At Enness, we work with many foreign national clients who wish to purchase property in the UK, many of whom are Middle Eastern business owners.
In 2015, a CBRE report suggested the UK would receive $85billion dollars of investment from the Gulf over the next decade. Although Brexit and other economic factors may have influenced investment strategies, Europe and the UK specifically is still considered a desirable spot to invest both commercially and residentially. The weakened Pound also represents an opportunity for Middle Eastern business owners as they are currently enjoying favourable exchange rates.
Another survey showed 11% of Middle Eastern investors listed the UK as their top preferred investment location; for context, New York came in second place with 5% of the vote.
What draws Middle Eastern business owners to the UK?
There are always many lifestyle factors which draw Middle Eastern investors to the UK. Many global businesspeople are keen to have a base in the UK—but they’re also keen to enjoy the rich culture of arts and history available in the UK.
Many children of successful Middle Eastern business owners are keen to explore life in London and beyond. The UK boasts many world-leading universities; these centres of learning are extremely welcoming of global students, meaning many children of Middle Eastern business owners flock to the UK to study. For parents concerned about their children travelling across the globe to study, a UK property purchase is an ideal way to look after their children’s interests and make a savvy investment.
What are the problems for Middle Eastern business owners when securing finance?
Middle Eastern business owners struggle to secure finance as businesses in the region are run in a different manner to UK businesses, and some banks can find the way they operate confusing. As a consequence, they shy away from lending to clients whose income stream originates from a Middle Eastern business. Additionally, the finance application process can be complicated for foreign national clients in general, as they are unlikely to have the standard documents asked for by British lenders.
Fortunately, we have excellent relationships with a range of lenders from across the market. Not being tied to a panel of lenders enables us to overcome these challenges; we work with over 250 international lenders, with global banking capabilities, who can take a more flexible approach to lending to these clients.
For example, I recently assisted a Saudi business owner to purchase a property in prime central London for his daughters to live in while they attended university in the UK.
My client had purchased a new build property for £6.5million, and the developer had offered him a discount if he could complete the purchase within a month. The client wanted an interest only mortgage, at 65% loan to value (LTV).
This was a challenge since many lenders aren’t comfortable with the income structure from Middle Eastern businesses, but I knew of a bank who had a Middle Eastern desk, and understood the way businesses work in the region.
I was able to secure my client a higher LTV than he was hoping for, enabling him to cover the necessary stamp duty charge. For more details, you can read the full account of this case here.
This is an example of how Enness can help clients with the most complex of circumstances, particularly foreign nationals whose income is deemed ‘unconventional’. Our relationships, and global network of lenders, are what enables us to succeed where other brokers fail.