How To Get A Mortgage On A UK Property If You Live In Australia

08-February-2024 11:39
in International
by Jennifer Stevenson
How to get a mortgage on a UK property if you live in Australia

Getting a UK mortgage can be challenging if you live in Australia. Australian residents will face scrutiny when applying for an international mortgage in the UK- but there are ways to make the process smoother.

This article explores the options available to you as an Australian resident and the best ways to access mortgage finance for purchasing or remortgaging UK property.

And don't forget to check out our complete guide on UK mortgages for expats.

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In this guide

Can You Buy a House in the UK if You Live in Australia?

What is a Specialist Mortgage Lender?

Bridging Finance: The answer to Short-term Funding Needs?

Can I Get a UK BTL Mortgage if I Live Abroad?

How to Get a UK BTL Mortgage From Australia

How We Can Help

Can You Buy a House in the UK if You Live in Australia?

Yes, it is possible to buy property in the UK if you live in Australia. There are surprisingly few legal restrictions on buying British property from abroad, but it can be difficult to attain property finance if you are living overseas. This goes for UK expats and foreign nationals - the international mortgage process can be more complex than for standard mortgage cases.

But there are options out there. Working with a specialist mortgage broker can make the process easier and take care of a significant portion of the paperwork. 

Save Time by Avoiding Traditional Lenders

Any property transaction can be time-sensitive: delays are costly, and wasting time with certain lenders can result in potentially losing out on an attractive opportunity.

Typically, when looking at options for mortgage finance, people look to traditional lenders to access the finance they need. However, traditional UK lenders are generally not geared up to deal with Australian nationals or British expats and their unique requirements.

Traditional lenders do not have a flexible application process capable of dealing with complex income streams or foreign currency requirements. For example, if you're earning in Australian Dollars (AUD), this can create an issue with your mortgage application. 

For expats, even something small like a proof of address can be difficult for people living outside of the country. Many people who live and work abroad have their utility bills paid for by their company and don't have any credit cards or bank accounts linked to their address abroad.

This is why an application to a traditional lender for a customer based abroad can take months. Anyone who is trying to purchase a property overseas knows just how costly a delay of several months can be.

On top of this, traditional lenders will not process a UK mortgage application for a person living in Australia without a traceable credit history. This makes it tricky for British expats living in countries like Australia, where time spent living outside the UK may result in an unclear credit history. 

Traditional lenders may not be able to provide a mortgage that accurately reflects your financial position.

You want to get the best mortgage available and make sure you have finance in place to ensure your property transaction is:

  • Cost-effective
  • Stress-free


What is a Specialist Mortgage Lender?

Specialist lenders have the processes and knowledge in place to work with clients based in Australia who are paid in foreign currency or have complex income streams.

When reviewing an application, specialist lenders can take into consideration your property rental income on top of your salary. Unlike traditional lenders, specialist lenders are more equipped to provide mortgages that fairly reflect an international client’s income.

Specialist lenders typically have a variety of mortgage products that are well-suited for international clients, eg. Where one party lives in the UK and the other lives abroad, or where income is earned in more than one currency.

Bridging Finance: The Answer to Short Term Funding Needs?

If you've found a residential property already, then you are on the clock. You'll need to move quickly in order to secure the property you intend to buy.

If you can't access the finance you need swiftly, you may lose the property to another buyer. Bridging finance could offer an alternative way to source finance when facing a tight deadline, and many of our clients use this method. 

What are Bridging Loans?

Bridging loans are a type of short term loan that provides a temporary financial solution, or a ‘stop gap’, in funding a purchase until a mortgage can be put in place.

This type of finance may be suitable if you already have existing property assets in the UK, as you can secure a bridging loan against them to secure your new property.

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Can I get a Buy to Let Mortgage in the UK if I Live Abroad?

As it becomes increasingly difficult for first-time buyers to get on the housing ladder, there is a growing demand for rented accommodation. 

If you are living in Australia and looking for your own UK buy-to-let property, you should consider the recent changes to the UK buy-to-let property market.

Related: How to get a UK expat buy to let mortgage

Increase Your Chances of Securing a Buy to Let Mortgage

There are only a limited number of traditional lenders prepared to provide mortgages to British expats who live in Australia. If you find a traditional lender who does provide buy to let mortgages for British expats then they will focus on the following:

The Income Stress Test...

Traditional lenders have introduced a strict income stress test that reviews your income and identifies whether you can afford your mortgage repayments.

Interest rates of 5.5% might seem unnecessarily high, but with interest rates almost guaranteed to rise soon in the UK, it's possible that banks have to factor in. 

Related: NEWS: Rates To Rise – Time To Cash In With A Longer Fixed-rate Mortgage?

Here’s the problem. . .

As stated above, traditional lenders do not have the expertise to deal with foreign currency and complex income streams.

This means that British expats often struggle to satisfy the income stress test, as traditional lenders do not take their full income into account when checking if expats can afford mortgage payments.

Rental Coverage Ratio

Traditional lenders typically require a rental coverage ratio of up to 145% for standard buy to lets and up to 170% for houses in multiple occupations.

The reason for the rise in the rental coverage ratio is to provide a safety net for when landlords’ properties are without tenants.

Review Your Property Portfolio

  1. Traditional lenders will review property portfolios to ensure all properties are profitable.

  2. If the lender finds one property that does not provide a positive return, then your application will be unsuccessful.

  3. This may make it particularly difficult for you if you have several buy to let properties.

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How to Get a UK BTL Mortgage from Australia

Compared to traditional lenders' rigid buy to let mortgage criteria, specialist lenders’ application process is more flexible, and every applicant is viewed in light of their specific circumstances.

  • Flexibility is key. . .

In most cases, British expats require a deposit of 25% of the value of the property to secure a buy to let mortgage.  With traditional lenders, the need for a 25% deposit is more or less set in stone.

However, some specialist lenders are prepared to consider applications with a lower deposit. Depending on the client's background, some lenders we work with go up to 85% LTV.

Specialist lenders are also more equipped to deal with British expats and foreign nationals; they are more likely to be able to provide a buy to let mortgage that fairly reflects your financial position.

This is because specialist lenders have the expertise to take into account factors such as salary paid in a foreign currency and complex income (including dividends or capital sales from stocks and shares). 

Specialist lenders are also likely to consider expats’ other income as well as their property’s rental income when calculating affordability.

The details of a specialist lender British expat buy to let mortgage can be sorted efficiently by a good specialist property finance broker to ensure that the terms suit your specific needs.

Need Help Securing UK Mortgage Finance?

If you are a British expat or Australian national and you want to purchase a property in the UK, whether for residential or buy to let purposes, you may want to seek the advice of a professional broker to obtain the mortgage from a specialist lender.

As a specialist property finance broker, our extensive links with private banks and specialist lenders can source the financial solution that caters for your needs.

Through our relationships with specialist lenders, we find the best mortgages available to British expats living abroad, including in Australia.

Not only do we have a wealth of experience in providing mortgages for British expats, but we can also arrange market-leading mortgages for Australian citizens looking to buy or remortgage UK property for investment purposes.

To see what we can do for you, call us at 0117 332 5019 or book a free consultation below.

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