UK Expat? How To Get an 80 percent LTV Buy To Let Mortgage for a UK Property

You’re brunching poolside in Abu Dhabi or Singapore and thinking: it can’t be too soon to start investing my no-tax (or low-tax) dirhams (or dollars) in property back home.

You may already have your eye on an apartment with strong tenant-appeal in Manchester’s Mayfield, or Birmingham’s Broad Street. If you haven’t managed to put aside more than £60K of a £300,000 price-tag, you’ll be looking for a buy to let mortgage at the upper end of the loan-to-value (LTV) spectrum for UK expat lenders.

It’s tight – but for a well-connected broker it’s do-able.

Invest in the UK rental market with a low deposit

Am I eligible if I’m paid in a foreign currency?

By definition, nearly every UK expat borrower – and certainly all the expat clients we’ve looked after – are paid in non-sterling currencies. So you’re in good company.

• Most of our expat clients have local currency packages: Euros, Hong Kong dollars, Malaysian ringgit…
• So long as the country you are working is top-rated for anti money-laundering by the international Financial Action Task Force (FATF) there is usually no issue with this.
• Some clients have complex compensation packages that may include base salary paid in local currency plus bonuses paid in US dollars.
• Clients working for US corporations may be paid in US dollars, which is usually very acceptable to lenders.
• Some UN employees paid in local currency have their sterling salary equivalent guaranteed within a specified range.

Most expat lenders at this LTV will require mortgages to be paid in sterling from a UK bank account (rather than, for example, from an offshore account).

• Some lenders will only consider expat borrowers who work for recognised international employers (large multinationals).
• For residential rather than BTL expat borrowing (where family will be living in the property) some lenders will only consider a restricted range of foreign currencies. One or two will only consider expat employers that have a UK presence.

Can I apply if I’m self employed?

This is a more restricted field of lending, but banks and building societies will consider self-employed applicants on a “case-by-case” basis.

Self-employed clients with a track record of independent earnings are looked on more favourably than contractors, whose earnings are dependent on contract renewal.

• Expect to supply at least two years’ accounts of established earnings - longer if you’re a start-up. (For example, if you can only show £20K of earnings in your first year of business, and £80K in your second year, most lenders will require stronger evidence that your earnings can be sustained.)
• Your accounts must be verified by a "reputable accountant". (Occasionally lenders may require that you use one of the "Big Four" international accounting firms: Deloitte, Ernst&Young, KPMG or Pricewaterhouse Coopers.)

Is there a maximum I can borrow as an expat?

Borrowing a 80% of the purchase price of a property is pretty much the ceiling that can be achieved for expatriate clients, considering the greater risk that lenders are factoring for, with borrowers based overseas who might be hard to contact if things go adrift.

There’s also an absolute ceiling on the total that lenders feel comfortable investing in a single property for expats.

At an 80% loan exposure for the lender, we can access borrowing for you of up to £750,000. With your deposit, lets you go shopping for properties up to a pricepoint of just under £940K.

If you’re able to increase your deposit by another 5% we can access borrowing up to a million pounds.

(If we can introduce you to a private bank they can stretch to over 10 million at 75% LTV.)

Do I need to be a home owner already to get an expat BTL mortgage?

For some lenders this is a requirement.

If you’re living in the UK and looking for finance to buy a rental property as your first property investment, lenders could be legitimately concerned that you could be looking for lower-cost BTL finance on a property you actually intend to live in.

We can access expat lenders who are willing to consider "non owner occupiers" for BTL property finance.

Are there options for buy to let properties in Scotland?

Yes.

It’s a vexatious quirk of the UK lending market that it can be more difficult to arrange finance for properties north of the border – or certainly north of the Glasgow-Edinburgh Central Belt.

The issue will always be a lender’s assessment of the strength of the local property market, and whether they can readily find a buyer for the property, if they should need to.

We can source a BTL mortgage for you on a Scottish investment property, so long as the valuation, and projected rental returns, stack up.

What other restrictions might apply?

Some lenders exclude:

• First-time landlords
• Borrowers over a certain age
• New-build houses
• Pension or investment income as part of your income
• "Top-slicing": topping up rental income from your salary earnings to cover the mortgage costs

With our industry knowledge we can source lenders who will consider any, or all, of these circumstances.

How much do I need to put down as a deposit?

If you’ve got 30%, or even 25% of the asking price to put down, there are a good number of willing banks or building societies we can shop around on your behalf.

If the biggest deposit you can stretch to is 20% but you’re still keen to jump in, there are a handful of specialist lenders we can take your application to.

Interest rates can be higher, and we’ll need to look careful at the how the background application fees and charges add up, to ensure that we get the borrowing that suits your circumstances best.

Read our blogs on expat finance

Contact an experienced expat mortgage broker

At Clifton Private Finance we have the in-depth industry knowledge that will be critical for you. You'll talk to an advisor who knows  the right questions to ask to establish not only your current but your future plans - to set up the most appropriate finance for you, and to save you time and money.

Call us any time to arrange a convenient time to discuss what you need:

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