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International buyers routinely rejected for UK mortgages

Overseas investors and British expats are finding it increasingly difficult to secure mortgages in the UK to fund property acquisitions, according to deVere Mortgages.

Based on mortgage enquiries, deVere Mortgages, part of deVere United Kingdom and deVere Group, which offers advice to British expats and foreign nationals looking to buy property in the UK, recently reported that there had been a sharp rise in the number of opportunistic overseas investors taking advantage of effective discounts caused by sterling’s nosedive after the UK voted to the leave the EU by acquiring property in Britain.

Historically, many overseas buyers have targeted London’s wealthiest areas, but various reports suggest that more international buyers are now looking at cheaper areas across the country that offer better value for money homes and higher rental yields.


Mortgage enquiries from overseas buyers and British expats rose 45% in Q4 2016, compared to the previous quarter, according to the mortgage firm. But the company notes that the introduction of new tougher requirements for buy-to-let borrowers in the UK has also made it harder for foreign buyers to secure finance.

Darren Mead, head of Mortgages at deVere Group, said: “Foreign nationals from the Middle East, Asia, Europe and the U.S. as well as British expats residing in those destinations are a hugely important demographic for the UK’s property market. Quite sensibly, they view British property as a safe haven asset and, due to the relative weakness of the pound it has become more attractive in recent times.

“In our experience these buyers, without seeking quality advice first, are finding it increasingly difficult to purchase property in the UK, often being turned away by mainstream, high street lenders.”

He continued: “Expats have been typically deemed as ‘higher risk’ by UK lenders, even if they have substantial assets and a high salary.

“But now, due to the changing criteria, buyers are finding it more difficult, unless they work with mortgage advisors who specialise in expat home loans for those who live outside the UK.

“This is because more common lenders now require borrowers to receive a minimum of 145% of their mortgage costs in rental income. Previously it was 125%.

“This change to lender affordability criteria, could have potentially significant affects on the UK’s property market for expat buyers if they are not made aware prior to making a mortgage application.”


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