It can be frustrating if the item you’ve set your heart on comes to market but your funds are tied up and you risk missing the opportunity. Gary Edwards, Credit Advisory Specialist at HSBC Private Banking explains how bespoke lending based on true relationship banking really can make clients’ dreams come true.
One of the common themes shared by many of the most sought-after luxury purchases is rarity. Whether it’s a holiday home in an exclusive location, a one-off yacht or an exquisite piece of jewellery, what adds to its desirability is its availability – or lack of it.
It’s a theme supported by the Knight Frank Luxury Investment Index 20181, showing that the top investment of passion across all surveyed countries (except Africa and the Middle East) was art – a truly unique collector’s item.
Whether you want to splash out on a luxury yacht, a holiday home in a desirable location or treat yourself to a classic car at auction, timing can be everything.
The next biggest gains were coins (12 per cent) and wine (9 per cent), with jewellery seeing a fall at -5 per cent. The Index also showed that coloured diamonds were another must-have item during 2018, with blue proving more popular than yellow, and classic cars saw increased interest – although Porsche as a marque fell by 6.5 per cent.
When timing is everything
The inclusion of these asset types on an Investment Index can be misleading, however, as for many collectors the ability to buy these assets is often driven by the heart as much as by the head.
Whether you want to splash out on a luxury yacht, purchase a holiday home in a desirable location or treat yourself to a classic car at auction, timing can be everything. Many of the most sought-after passion purchases owe much of their desirability to the fact that they are unique or extremely rare and that the opportunity to acquire them is fleeting. And even though you may technically be able to afford them, if you can’t put your hands on the cash quickly enough, it can mean missing out.
Don’t miss an opportunity
For many of our Private Banking clients, liquidity can be an issue. Perhaps your wealth is tied up in a business, or in property, and difficult to realise in the short-term window of purchasing opportunity.
The key to achieving that is for Private Banking clients to have open and regular conversations with their relationship managers, so that opportunities are acted upon, not passed up. After all, if you don’t ask, you don’t get.
How bespoke lending could work for you
When one of our Commercial Banking clients and his wife were keen to kick-start their retirement by purchasing a holiday home in their favourite location, there was just one problem.
Although they quickly found a top-of-the-range holiday home in the South of France that met all their requirements, the funds they needed to complete the purchase were still tied up in their business. The business was on the market, but even though it was a standout, highly successful enterprise and there was no doubt that a sale would be achieved, it was unlikely to happen in the timeframe the couple needed to secure the home.
With other buyers interested in the property, and real estate in this particular location rarely appearing on the market, it seemed that the couple’s dreams would be dashed. However, a chance conversation with his Commercial Banking Relationship Manager led to a referral to our specialist Bespoke Lending team.
Given the strength of the business and its pending sale, we were happy to advance funds to help the client and his wife secure the holiday home of their dreams, with the repayment to be made from the proceeds of the business sale.
Want to find out more about funding your dream purchase? Speak to your Relationship Manager or Credit Adviser to understand how we can help.
1The Wealth Report, Knight Frank, 2019 ↩