Living In Dubai? 4 Ways to get a UK Expat Mortgage
If you're a British national looking to get a UK expat mortgage from Dubai, you may be wondering what's available for you.
There are a variety of reasons you may want to purchase a property back home. It might be an investment, or you may be planning on returning to the UK. But you've probably realised that securing a mortgage on a UK property isn't always a straightforward process, especially if you're living overseas.
You may find that living and working outside the UK has impacted your lending options, even if you receive a generous salary. Many high street lenders don't work with expats because they are unfamiliar with the processes associated with international mortgages. But there are options available.
In this guide:
Can I get a UK expat mortgage from Dubai?
Yes, it is very much possible to get a UK mortgage while you're living and working in Dubai as an expat.
As previously mentioned, it may narrow down your lending options purely because this type of mortgage application is more complex than it would be for a British resident. However, specialist lenders are familiar with these intricacies, and in many cases, they can get a more accurate view of your finances, too.
There are a few ways to secure property finance in the UK while you're living overseas. This guide will tell you everything you need to know about getting a British expat mortgage from Dubai and how to keep costs down while you do it.
Note: Have you invested in a Personal Portfolio Bond while overseas? If yes – you need to know this crucial tax information.
What do the experts say?
Head of International CeMAP CeRER
Our mortgage brokers at Clifton Private Finance are specialists in securing Skilled Worker Visa mortgages. We can scour the market for the best deals for your situation and present you with your options.
4 Ways a British Expat Can Get a UK Mortgage
Buying a residential property as a British expat
It's likely that buying a residential property in the UK will be the easiest way to get a mortgage while you're living abroad. If you're a British expat buying a home in the UK, your mortgage is likely to mainly be based on your earnings and financial circumstances, making it more straightforward than other mortgage types (buy to let mortgages, for example).
The legislation surrounding buy to lets in the UK is also getting stricter, which has been impacting overseas buyers. So, if you're buying a property in the UK with no intention of renting it out, you'll bypass this legislation and likely get a better mortgage deal because of it.
On top of this, there are a few reasons you might want to buy a residential property in the UK if you're an expat living and working abroad:
- You may find yourself in a good position to invest in your future home while you're living in Dubai and want to make the jump.
- If you're aiming to stay in Dubai long-term, you may want a residential property to return to when you visit the UK
- You might want to make sure you have a home secured for when you decide to move back to the UK.
Whatever the reason, if you're not looking to rent the property out and you need to get finance to secure it, you'll probably be looking for a residential mortgage.
It's important to note that a lot of mortgage lenders only take into account one source of income. If you have income through more than one means (such as bonuses, dividends or a second job), working with a specialist broker may be able to help you establish your full income in your mortgage application.
With access to niche lenders, we can negotiate the best possible arrangement for you.
In addition, for clients earning over 1.5m dirhams (£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.
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 remortgage.
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).
Buying a UK property as an investment
The UK is an overseas investment hotspot due to its high rental value and ROI. Buy-to-let properties can be a lucrative opportunity for investors seeking long-term capital growth and steady rental income.
If you're thinking of returning to the UK at some point, you may want to rent out your property until you move back and then convert your buy to let to a residential mortgage to live in.
For expat investors looking for a UK mortgage, you might need finance for:
- A straightforward buy-to-let property with a single tenancy
- 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 demonstrate a rental coverage ratio of 145% for standard buy-to-lets and up to 170% for HMOs.
Developing on UK land
Our 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 quickly.
It’s true that investment in UK land can earn impressive returns over time.
- Some of our clients can see the potential in land and want to build a property from scratch
- 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 bridging finance solutions for both straightforward and complex development projects, starting from £100,000 for terms of up to 24 months.
Challenges Obtaining a UK Expat Mortgage While Living in Dubai
Your credit rating isn't international
The global banking system is less global than we might hope for when it comes to credit rating systems.
- One of the first things a mortgage lender will want to look at is your credit history.
- 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.
Proving your place of residence
Your ability to verify your personal details is a massive crux of your mortgage application. The Financial Action Task Force (FTAF) is an international body that forms policies dedicated to combatting money laundering and funding terrorism.
High-street banks and building societies generally don’t lend to residents of countries that aren’t signatories to the FATF, which can complicate things for those looking to get an international mortgage from those countries.
Providing supporting documentation/proof of income
If you're a resident in the UK and applying for a mortgage, lenders will ask for proof of address and evidence of income, and many of the application details can be supplied online.
- 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 an experienced specialist broker can work through your paperwork and may be able to speed up your application.
Your salary is paid in dirham
It's likely that your salary in Dubai will be paid in dirham, the official currency of UAE. In the past, it was more common for expat workers to be paid in pound sterling, but this is no longer as frequent.
If your income is 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 continues to do so, post-Brexit, for expatriates wanting to invest in the UK.
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.
Overall, this sounds like positive news 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.
Read more details about the MCD »
Working with a specialist mortgage broker like Clifton Private Finance can make the process smoother. as a specialist mortgage broker, we can use our knowledge of the market and relationships with private lenders to help secure you the best deal for your circumstances.
How to get a UK expat mortgage from Dubai
Before you start your application, there are steps that you can take that can be advantageous in your expat mortgage application.
Work on your credit rating
Your credit rating is an essential part of your mortgage eligibility. While getting an expat mortgage with bad credit is still doable, depending on your circumstances, you'll have a much better chance of being accepted if your credit rating is good, and it's likely you'll have access to better mortgage rates.
- If you still have a British bank account, make sure to keep it open and active so that you have a credit footprint in the UK. If possible, pay direct debits using your British account, as this can help bolster your UK credit rating.
- Additionally, you can stay on the electoral roll by registering as an overseas voter. You can continue to do this for up to 15 years after you move abroad, and you can register at a UK address (such as your parents' address) to maintain a UK address.
- If you have a valid reason for any missed payments or CCJs, you can apply for a 'note of correction' to be applied to your credit report.
Clean up your expenses
The main reason lenders put so much emphasis on factors like employment and credit rating is that they are trying to determine whether you'll be capable of keeping up with your mortgage payments in the long term.
With this in mind, it would certainly pay to go through your bank statements and make sure you are living within your means and in a good financial position to apply for a mortgage. In the months leading up to your application, it's important to stay out of your overdraft and pay off any credit card debt you may have.
As well as this, it can really help to be in secure employment for over a year before you apply for an expat mortgage. Lenders like to see that your work circumstances are unlikely to change. They see stable employment history as an indicator that you will likely be capable of keeping up with your loan repayments over time
Working with a specialist broker can significantly improve your chances of getting an expat mortgage. Expat mortgage brokers can use their extensive network and industry knowledge to make sure your application is shown in the best possible light.
How does Clifton Private Finance 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. It’s frustrating when you find that traditional high street lenders are constrained by rigid lending criteria when you have the means to purchase a property.
- 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 you're busy and may 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.
To see what we can do for you, give us a call at 0117 332 5563 or book a free consultation below.