UK mortgage for foreign national buying rental property in England

Area
Leicestershire
Capital Raised
£280K

Foreign buyers can be caught in trap when trying to buy property in the UK: you need to have an established financial history here (a bank account, credit card, and utility bills in your name) to get finance from a UK lender. But how can you build up that history before you live here?

Many UK lenders require larger deposits from borrowers who are not UK citizens, as well as charging higher rates and fees. But there are alternatives.

The Scenario

Our client rang from Vietnam: she’s a Malaysian national working there, who was going to be moving to the UK with her fiancé. She planned to buy a property in Leicestershire and rent it out for a year or so before either remortgaging as their own home, or selling it.

The issues: UK lenders are reluctant to offer finance to foreign nationals who don’t have a solid financial footprint in the UK. Our client had a bank account and credit card, but no utility bills establishing her residential ties.

Plus we needed to make the affordability work. For a foreign national applying for a buy to let mortgage, most UK lenders would be looking at a 60-65% LTV. Our client had 25% of the purchase price to put down. And the rental returns on properties in the area weren’t looking too generous.

In addition, her intention to switch the property from a foreign national BTL mortgage once she was financially established here put her in the frame for punitive early cancellation charges. As well as another valuation and more solicitors’ fees.

The Solution

A shariah-compliant ijara mortgage from a well-established UK shariah bank offered a way round all of the problems. Our client wasn’t necessarily looking for shariah finance, but this product suited her needs.

The lenders were happy to consider foreign nationals, and would accept a 75% LTV. In addition they would top-slice the affordability, and allow her to make up a small projected shortfall in rental earnings from her income.

And as a shariah lender they would not charge an early exit penalty. Their 1.5% up-front product fee is substantial, but in line with most expat lenders, and their valuation fees often seem to work out cheaper. There’s no option for overpayments, but that wasn’t something our client was looking for – but she could exit early without punitive charges.

Jack Spillane

Finance Broker

Bristol

0117 959 5094

Is your situation similar to this? I specialise in helping clients who need creative development finance solutions, and second-charge mortgages. Give me a call any time and we can set up a detailed discussion of the finance you need.

Mathew Phillips

Finance Broker

Bristol

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

Alex Chambers

Senior Finance Broker

Bristol

0117 403 4324

Are you in a similar situation? I am a specialist in residential and investment property finance for UK and international clients at Clifton Private Finance. Please don't hesitate to get in touch for a no-cost discussion of the finance you need.

Luther Yeates

Senior Finance Broker

Bristol

0117 244 5561

Are you looking for a similar type of property finance? I have extensive experience finding residential and investment property finance for UK and international clients. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

Sam ONeill

Senior Finance Broker

Bristol

0117 959 5094

Is your situation similar? I am a bridging finance specialist at Clifton. I can find a quick, cost-effective solution for the funding you're looking for.

Robert Gibb

Senior Finance Broker

Bristol

0117 959 5094

Are you looking for mortgage or short-term finance for residential or buy-to-let property (including HMOs)? I have extensive experience in finding property finance solutions for UK and international clients, both as individuals and limited companies. Please give me a call and let me see what I can do for you.

Adam Arnott

Associate Director

Bristol

0117 205 0214

Is your situation similar to this? I have extensive experience of advising clients who need creative property finance solutions. Please get in touch and we can arrange a time that suits you for a detailed discussion of your requirements.

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