That said, the issues that expats face go a lot deeper than temporary financial challenges, especially for those seeking a mortgage from a mainstream lender on the high street.
A primary challenge is the lack of a UK address, which complicates the process of opening a bank account – a necessary step for securing a mortgage or loan for mainstream lenders.
Building a UK credit history is another significant challenge. Expats’ financial activities are primarily based abroad, leaving them without a UK credit history to demonstrate creditworthiness. This absence can hinder their ability to secure favourable mortgage terms or other financial products necessary for property investment.
Additionally, expats often encounter difficulties related to income assessment. Whether relying on private pensions, cash savings, or investment returns, many lenders struggle to evaluate foreign income accurately.
This is particularly problematic when income is in a different currency or involves complex financial arrangements, making it hard for lenders to apply their standard criteria.
That is why specialist lenders and brokers, many of whom have in-depth knowledge of the difficulties that expats face, have such an important role to play.
How the specialist finance sector can help
At the heart of working with expat investors is having the expertise and experience to accurately and holistically assess a client’s financial situation.
For example, while a high street lender might turn away an expat for having an irregular stream of income, specialist lenders would be able to take into account a borrower’s savings, investments and assets to determine their overall financial situation. In turn, this allows them to take a more nuanced approach to assessing a borrower’s creditworthiness.
This means that expats – and brokers finding mortgages for them – should be seeking out lenders who manage their applications on a case-by-case basis, and who do not stick to a rigid, tick-box approach to lending.
Furthermore, expat borrowers will also require a broker and lender with expertise in expat regulations.
Indeed, from stamp duty land tax surcharges to capital gains tax, specialist lenders tend to have a deeper understanding of the tax and regulatory implications that expat investors are impacted by.
This can help expats avoid common pitfalls and ensure that they are aware of the full financial and legal implications that a property purchase might entail.
Clearly, expat buyers face numerous challenges in today’s property investment landscape. However, with the support of a lender or broker with expertise in working with expat borrowers, they can navigate these obstacles effectively and capitalise on the opportunities that are emerging as the UK property market continues its recovery.
