Queen’s Banker Halts New EU Mortgages as Hard Brexit Looms

Coutts & Co., the private U.K. bank that counts Queen Elizabeth II among its clients, has warned customers within the European Economic Area that it can no longer offer them mortgages due to Brexit.

The lender, owned by Natwest Group Plc, will lose so-called passporting rights that allow it to operate freely within the EEA if the current Brexit transition period expires on Dec. 31 with no formal agreement between the European Union and the U.K., according to an email to clients seen by Bloomberg. As the U.K. last month ignored a deadline to extend the transition period, the bank has stopped accepting lending applications from the EEA, it said.

The EEA bloc includes all EU countries as well as Iceland, Liechtenstein and Norway.

Coutts is writing to a small number of clients impacted by the changes to allow them time to make alternative banking arrangements, a spokesman for the bank said by email. The lender remains committed to international clients outside the EEA and within the U.K., the spokesman said.

Britain and the European Union are “unlikely” to reach a free-trade agreement by the end of the year unless the U.K. softens its demands, Michel Barnier, the bloc’s chief negotiator, said last week. If the two sides fail to strike an accord, the U.K. will face the biggest upheaval in its relationship with its largest trading partner in a generation as tariffs and quotas are reimposed.

The number of Europeans buying homes in London is already falling due to Brexit, according to Rob Perrins, chief executive officer of Berkeley Group Holdings Plc, the city’s largest housebuilder. Buyers from the continent account for about 1% of the company’s sales, down from as much as 5% previously, Perrins said in June.

©2020 Bloomberg L.P.

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