As more families and high net worth individuals turn to trusts for wealth protection and inheritance planning, the question arises: how do lenders really feel about trusts when it comes to property finance?

This isn’t just a legal structure—it’s a growing part of modern portfolio strategy. But lender appetite has historically been inconsistent, and in 2025, it’s evolving fast.

Why Use a Trust to Hold Property?



Trusts offer clear benefits:

• ✅ Inheritance tax mitigation
• ✅ Control over asset distribution
• ✅ Protection from creditors or claims
• ✅ Succession planning across generations

For many families, especially those with multiple beneficiaries or cross-border ties, a trust structure brings clarity and control. But not all lenders are on board.

Lender Concerns: Why Trusts Can Be a Red Flag

Some lenders still hesitate. Here’s why:

• Complexity: Trust structures add legal layers that lenders need to fully understand.
• Title Issues: If the trustee holds legal title, but the borrower is a beneficiary, underwriting becomes more involved.
• Perceived Risk: Lenders often see trusts as harder to enforce against in default scenarios.
• AML/KYC Barriers: Identifying settlors, trustees, and beneficiaries slows down onboarding and compliance.

Result? Fewer mainstream lenders are willing to lend against trust-held property—unless they specialise in complex or high-value finance.

What’s Changing in 2025?

Lender attitudes are softening in the face of growing demand:

 🔹 Private banks and specialist lenders are more open to trust ownership—especially for HNW and UHNW clients.
🔹 Digital ID verification and improved AML processes are helping lenders satisfy compliance teams faster.
🔹 Offshore structures are now better understood and no longer an automatic decline (if tax-compliant and transparent).
🔹 More brokers are educating lenders and packaging trust-based deals clearly, reducing friction.

In 2025, it’s no longer a straight “no” from lenders—it’s “help me understand the structure.”

What Lenders Look for in a Trust-Owned Property Application

To improve the chances of approval:

• 📌 Clear Trust Deed showing who the beneficiaries are, and who has control.
• 📌 Strong trustee profile (ideally a corporate or professional trustee).
• 📌 Clean source of funds for both deposit and repayment.
• 📌 Full transparency of any offshore elements—names, addresses, and tax residency.
• 📌 A well-structured application that explains the rationale behind the trust.

Willow’s Experience with Trust Lending

At Willow, we’ve worked with:

• Family investment trusts buying prime London homes
• Offshore discretionary trusts acquiring UK student accommodation
• UK family trusts refinancing portfolios for IHT planning

These cases demand experience. We know which lenders to approach—and how to present the structure for approval.

When a Trust Structure Works Best

A trust could be the right structure if you're:

• 🔐 Protecting family assets from future claims
• 🏡 Planning to pass property to the next generation
• 🌍 Managing cross-border tax or succession issues
• 💷 Seeking IHT efficiencies within a broader estate plan

But structure it wrong—and you risk shutting the door on finance altogether.

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our mortgage specialists.

We’ll help you find the smartest way forward—whatever rates do next.