I'm an expat, can I get a mortgage for property investment in the UK?

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October 2020

I’m an expat, can I buy a property in the UK?

 

The answer on this depends on a few factors; where you are, how you are paid, what you are looking to buy and the entity that you are buying in. Just to be straight, this article is purely from property investors based abroad, not expats looking to buy their main residence in the UK.

 

Read on to find out whether you can successfully secure an expat mortgage whilst living and working overseas.

 

Do I need to use an expat mortgage broker?

 

No to be precise. Like all fields of work there are experts and then there are experts. If you approach a residential mortgage broker who is used to dealing with standard residential cases, then they might not be the best person to advise you on securing an expat mortgage for your investment property, especially if you have bought or intend to buy in a SPV (Special purpose vehicle – limited company set up specifically to hold assets) Often more expensive, a commercial mortgage broker or a specialist expat mortgage broker based in the UK would probably save you £1000’s in the long run. They place cases such as expat mortgages for investment daily, have access to a vast array of lenders and would ultimately place you with the right lender from the outset rather than back and forth on what could already be a long process for an expat.

 

I am a Dubai based expat investor – can I obtain a expat mortgage?

 

It is true that the majority of people based abroad can obtain finance in the UK for UK based assets for investment purposes. There are a small number of countries that do make it hard to lend to. Based on political stance and a couple of other factors, but we can go into that on another article.

 

Dubai based expat property investors are one of the most common investors that Auction Finance work with. There is a very large expat community in Dubai and many property network meetings that expats attend, so a real sense of community when it comes to investing in the UK from Dubai.

 

What do I need to know?

 

Typically, for investment purposes, mortgages for expats are available to SPV’s preferably. Reason being is that the SPV is a UK entity, so the not only the property but the owner of the property is located in the UK. You will need to be aware that although the property and ownership structure is in the UK, the people behind the company are abroad, so naturally that will make the loan more risky for the lender. Order of effect is that the process is slightly longer, more due diligence on the persons and the deposit is done and usually the rate is slightly higher. This is understandable right?

 

You will still need all the same documentation for the application and more due diligence is done on the deposit and the earning power of the directors/shareholders. Documents are often needed to be certified by a notary public opposed to a professional, which can come with added cost. As well as the additional cost incurred at legal stage because of the extra worked covered. The loan process can take longer, therefore I would expect a slightly higher than normal broker fee to process the case for you.

 

It does hugely help if you have a UK footprint, IE have a credit card from a UK bank or a mortgage on a property that you used to live in before flying East.

 

There is often a minimum income requirement for the applicant also, which is set higher than someone based in the UK.

 

In short, for investment purposes there are only a handful of lenders that will lend to an expat for property investment, but don’t let this put you off as achieving financial freedom through property whilst utilising tax savings abroad can really assist when/if you decided to repatriate.

 

Can I go through a high street bank?

 

Lenders such as HSBC and NatWest do offer services for expats but often for business purposes they may not achieve the same LTV (loan to vale) as a challenger bank and could also be similar on the rate if not more expensive. Let a broker search the market for you, [contact us here]

 

Can I obtain bridging finance as an expat?

 

This is something that Auction Finance are asked a lot. The answer is yes, yes you can obtain bridging finance whilst located abroad. As mentioned in other articles, the main concern for the bridging lender is the exit of the loan. So always check with your broker first that you are eligible for an expat mortgage before entering onto a bridging loan.

 

I’m a foreign national living abroad, can I invest in the UK?

 

This is a tough one, it is achievable but along with the above criteria there are truly only a handful of lenders that will lend to you. The type of finance that you could obtain is both bridging AND commercial term mortgages, however, it will be with an alternative lender. The rate maybe loaded also to reflect the risk and the type of loan may differ to a standard SPV loan.

 

If you are thinking of investing in the UK as an expat or you would like guidance before venturing into the world of property investment drop us a message here, Auction Finance would be more than happy to assist you.

 

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Case Studies

See how we have helped people obtain finance for their auction purchases.

10 day bridging finance - auction purchase gone wrong on buy to let mortgage

Loan to value:
75%
Amount Raised:
£535,000
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Development exit bridge with capital raise

Loan to value:
80%
Amount Raised:
£1,200,000
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Japanese Knotweed BRR

Loan to value:
75%
Amount Raised:
£50,000
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5 Day Bridging Finance

Loan to value:
55% LTV
Amount Raised:
£580,000
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