Almost five million Britons live or work outside the UK and many of them don’t want to give up property ownership in their homeland. But it has got a lot harder to get a mortgage in the UK if you don’t live here – even if you’re a British expatriate. It’s doable, but the number of lenders that offer expat mortgages and buy-to-let loans is limited.
Buy-to-let from abroad
If you want to buy a property to generate rental income while you live abroad, you’ll need a “buy-to-let expat” mortgage. But property you purchase to be your primary residence will require a “residential expat” mortgage.
To apply for either, you’ll need a substantial deposit (ideally held in a UK bank account) and evidence of the deposit’s source. You’ll also need proof of residency (for the past three years) and proof of income for a residential mortgage. For a buy-to-let mortgage, borrowers will be assessed on their expected rental income.
You should also take the repayment currency into account. MCD means that lenders must monitor exchange rates to ensure foreign currency loans remain affordable for the borrower. Some specialist lenders also have an “approved currency” list.
The fall in sterling means that it’s currently cheaper for international buyers to buy property in the UK. Expats looking to invest in the UK have to save less for a deposit because they’re getting more Sterling for their foreign currency. Plus, as the mortgage repayments will be made in Sterling, they work out cheaper too when they revert back to their earning currency.
Expats seeking to buy a rental property will find that they can take advantage of specific mortgage products. They can also join HMRC’s non-resident landlord which exempts them from UK income tax. In addition, having a buy-to-let property is a great way of maintaining a UK credit rating. This means securing UK borrowing in the future will be easier.