Almost five million British citizens live or work outside the UK – some temporarily and some permanently – and many of them want to own property in their home country. It can seem difficult to get a mortgage in the UK if you are a British expatriate, but it’s certainly not impossible.

Many expats are looking to invest in buy to let property whilst living abroad, sometimes as a way to generate a passive income in retirement and sometimes to provide the security of a home for their return to the UK. Or individuals working abroad may buy UK properties for their families to live in, often where children are being schooled in the UK education system.

Expats can earn higher salaries and enjoy lower costs of living abroad than they would do in the UK, sometimes with all accommodation costs covered by their employer. So they may well have more disposable income than they would if they were living in the UK.

Whilst regulatory changes introduced in 2014 have made mortgage borrowing more difficult for anyone paid in a foreign currency, specialist mortgage lenders have experienced underwriters who are used to looking at expat applications. Exchange rate fluctuations must be taken into account (along with other financial stresses) and the borrower’s global financial position needs to be assessed in detail before a loan is granted.

Here are some of the key criteria to look for when you are sourcing an expat BTL mortgage for one of your clients:

  • British Citizens living or working in over 180 FATF member countries or Confederations (including Australia, USA and Canada), excluding high risk countries (fatf-gafi.org/countries/#FATF)
  • Up to 75% LTV applies with the exception of Australia (70% LTV)
  • Non-EEA landlords require a minimum property value of £150,000
  • Spouses who are non-British Citizens can be party to the mortgage
  • Applications considered for SPVs registered in England, Wales or Scotland where one or more directors or shareholders is resident overseas as an expat
  • Currently own a UK property and have 3 or more active credit records per application
  • Payments must be made from a UK bank account in sterling
  • First Time Landlords, HMO/MUBs accepted
  • No minimum income, loan sizes up to £1,000,000

If you have a customer who is currently living abroad or planning to make the move, please feel free to have a chat with us here at Vida; we would welcome the conversation.

BTL expat customer – typical example

After working for the RAF, Alex successfully applied for a 3-year contract to work in Saudi Arabia. He and his family moved to a rented property in Riyadh, but also wanted to own a British property to provide a home when they returned to the UK. Alex decided to purchase a property on a buy to let basis with his brother Chris (a UK resident) and together they set up a Special Purpose Vehicle (SPV) of which both were directors. They had a 25% deposit available. Initially Alex and Chris struggled to get a buy to let mortgage as lenders generally insist that all SPV directors have to live in the UK and only a limited number lend up to 75% LTV. However Alex and Chris‘s broker recommended Vida because it will allow at least one expat director of a registered SPV, providing other directors are based in the UK. Vida will also lend up to 75% LTV.