: What’s the main difference between private debt funds and private banks?
A: Private banks focus on relationship-based, long-term lending tied to broader wealth management. Debt funds specialise in fast, flexible, short-term lending secured primarily against property value.
Q2: Are private debt fund loans riskier?
A: They carry higher interest rates due to flexibility and speed but are asset-backed and carefully structured by experienced brokers to align with client strategy.
Q3: Can I use both a private bank and a debt fund?
A: Yes. Many borrowers now use both — a debt fund for acquisition and a private bank for long-term refinance.
Q4: What’s the typical loan size for HNW lending?
A: Private banks generally lend from £1 million upwards, while debt funds can provide facilities from £500,000 to over £100 million.
Q5: How long does it take to complete with each lender?
A: Private banks typically complete within six to ten weeks; debt funds can often close within two to three.
Q6: Are all loans regulated by the FCA?
A: Residential loans for personal use may be regulated, but most investment or corporate loans from debt funds and private banks are unregulated.
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About the Author
Wesley Ranger is the Director of Willow Private Finance and has over 20 years of experience in property finance. He specialises in complex, high-value mortgage cases for HNW and international clients, helping structure bespoke solutions across private banking, bridging, and structured debt markets.
Important Notice
This article is for general information purposes only and does not constitute personal financial advice.
Mortgage product availability, eligibility, and rates depend on your individual circumstances and may change at any time.
Always seek tailored advice before committing to any financial arrangement.
Willow Private Finance Ltd is authorised and regulated by the Financial Conduct Authority (FCA No. 588422).
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