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Expats struggle to buy property back in Britain

14th November 2011

House-hunting expats looking for a mortgage with a British lender will now find their options severely restricted

Expats are finding it increasingly difficult to find a mortgage provider in Britain 

By Justin Harper

Expats are just one group of victims affected by the tighter lending rules being applied by banks and building societies in Britain. But with a smaller choice of expat mortgages to start with, anyone working or living abroad will now find it much harder to get property funding.

For example, Woolwichnow only offers buy-to-let mortgages to those expats that are existing Woolwich buy-to-let customers. The Mortgage Works, Nationwide’s specialist arm, was at one time able to consider expats but will now only lend to investors that are UK residents.

Simon Conn, an overseas property and finance specialist, said: “Raising finance in the UK for British expats purchasing or re-mortgaging either a residential, buy-to-let or commercial property, has become more difficult, as lenders are more interested in the personal financial status of clients and how they intend the loan to be repaid, rather than looking at the asset.”

He added: “This is partly because of the economic climate, but also as they have a number of defaulted properties on their books already, they need to be re-assured that any new client they take on will not leave them with additional problems.”

Another issue is money laundering rules which are being enforced more strongly, especially if you don’t have an existing UK bank account or credit history. For those who are offered deals, particularly on sums below £100,00, interest rates and setting-up costs can be higher.

For those still hoping to apply to a UK provider David Hollingworth, a spokesman for mortgage brokerLondon & Country, said: “It is important to present as good a case as possible. The lender's concerns will be based around ensuring that they are not taking too significant a risk, so being able to show a track record and history would be helpful. Working for a multinational company for example would help and having some links to the UK could assist. That might be through a UK bank account and owning property in the UK for example.”

Some private banks might be happy to offer you a home loan if there is the possibility of securing other banking business and if you are a high net worth individual. These are both likely to be agreed on a bespoke basis rather than a lender offering a specific expat mortgage.

Source:  Telegraph 14/11/11