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UK banks now competing for a share of the expat mortgage market
| Published: | 3 Sep at 6 PM |
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UK expats hoping to invest in a British property after Brexit crushes house prices may now find better deals from mortgage lenders.
Competition between British banks has resulted in something of a price war, with casualties now either quitting or identifying new markets for their products. Either way, the development has simplified expat searches for the best buy-to-let or investment mortgage deals. The change in sentiment is thanks to the recent government-induced tighter laws aimed at reducing the risks of non-payment. Banks offering mortgages to expat clients must now ring-fence this part of their businesses, thus keeping it separate from investment and international banking. The laws actually prevent banks from using large customer deposits as was possible previously, resulting in reduced profit margins.
Financial experts are reporting the new restrictions have forced banks to gear up their lending levels in order to retain or even improve their margins, resulting in an increased choice of expat mortgages offered for either buy-to-let, capital gains on resale, homes for returning expat professionals after their overseas contracts end, or as accommodation for family members now at a British university. Low deposit mortgages are now far easier to track down than at the same time last year, with many new mortgage products now specifically aimed at UK expats. Also, banks have finally realised that expatriate professionals normally have a deposit ready and are highly dependable as regards keeping up payments.
The selection of expat-aimed products is now wider than at any time since 2007, with some 46 lenders competing for the expat market, Even more are now coming on stream as banks reconsider their lending requirements. As conventional banks struggle to maintain their margins, the new niche-oriented kids on the mortgage block are hoovering up new expat borrowers as fast as they arrive. The Brexit-induced sterling crash in addition to the projected house price slump makes now the best possible time for expats looking for a longer-term investment as well as a regular rental income linked to a reasonable rate of interest.
Competition between British banks has resulted in something of a price war, with casualties now either quitting or identifying new markets for their products. Either way, the development has simplified expat searches for the best buy-to-let or investment mortgage deals. The change in sentiment is thanks to the recent government-induced tighter laws aimed at reducing the risks of non-payment. Banks offering mortgages to expat clients must now ring-fence this part of their businesses, thus keeping it separate from investment and international banking. The laws actually prevent banks from using large customer deposits as was possible previously, resulting in reduced profit margins.
Financial experts are reporting the new restrictions have forced banks to gear up their lending levels in order to retain or even improve their margins, resulting in an increased choice of expat mortgages offered for either buy-to-let, capital gains on resale, homes for returning expat professionals after their overseas contracts end, or as accommodation for family members now at a British university. Low deposit mortgages are now far easier to track down than at the same time last year, with many new mortgage products now specifically aimed at UK expats. Also, banks have finally realised that expatriate professionals normally have a deposit ready and are highly dependable as regards keeping up payments.
The selection of expat-aimed products is now wider than at any time since 2007, with some 46 lenders competing for the expat market, Even more are now coming on stream as banks reconsider their lending requirements. As conventional banks struggle to maintain their margins, the new niche-oriented kids on the mortgage block are hoovering up new expat borrowers as fast as they arrive. The Brexit-induced sterling crash in addition to the projected house price slump makes now the best possible time for expats looking for a longer-term investment as well as a regular rental income linked to a reasonable rate of interest.
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