Despite recent economic struggles in the UK, most down to government mismanagement of taxes at the end of 2022, the UK is still a great place to own property. Especially property in high net-worth areas such as London and the South-East. In London, properties have always been and continue to be the most sought after homes to purchase. Whether as a full time residence, a holiday home, or an investment property such as a buy-to-let single residence or an HMO. Being based in London and knowing the London market very well, Oportfolio mortgages are experts in property investment. From UK residents purchasing a property in the UK to non-UK residents wanting to have a wonderful slice of the UK housing market for themselves. Over the last few months we have seen an increasing number of clients looking at getting a mortgage as a non-uk resident in London and other areas of the country. But is it a simple thing to do?
Is It Easy To Get A Mortgage In The UK As A Non-UK National?
Of course, living in the UK and purchasing a property in the UK is the easiest route forward, especially for high-net worth purchases. However, there is a market for non-uk residents purchasing property in the UK and it might actually be a lot less complicated than it initially seems. In this article, we t=will go through some scenarios and potential routes forward for purchasing and getting a mortgage in the UK. This blog is purely for information and not every scenario will apply to every purchase. Each non-uk resident purchase is unique and if you want to discuss your intentions in detail with a mortgage broker, you can always contact our team here.
UK National Mortgage
The best position possible, whether you live outside of the UK or not, is to be a UK national purchasing in the UK. One of the main things that a mortgage lender wants to be able to do, before they agree to lend you a mortgage, is to be able to trace your credit history and to make sure that you have the right to remain in the UK without the risk of being forced to leave due to visa issues or something similar. That means that if you are from the UK originally or have become a full UK citizen, the lender has confidence that you will be able to remain in the UK and keep up to date with your mortgage payments.
If you have been registered as a UK national and have lived in the UK before, they can also potentially trace your credit history in the UK to make sure that your credit file is ok and you aren’t having regular missed payments, defaults, county court judgements or bankruptcies. Even if you live abroad currently but are a UK citizen, having this certification can make a huge difference with mortgage lenders.
Non-UK National Mortgage
The slightly more tricky mortgage to arrange is for someone looking to purchase a property in the UK who lives abroad, and is also a non-uk national. Unfortunately, for a lot of mortgage lenders in the UK, this is not acceptable. Because you don’t currently live in the UK, they can’t trace your credit history. And because you are not a UK national, they can’t have the assurance that you are able to stay in the UK and/or have the ability to keep up with your mortgage payments in the UK.
However, that is not the be all and end all. It IS possible to get a non-uk resident mortgage if you are not a UK national. There are a few different options of how to go about this that we will go through later in the blog and all of them can potentially be arranged by a professional mortgage advisor.
Getting a residential mortgage in the UK (Buying a property that you will live in) as a non-uk national is probably the most straight forward route. As you will be living in the property, the lender can keep track of where you are and make sure that you keep up with your loan payments, even if it is just a holiday home where you live a few months a year. However, in order to get a residential mortgage in the UK as a non-uk resident, you will need to meet some criteria.
Firstly, most high-street banks will want you to have UK nationality as we have already said. They will also more than likely need you to earn an income in pound sterling and pay tax in the UK. This is most high-street banks. But, there are several high-street banks who are willing to make exceptions to this rule for high earners and less risk application such as smaller mortgage loans. There is also some criteria with lenders that stipulates that you must reside in the UK based property for a minimum amount of months a year. 3 months for example. If you plan on living there for only a couple of weeks a year, then a residential mortgage probably won’t work for you. For people who do not earn in pound sterling, who aren’t uk-nationals, and won’t live in the property that they are purchasing, you will need to talk to your mortgage advisor about other options.
One option, and a very popular one for high net-worth people living outside of the UK looking to invest in UK property in the buy-to-let mortgage option. The first thing that you need to know before going down this route, is that getting any kind of buy-to-let property or mortgage in the UK is tricky at the moment. Because of the risk factor of renting out the property rather than living in it, the economic pressures that tenants are feeling at the moment in the UK and the added risk of being a non-uk resident too. This kind of mortgage can be difficult to achieve, unless you are a) A high earning individual and b) Have a large down payment deposit that you can contribute.
Mortgage lenders are all about risk, so if they see a mortgage application for a buy-to-let property from a non-uk resident, with a small deposit, and a minimal amount of income, they will be less inclined to risk their money by lending to you. However, if you are a business professional looking to invest in high-end property in London for example, this could definitely be an option for you. Large deposit contributions from yourself, from a reputable source that can be traced easily by the bank (e.g. savings in a bank account built up over time. Or sale of another property in the past that can be traced and audited.) is a great position to start at.
We would recommend at least 40-50% of the property price as a deposit if you are getting a non-uk resident buy-to-let mortgage. Depending on your circumstances, this could be more. If you are a high-earning individual, probably at least the equivalent of £100,000 a year, then this will also put you in a great position.
As we have already mentioned a lot, most high-street banks in the UK will not offer mortgages to non-uk nationals purchasing in the UK. However, there are several that will offer this option to the right people. The main reasons that a high-street UK bank might offer a non un-resident mortgage are:
- You have a large deposit that comes from a reputable source and can be easily traced
- You are a high earner
- You have UK nationality or permanent right to reside in the UK, even if you do not plan on living there.
- You are connected to the UK by close family. For example, your partner might be a UK national or your child might live in the UK as a UK national.
Each bank has their own criteria and each mortgage enquiry is treated on a case by case basis so there is no definitive yes or no answer that we can give you until the bank has made their own assessment and decision. What we can do as mortgage advisors is go through your options with you, do some research with all of the mortgage lenders (over 90) that we have access to, and then make a strong case to the lender for why they should lend to you.
A lot of high-street banks also have international lending arms specifically designed for these type of cases that are only accessible through mortgage advisors or brokers. Banks such as NatWest have ‘NatWest International’ who specialise in foreign national mortgages, non-uk resident mortgages, and other non-standard UK purchases and remortgages in the UK.
Another option that you might have as a non-uk resident purchasing in the UK, is to go down the route of specialist mortgage lenders. These lenders are not typically high-street banks like Halifax, Santander, Nationwide etc. But, they may be able to lend to you with competitive rates and benefits, if you are not based in the UK.
With these lenders, they are much more inclined to lend you a mortgage if you don’t meet the high-street bank criteria. For example, if you have never lived in the UK and/or you do not and have never earned an income in UK pound sterling. For these lenders, because they are specialist lenders, they often have higher mortgage interest rates than the main banks. But again, all of this will be carefully researched by your mortgage advisor who will find you the best route forward.
Buying Property In The UK
Buying property in the UK is still a great investment, and getting a mortgage as a non-uk resident is definitely a potential option for you, subject to meeting the right criteria. If you are considering potentially purchasing a residential or an investment property in London or the UK at large, we are here to help and offer expert mortgage advice. Give us a call today to see how we can potentially help.