Before I came to the Ipswich in 2015, I didn’t come across expat cases very often – it simply wasn’t something many lenders were interested in. In fact, in today’s ever more global world with the number of UK expats set to increase, it does seem a bit strange that so many lenders and indeed intermediaries seem to shy away from this market.
It is a real misconception that expat cases are too complicated or too much hassle. While of course they are more complex than your standard off the shelf mortgage case, finding the right solution for clients can be so rewarding.
It’s a joy to see the consistently high quality of expat applicants we see at the Ipswich on a day to day basis – many are skilled professionals with a good income covering a wide array of occupations, such as those from the oil and gas industries or teachers and professors.
Wide range of reasons
We hear from expats seeking a mortgage for a wide range of reasons – many simply wanting to earn a rental income from a UK property – often their previous abode – or remortgaging the family home where their spouse and any kids are still living.
I’ve also come across applicants looking to raise capital in order to purchase a home abroad or even help their adult children onto the property ladder with a gifted deposit – none of which should be a problem if the affordability is right.
The expat market has been relatively stable for as long as I’ve been involved with it, which is quite remarkable considering the political and economic upheaval of the last few years. Brexit hasn’t had much of an impact on the cases we see as many are from applicants living outside the EU, particularly in the Middle East and in the USA.
However, the weakening of Sterling following the initial referendum result in 2016 has made investing in the UK cheaper and has probably gone some way to explaining the uptick in cases we’ve had.
The challenges facing expats
There are more than 5.5 million Brits living and working abroad according to the latest figures – and quite a few of those are going to have property back in the UK.
By far the biggest hurdle for expats is the lack of choice when it comes to mortgage providers, with many of the high street lenders seeming reluctant to get involved due to the perceived risks and challenges involved. Or in many cases, simply because those applicants don’t fit through an automated, computer based scoring system.
This underserved area of the market is where we and other smaller lenders really come into our own, with our ability to manually underwrite cases in-house and look at the details more carefully.
On the adviser side, complex criteria and the sheer uniqueness of each applicant can pose a problem – different lenders’ rules regarding countries and currencies vary widely, meaning it can often be a challenge to know which lenders may be able to help with a particular case.
And of course, at a time where exchange rates and stock markets can tumble at the drop of a tweet from Donald Trump or each time there’s a new twist in the Brexit saga, lenders have to keep a much closer eye on the markets and monitor rates carefully.
Welcome expats with open arms
In my experience, expat applicants are too often dismissed as inconvenient and treated accordingly – despite the fact that the bulk of cases I come across are low loan-to-value, high income professional applicants who would have no problem whatsoever getting a mortgage at home.
My plea to intermediaries everywhere would be to use your business development managers and helpdesks – there’s so much more help out there than most people realise and plenty of lenders who are willing to tackle more complex or unusual cases.
Brokers submitting an enquiry to a lender, should get as much information as possible from the client to make the process as easy as possible – such as their employer, salary, what currency they’re paid in, whether or not they are returning to the UK and who will be living in the property while they’re outside of the UK.
Of course, expat cases might take a bit longer, and if a client is living on the other side of the world then there may be some awkwardly timed phone calls where at least one party should really be in bed fast asleep instead of poring over the finer details of a mortgage.
But at the end of the day, there’s nothing like falling down the rabbit hole of a good case and finding the perfect solution for your client.
