Living In Dubai? 4 Ways A British Expat Can Get A UK Mortgage

30-April-2020 23:22
in International
by Jennifer Stevenson

A generous expat salary: tax-free. British banks should be falling over themselves to offer you a mortgage on a UK property. But getting an expat mortgage on property in the UK isn’t always straightforward, and there can be additional problems when you’re an expat living and working in the UAE or looking to return to the UK in the short term.

The obstacles to overcome when applying for a mortgage from the UAE / Dubai

1 Credit ratings aren’t international

The global banking system is less global than we might hope when it comes credit rating systems: 

  • A British credit card languishing in a drawer, and lack of credit footprint activity in the UK, will rate you downwards on automated credit rating algorithms that don't take your high foreign earnings into account.


2 Your place of residence

High-street banks and building societies generally don’t lend to residents of countries that aren’t signatories to the Financial Action Task Force (FATF), set up to counter international money-laundering and the funding of terrorism.

  • Dubai and the rest of the UAE are not currently part of FATF - which closes off many high-street banks and building societies to you as a source of finance.

There are specialist lenders we can introduce you to, who are not available to walk-up applicants. They're able to work more flexibly and will understand your individual circumstances.  

3 Providing supporting documentation / proof of income

If you're resident in the UK and applying for a mortgage, lenders will ask for proof of your address and evidence of your income, and many of the application details can be supplied online. So far, so simple. 

  • But for expat applicants original, signed documents ("wet signatures") are required for: 
    • the application form
    • the direct debit for your mortgage payments
  • You may not have utility bills in your name, relating to your residential address (for example if they're paid as part of your salary package)
  • You probably use a PO Box for mail deliveries

A reference letter from your employer can confirm your residential address. These issues are no great drama to work around, but if an experienced broker isn't handling your application, each of these delays in supplying documentation in the correct format can add another week to your application. 

4 Your salary is paid in dirham

Gone are the days of expatriate packages in Dubai with sterling-currency salaries (along with fully paid-for accommodation and annual first-class flights home).

If, as is most likely, your salary in Dubai is paid in dirham, your access to mortgage funding in the UK will be subject to the European Commission’s 2014 Mortgage Credit Directive (MCD).

The directive set out the rules governing the granting of foreign currency mortgages and it made things a little more difficult for expats – and will continue to do so post-Brexit for expatriates wanting to the invest in the UK, until alternative regulations are put in place.

Two key requirements of the directive are: 

  • The borrower has the right to convert their mortgage into a different currency at any point.
  • A cap on exchange rate fluctuations protects borrowers from dramatic changes in the exchange rate. 

These sound like very positive changes for borrowers. But the result has been that many lenders now feel they’re shouldering all the risks of currency fluctuations, without enough reward for the additional dangers. Fewer lenders in the market has reduced the pressure to keep expat interest rates competitive. 

Read more details about the MCD »

Here are the 4 ways we can help British expats in Dubai to get UK mortgages

1 Buying a UK property to live in

If you’re planning to return to live in the UK, you'll probably be looking for a residential mortgage.

  • We can help you work around the various obstacles, taking into account your foreign currency salary and bonuses, plus any income from other sources, for sums of up to 80% of the property’s value.
  • We will negotiate with our lender contacts for the best possible arrangement for you, for a capital repayment or interest-only mortgage, at very competitive rates despite the more limited range of options available. 

In addition, for clients earning over 1.5m dirham (£300,000) a year, or who have a net worth of over £3,000,000, we can source advantageous bespoke solutions that reflect your account value.

2 Refinancing UK properties you already own

  • If you already own a home in the UK, and possibly buy-to-let properties as well, your existing mortgage(s) may have come to the end of a fixed-rate term and be reverting to your lender's significantly higher Standard Variable Rate.
  • Or you may have been using your tax-free Dubai salary to make additional payments to reduce the capital sum of your mortgages. That, combined with the increase in property value, will mean that there’s equity available which could significantly reduce your monthly repayments if you remortgaged. current mortgage costs.

We offer an independent residential refinancing service to expatriates for properties worth £150,000 or more, with terms lasting between 3 and 30 years.

The service is tailored to your specific requirements, and takes into account your investment portfolio, other properties you own, and your pension funds, to give you access to flexible lending criteria and the best interest rates. We can arrange this for both residential and buy-to-let mortgages.

The refinancing can be available to you either in sterling or dirhams – or other currencies (you can change currency when it benefits you).

3 Buying a UK property as an investment

For expat investors looking to the UK you might be needing finance for:

  • A straightforward buy-to-let property with a single tenant
  • Or a mortgage for a House of Multiple Occupancy (HMO) with its more stringent regulatory requirements but potentially much higher returns

New regulations introduced in 2017 by the Prudential Regulatory Authority set higher requirements for potential landlord-investors. Traditional high-street lenders will now require that landlords can demonstrate a rental coverage ratio of 145% for standard buy-to-lets, and up to 170% for HMOs.

The application process can be tedious and time-consuming if you tackle it yourself, but Clifton Private Finance can access lenders who will take a broader, more business-oriented view of these investments, usually at a more advantageous rate for you, and with more favourable terms.


4 Finding development finance to buy land in the UK for development, or property for redevelopment

Investment-oriented expatriate clients often see development opportunities when they return to the UK on a visit, and want to find finance to be able to act on them.

It’s true that investment in land in the crowded UK can earn impressive returns over time.

  • The greatest rewards– and risks – attach to land bought speculatively on the expectation of planning permission for development being granted in the future.
  • Or our clients also see good returns in renovating or improving houses or flats.

Through our extensive network of specialist lenders, Clifton Private Finance can offer finance solutions for both straightforward and complex development projects, starting from £100,000 for terms of up to 24 months.

Your expatriate status won’t affect your access to funding, and you can oversee the progress of the project from Dubai.

How Clifton Private Finance can access the expat finance you need

There’s no doubt that arranging UK finance as a Dubai resident is more complicated, in the new regulatory climate. You might expect that lenders would roll out the red carpet for your high tax-free income, and it’s discouraging to find that traditional high-street lenders are constrained by their rigid lender criteria. 

We work closely with a range of specialist UK lenders who are experienced in funding British expatriates based in Dubai and elsewhere, and who will take into account your various income streams, investments, and issues relating to currency conversions when making their offers.

We do offer mortgage services for lower-priced properties, but we are also able to service very large mortgage options, and complex financial affairs.

We know that busy expats usually need to move quickly: we can often obtain pre-approval terms within 24 hours so that you don’t miss out on any potential opportunities.

Give us a call

Contact us whenever it suits you to arrange a convenient time for an in-depth first discussion with one of our experienced expat finance brokers:

+44 203 900 4322

Read more about our international finance service »

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