For families with property portfolios, the question is not whether succession will happen, but how well it will be managed. In 2025, succession planning has become more complex than ever. Rising property values, shifting tax policy, and evolving lending criteria mean that passing wealth across generations is not as simple as writing a will or naming heirs.

Instead, families must consider how portfolios will be structured, financed, and governed when the next generation takes the reins. Without careful planning, heirs may face liquidity shortages, lender reluctance, or disputes that erode wealth. With foresight, however, portfolios can become engines of stability, protecting legacy, preserving relationships, and enabling growth.

This blog examines the challenges and opportunities of succession planning for family property portfolios in 2025, with a focus on governance, lender attitudes, and financial preparedness.

The Rising Importance of Succession in 2025

Property has always played a central role in intergenerational wealth transfer. But the stakes are higher today. UK property values have grown significantly, meaning portfolios once viewed as “comfortable” are now multimillion-pound estates. At the same time, tax and regulatory regimes have tightened, making succession far less straightforward.

Inheritance tax (IHT), for example, is often the most pressing concern. While the technicalities must be addressed by professional tax advisers, the practical challenge is liquidity. Families may own £20 million of property but struggle to raise cash to settle liabilities without forced sales. As explored in Inheritance Tax and Mortgages in 2025, borrowing against property can sometimes provide the solution—but only if structured carefully.

This growing tension between high-value assets and liquidity needs is driving many families to reassess succession strategies. They recognise that legacy is not just about passing assets, but about ensuring those assets can be managed and financed without disruption.

Governance Structures and Continuity

One of the most effective tools in succession planning is governance. Families are increasingly formalising structures through trusts, family offices, or shareholder agreements.

Trusts, as discussed in Family Trusts and Borrowing Power, can provide continuity by centralising control. Rather than assets being fragmented among heirs, trustees maintain oversight, ensuring a unified strategy.

Family offices are another model. These entities handle not only property but also broader investments, philanthropy, and administration. They provide a professionalised framework that reduces reliance on individual family members.

Yet, governance is only effective if it is practical. Overly complex arrangements can create borrowing barriers. Lenders want clarity on decision-making and liability. If governance creates opacity, facilities may be delayed or reduced. Families must therefore strike a balance: enough structure to prevent disputes, but not so much complexity that it deters lenders.

Lender Attitudes Toward Succession

Lenders care about succession because it directly affects repayment risk. A portfolio managed effectively through a generational transition is seen as resilient. One that faces disputes, fragmentation, or unclear leadership is seen as risky.

In 2025, lenders increasingly scrutinise governance during underwriting. They ask:

• Who will control the assets if the principal passes away?

• Are successors prepared and engaged?

• Does the structure provide accountability?

If answers are unclear, lenders may impose stricter terms or lower leverage. This is why families planning succession must not only think about wills and tax, but also about how lenders will perceive the transition.

The Liquidity Challenge

Liquidity is the most pressing issue in succession. Property is valuable but illiquid. If heirs face significant tax bills or need to equalise inheritances among siblings, they may be forced to sell at inopportune times.

One solution is pre-emptive borrowing. Families can arrange facilities while principals are alive, creating a line of liquidity that heirs can access later. Another is life insurance, which, as explored in Whole of Life Policies and Property Finance—can provide cash at precisely the moment it is needed.

The key is preparation. Waiting until succession occurs often results in distressed decisions. Preparing years in advance allows families to structure borrowing when terms are most favourable.

Example Scenario: The Sudden Transition

Consider a family with a £40 million portfolio, managed personally by the founder. The founder dies unexpectedly, leaving properties split among four children. Each has different priorities: one wants to sell, another wants to expand, two want to hold.

The lack of governance creates disputes. Meanwhile, the IHT bill is due, and the family has little liquidity. They approach lenders, but because ownership is fragmented and heirs are uncoordinated, terms are unattractive. The result is forced sales at lower values.

This scenario illustrates the dangers of inadequate planning. By contrast, a family with a trust, liquidity arrangements, and aligned heirs would navigate the transition far more smoothly.

Preparing Heirs for Responsibility

Succession is not just about legal structures, it is about people. Heirs must be prepared to assume responsibility for significant assets. Lenders take comfort from engaged, knowledgeable successors. They worry when heirs appear disinterested or divided.

Families can address this by involving heirs early. Some invite younger generations to sit on family boards, shadow trustees, or participate in investment committees. This builds confidence for both the family and lenders.

Succession is as much about culture as it is about contracts. Families that prepare heirs for stewardship, not just inheritance, preserve wealth more effectively.

The Role of Professional Partners

No family can manage succession alone. Solicitors, tax advisers, and brokers each play critical roles. Solicitors ensure governance structures are legally sound. Tax advisers optimise inheritance and ownership planning. Independent brokers, like Willow, ensure that borrowing strategies align with these plans.

As explored in Why Strategic Mortgage Advice Beats Online Comparisons, independent advice is particularly valuable for complex family portfolios. Lenders vary in how they view trusts, intergenerational guarantees, and governance frameworks. Whole-of-market brokers can match families with lenders who understand and support their priorities.

The Long-Term View

Succession planning is not a one-time event. It is an ongoing process that must adapt to changing laws, markets, and family dynamics. Families that review plans regularly, refresh governance documents, and engage heirs early are best placed to preserve both wealth and harmony.

Ultimately, succession is about balance. Families must balance tax efficiency with borrowing flexibility, legacy with liquidity, and governance with lender expectations. Those who achieve this balance can pass portfolios across generations without disruption, ensuring assets continue to serve as engines of stability and growth.

How Willow Can Help

At Willow Private Finance, we work with families to ensure property finance supports succession planning. We liaise with solicitors, tax advisers, and trustees to align borrowing strategies with broader estate plans. Our goal is to ensure liquidity and flexibility are in place when families need them most.

With access to the whole market, we can identify lenders comfortable with intergenerational structures and help families avoid surprises during transitions. We believe succession should preserve wealth, not erode it—and the right borrowing strategy is central to that goal.

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