Can a British Expat Get a Mortgage in the UK?

The good news is yes! The not so good news is that it can be a more complicated process. That said, the benefits of retaining property in the UK whilst working abroad can be significant. Especially if you expect to return at some time in the future.

The first thing to consider is your tax status. If you live abroad for six months or more per year, and rent out a property, you'll likely be classed as a "non-resident landlord" by HMRC, even if you're a UK resident for tax purposes. And wherever your income is taxed, you'll be required to pay tax on the rent you receive.

The next thing is the type of mortgage you’ll need. Lenders may consider a standard domestic loan when you can illustrate that a close family member lives in the premises whilst you’re away, but most lenders will require you to take a ‘Expat Mortgage’ loan which is designed for non-resident borrowers who are letting out their home.

This type of mortgage usually has different criteria and the ‘rent cover’ will be an important factor. In other words, the amount of rent you receive will be very pertinent to the amount of money you can borrow.You are also likely to have to put down a larger deposit, perhaps 25% or more.

The European Mortgage Credit Directive, introduced in 2016, requires that individuals paid in a foreign currency come under closer scrutiny when their loan applications are assessed. The underwriting process needs to take account of possible exchange-rate fluctuations, as well as looking at a borrower's overall financial position. Furthermore, satisfying the various checks required by lenders can become a cumbersome process.

Getting a correctly certified passport can be difficult if the borrower lives in an area without access to international lawyers, accountants or diplomats. In many cases large employers are not set up for the additional needs of an Expat’s loan application and the self-employed will have a very difficult time of it unless they have verifiable income that can be evidenced by a major international accountancy firm.

It’s also worth noting that lenders active in the UK market will have a list of "restricted" countries where they won't lend. This might include countries subject to sanction or where corruption or weak regulatory practices exist. Many African nations and some in Eastern Europe meet this category.

We offer a tailored, personal service to clients living abroad and work hard to understand clients present and future needs. Being totally independent we can offer products from the UK and international mortgage markets.

For more information please contact us on 01628 507477 or click here to book a free phone or video appointment.