March 21st, 2019. Tom Rowlands
Can I Get Property Finance If I Live Abroad, Have a Foreign Income, Or Am Not a UK Citizen?
As property finance specialists, it is not uncommon for clients to come to us looking for a broker to help them secure funding with an ‘out of the norm’ lending situation. From bad credit to tight deadlines, we’ve seen it all. However, we’re increasingly being asked about buying property in the UK from overseas and whether someone who has a foreign income can acquire a property loan here. So, we’ve decided to write a blog post to clear up any confusion and breakdown the complexities.
Can I Get a Property Loan If I Live Abroad?
It is not uncommon for borrowers to spend part of their time here in the UK and part elsewhere, or to emigrate to another country entirely, but still want to invest in bricks and mortar here. Therefore, many lenders have become accommodating of this.
However, if you’re considering buying property in the UK from overseas, you will struggle to find this kind of finance on the high-street, quite literally. That’s where using a finance broker, like us, comes in handy.
Overseas buy to let mortgage or development finance is possible. However, the process is slightly more in-depth than the typical domestic loan and having a finance expert to talk you through the process is advised.
A lender will want to know how much time you spend out of the country, how long you have had these circumstances, and any plans in the near future to move – for example, back to the UK fulltime. If you have a credit profile within the UK, this will work in your favour.
It should be noted that some lenders will require you to sign any legal documents in the UK.
Can I Get a Property Loan If I’m Not a UK Citizen, But Live in the UK?
Now, this is slightly different. This would refer to a person who does not currently have UK citizenship, but lives in the UK.
Lenders are more likely to provide mortgages for foreign nationals if an indefinite leave to stay has been taken. This means you have been an EU resident for more than three years, have a UK bank account and a permanent job here. If you are a non-EU citizen, you will have to have a permanent job and bank account in the UK and have spent five years here.
It should be noted that many British lenders will rule out lending to foreign nationals from any sanctioned country. For example, Iraq, North Korea or Zimbabwe.
Any lender will also likely want to establish how well your English skills are to ensure you understand the legal agreement you will be entering into.
Can I Get a Property Loan If I Have a Foreign Income?
Possibly. The European Commission implemented the Mortgage Credit Directive (MCD) in 2014 which sets out lending regulations for foreign currency mortgages. The MCD is designed to protect consumers and is incorporated by all EU member states.
The MCD applies if a loan is to be repaid by income or assets received from a country outside of the UK, or a currency other than Pound Sterling. This will make lending more difficult, but not impossible.
When making an application, there will likely be specified conditions regarding the currency exchange to prevent against drops in the value of currency but allowing all to benefit from any increase. There will also be in-depth checks on proof of income and additional assurances required.
If you have a foreign income but would like to buy a property here in the UK, one of our knowledgeable brokers will be able to point you in the direction of a suitable lender.
Please note: If you are borrowing as a company, you may encounter difficulties if your business is based in countries such as the Cayman Islands or the British Virgin Islands.
Other Factors to Consider:
- Exchange rate fluctuations
- Time differences
- Document language translation
- Your UK credit profile (if available)
Have Questions or Want to Learn More?
The above is a very brief overview of mortgages for foreign nationals and purchasing property with foreign income. If you would like to learn more, please get in touch with our friendly and experienced brokers today to learn how our specialist skills can help you purchase your dream property.
Article By Tom Rowlands
March 21st, 2019
Tom joined Pure Property Finance in 2017 after a career as a Client Wealth Manager, where he spent just under 3 years advising on financial and tax planning. Tom specialises in bridging finance and property development funding, having completed deals ranging from a simple £30K property purchase through to £2m+ mixed-use developments.See more articles by Tom