The UK property market, especially in London, continues to prove an extremely attractive prospect for foreign investment, which has in turn led to a greater number of overseas clients looking to secure a mortgage in the UK. However, a client’s potential to secure a mortgage from outside the UK will depend on a number of factors that do not usually apply to someone living and working onshore.
When it comes to UK expats, lenders will look for a UK credit footprint. This requirement could vary from a UK mortgage currently held, to one held within the last few years, or perhaps several outstanding. Essentially, the greater a client’s presence in the UK, the more comfortable a lender is likely to feel. However, foreign nationals may not have a UK footprint, especially if they’re only just entering the market. This limits the number of lenders they have access to but it is still possible to find a lender. Criteria and requirements are likely to be more stringent, so a good broker with multiple contacts in this area of lending is vital.
Country of residence is another obstacle to expect for lending. This is generally more of an issue for foreign nationals – if a lender simply will not lend in that country, it’s a no-go from the beginning. However, as with any mortgage, lending availability is based on risk, so the risk of a borrower living overseas will be reflected in the margins required for a lender to take on the deal. This often results in an increased minimum loan size and restrictions to the loan to value.
Of course, offshore lenders will have branches overseas, which means the availability to lend may come down to whether the lender has a presence in the client’s location. A number of banks Enness work with are comfortable taking on this type of loan, as long as they can see the client and their documents first-hand. We believe with any transaction, it’s best to interact in person anyway.
For a foreign national in particular, communicating and providing documentation to a lender can prove difficult. If you’re employed overseas, for example, the majority of lenders require payslips translated into English. Very few will accept otherwise unless they have an overseas branch to translate or if the lender is predominantly based abroad. Equally, if you’re a self-employed non-UK resident, you may face problems with providing accounts in English and by an internationally recognised firm from a specified list. Despite this, a recent client of ours had their documents in Mandarin, which were accepted by the Bank of China branch based in the UK.