At TBMC we have seen a noticeable uplift in buy-to-let expat enquiries from brokers and landlords over the last year, which affirms predictions after the Brexit referendum that the resulting weakened pound may make the prospect of investing in UK rental property an increasingly attractive option for those living abroad.
Many expats are keen to keep a connection with the UK and the yields on properties in the UK are often way ahead of other countries. So,despite the Government’s initiatives to dampen buy-to-let purchases over the last couple of years, expat appetite shows no signs of abating.
The higher demand for expat mortgages has resulted in an increased number of lenders and products available for UK citizens who are living and working abroad. In fact, TBMC has added 7 new lenders to its expat panel in the last 18 months and now offers expat products from 16 different lenders. Recent additions include Foundation Homeloans, Vida Home Loans, Castle Trust, Together and State Bank of India.
When dealing with expat enquiries there are certain factors to consider for placing cases successfully. Most lenders require applicants to own an existing property in the UK – either residential or buy-to-let – and to have a UK bank account. However, we often get calls about clients who have sold their home to move abroad and therefore are not current UK property owners. In which case there are just a few options available on our panel namely Skipton International, Together and Saffron Building Society.
Clearly, country of residence is an important factor when placing expat cases as many lenders either publish acceptable countries or have a list of banned countries. Most lenders accept all EEA countries and many include those on the FATF list. Any countries that are sanctioned or considered high risk are likely to be effectively black listed.
At TBMC we mostly get enquiries for expats living in the EU, USA,Hong Kong and Singapore. Also, Australia seems to be an increasingly popular destination with more lenders accepting applicants who are living Down Under.
Lenders often have a higher minimum loan size for expat mortgages of between £100,000 and £150,000, although this is not always the case and lower loans are available. Saffron Building Society has a minimum loan of £30,000,alongside no major restrictions on country and no minimum income requirement either.
Expat lenders usually have a higher minimum income requirement than for standard mortgages. For example, Axis Bank has a minimum of £40,000 and Interbay has a minimum of £50,000. Even higher incomes may be required for self-employed applicants such as an equity partner in a law firm or a business owner with an internationally recognised accountant.
Alongside higher income criteria, most lenders are particular about the type of employment the applicants undertake, such as requiring expats to be a professional or employed in a senior position within a UK, EU or US agency or recognisable and traceable company.
Some lenders extend their standard range products to expat customers with a few caveats to their mainstream criteria. Others have specific expat ranges such as with Landbay and Vida Homeloans.
If you are regularly receiving expat enquiries it is worthwhile getting as much information about the client’s circumstances as possible at the outset as this can help to narrow down lender options early in the process. TBMC is well placed to help with expat cases and has up-to-date knowledge on lending policies in the marketplace.