Britain’s ultra-wealthy are increasingly lending and borrowing millions within their own social circles as banks grow more cautious and slow-moving in approving high-value loans. The trend reflects a growing private credit market among the rich, where speed, trust, and flexibility outweigh traditional financial procedures.
Rise of Peer-to-Peer Lending Among the Rich
Loans ranging from £3 million to £10 million — and sometimes exceeding £50 million — are now being arranged between affluent individuals, often secured against luxury assets such as real estate, company shares, art, jewellery, yachts, and private jets.
According to Adam Russ, Deutsche Bank’s global head of wealth management and business lending, these private deals are often rooted in personal connections:
“When we lend money, whether you’re a bank or a person, it starts with character — it’s the first thing you assess.”
Such arrangements have become particularly attractive as banks tighten lending standards and lengthen approval times due to regulatory compliance, including “know your customer” (KYC) checks.
Real Estate: The Hotspot for Private Loans
The real estate sector has emerged as a primary destination for this type of financing. Property developers facing funding shortfalls are turning to private lenders to bridge the gap left by traditional banks.
Higher interest rates, increased stamp duty, and an exodus of wealthy residents from London have made prime property development riskier and less appealing for major lenders. As a result, private financiers — often other wealthy individuals or family offices — have stepped in.
Laura Uberoi, head of private wealth finance at Addleshaw Goddard, explained why the rich often need to borrow despite their wealth:
“The trick to being a multibillionaire is having zero liquidity. Borrowing is consistently needed by ultra-high net worths to fund ongoing liquidity needs and their next business venture.”
Family Offices Expanding into Lending
Family offices — private firms managing the wealth of affluent families — have increasingly created debt arms to invest in real estate.
Nazir Dewji, global real estate head at law firm BCLP, said:
“We’ve seen family offices creating debt arms over the last two to three years as an alternative way of investing into real estate.”
These loans are typically structured to support property acquisitions or early-stage developments.
Cohort Capital’s Rapid Rise
London-based Cohort Capital exemplifies this new lending landscape. Founded as a family office six years ago, it now orchestrates syndicates involving 15 family offices, which contribute 90% of its capital, with the rest coming from banks.
By the end of 2025, Cohort expects to have originated £1.5 billion in loans, primarily short-term financing averaging £15 million per deal.
Co-founder Matt Thame said business has surged as banks retreat, citing an example where his firm funded £60 million in just 10 days for the purchase of a student residence in Paddington worth £85 million — at an interest rate of 12%.
Speed and Trust Over Bureaucracy
High-net-worth advisers say private lenders are faster and often more willing to take risks than banks. Giuseppe Ciucci, executive chair of the Stonehage Fleming Group, noted:
“Family offices are much faster at providing funds at a very attractive rate, particularly when property is pledged as security. It’s become more of a go-to solution than it used to be.”
While some lenders still carry out due diligence, others rely solely on personal trust and expertise — especially when operating in niche property markets.
A private banker revealed that one client, an expert in a small segment of London’s super-prime real estate market, preferred not to perform KYC checks at all, relying instead on his confidence in collateral valuations.
Collateral and Risk Appetite
Real estate remains the preferred form of security because it is easily registered and recovered in case of default. As one family office head put it:
“With real estate, it’s quick and easy to take charge over the assets.”
However, other forms of collateral, such as art and yachts, are less appealing due to mobility and valuation risks — “famously, yachts move,” he quipped.
Interest rates in this shadow lending world can start at 10% for straightforward deals, but rise to 20% or more when unconventional or high-risk assets are used as collateral. As Uberoi observed,
“People will pay it because they want quick money — and because no one else will lend against those risky assets.”
A New Financial Ecosystem for the Ultra-Wealthy
As traditional banks remain cautious and regulation-heavy, Britain’s richest are building a parallel financial ecosystem — one driven by personal trust, high returns, and rapid liquidity.
For many of the UK’s elite, borrowing from friends, family offices, and fellow tycoons has become not just a convenience, but a core feature of how wealth circulates and multiplies at the top.
