How To Get A UK Expat Buy To Let Mortgage

16-December-2021 17:00
in International
by Jennifer Stevenson
Expat buy to let mortgages in the UK, Clifton Private Finance

If you're a UK national living in another country, you may be trying to figure out how to finance a property back home. You'll either be looking to keep a house you already own or buy a new property - with a view to benefitting from a valuable slice of the UK property market and having somewhere to live if you return in the future.

But how easy is it to get a buy to let mortgage as a UK expat? 

It's true that if you're living and working abroad, many UK mortgage lenders are wary, so there are several things you need to know in order to avoid too much stress and get yourself the best deal.

While you're here, don't forget to check out our complete guide to UK expat mortgages. 

Free telephone consultation with an expert mortgage advisor, expat buy to let mortgages, Clifton Private Finance

Everything you need to know about UK buy to let mortgages for expats

Can I buy a UK property on a buy to let mortgage as an expat already living overseas?
How do I switch a residential mortgage on a property I already own to a buy to let?
Do expats have to pay higher buy to let mortgage rates?
What is the deposit requirement on a UK expat buy to let mortgage?
Important considerations when applying for a UK expat buy to let mortgage
How to improve your chances of getting a UK expat buy to let mortgage 
Next steps

Can I buy a UK property on a buy to let mortgage as an expat already living overseas?

Renting out a property in the UK is a popular investment decision for many British expats. If you're already living abroad, you'll be looking to finance your property purchase on a buy to let basis from the get-go; this may include renting out to private tenants and students, as a holiday home or for commercial use.

The process of applying for a buy to let mortgage as an expat is more complex than if you were a UK resident. This is because mortgage lenders can find it more difficult to verify your income, credit history, and affordability status.

Related: NEWS: The Fastest Growing Property Price Locations in the UK

Switching a residential mortgage to a buy to let mortgage

If you're moving abroad for any length of time, the obvious challenge can be what to do with your UK property. It may seem easier to sell, but there are many reasons why holding onto your property is a good idea.

Things might not work out overseas, you may need a place to stay when you come home for visits, and then there's the obvious value of holding onto your UK property investment. You can keep a foot on the property ladder, generate extra rental income and guard your financial ties with the UK which will protect your UK credit profile. 

Becoming a landlord while you're abroad doesn't need to be a painful process. You will need to switch your current residential mortgage to a buy-to-let mortgage, but with an expat mortgage advisor by your side, you can get the right finance in place to make your UK home a profitable asset while you're away.

Expat buy to let mortgages, specialist expat mortgage brokers, Clifton Private Finance

Do expats have to pay higher buy to let mortgage rates?

A UK buy to let mortgage is more expensive than a residential mortgage, even if you are a permanent UK resident.

Lenders consider buy to let mortgages to be higher risk as borrowers rely on rental income to cover the mortgage repayments. This alone can present an obstacle for anyone applying for buy to let finance, but if you live abroad, lenders are typically even more cautious!

To offset the risk, lenders will usually charge higher fees and rates. To what extent will depend on the strength of your application. 

Read our guide on protecting your UK credit score here

What is the deposit requirement on a UK expat buy to let mortgage?

The size of deposit you can afford to put down will have a significant impact on the cost of your buy to let mortgage. The minimum deposit most lenders will require is 20% loan to value (LTV). 

But one way to secure the best mortgage rates is to put down a larger deposit. If you have the funds to go to around 40%, you can expect to pay lower rates.

It's possible though to unlock some very attractive deals, by seeking the guidance and expertise of an experienced mortgage advisor who has access to lenders who specialise in expat mortgages. 

UK expat buy to let mortgage at domestic rates, a casy study, Clifton Private finance

Important considerations when applying for a UK expat buy to let mortgage

Your application for an expat buy to let mortgage will be more successful if the lender can verify some key information about you. The process can be a little bureaucratic, but a mortgage advisor who knows the expat lender market well will be able to guide you through this process and help you get everything in order.

Complex and foreign currency income

If you or your partner are earning in a foreign currency such as the US dollar, Euro, Yen or Dirham, rather than the British Pound, this could present a serious obstacle for many lenders. It's important to flag this from the outset and seek advice from a broker who will know the right lenders to approach in the first place.

Again, in terms of income structure, lenders can be unduly cautious of income from stocks and bonds, investment funds, overseas property and other investment vehicles. Of course, you'll want to utilise all your income sources to find the best mortgage deal possible, so it's best to go through a mortgage broker if you think this applies to you.

The country you live in

Although there are lenders offering buy to let mortgages to British expats, a large number will not lend to expats resident in specific countries.

For example, some won't lend to applicants living in countries considered to be 'higher risk', such as Kenya, Rwanda and South Africa, or any of the countries considered to be non-compliant with the FATF anti-money-laundering international task force, such as Bahrain, Bulgaria, Hungary or Seychelles. 

In addition, traditional lenders can't accept applications from expats living in Australia, as there's an intergovernmental treaty between Britain and Australia that prohibits lending to each other’s residents.

That doesn't mean that if you live in Bulgaria or Australia, you can't access UK property finance. But you will need a good broker to help you. 

case study: expat buy to let mortgage for singapore expats, Clifton Private Finance

How to improve your chances of getting a UK expat buy to let mortgage

Getting the most competitive buy to let mortgage deal will generate the best return on your investment, and the most certain way to achieve this is by going through a dedicated expat mortgage broker.

  • A specialist broker working on your behalf will listen to what you need and get to grips with the details of your financial circumstances. They will then package your application so that it meets the requirements of specialist expat lenders, and will take it to the lender who will consider your circumstances most favourably.
  • By going through a broker, any complex or foreign currency income can be presented to lenders who will be more flexible and give you a mortgage offer that accurately reflects your affordability.
  • The process should be faster, and less arduous for you - and, more significantly - should result in a cheaper finance offer.

Contact Clifton Private Finance

Contact us to arrange an in-depth conversation with one of our specialist expat mortgage brokers. There's no charge, and no obligation, but we'll be able to tell you what we can arrange for you:

0117 959 5094

Or book a FREE telephone consultation at a time that suits you 

Book Consultation

Client testimony: successful expat buy to let mortgage application, Clifton Private Finance