Popular UK mortgage lender Skipton have announced that as of today (26th June 2023) they will be introducing some new big changes to their visa criteria and mortgage policy for non-UK nationals residing in the UK and looking to purchase a property. Normally most lenders in the UK will want mortgage applicant’s to be full UK nationals with unrestricted UK residency, purely for insurance reasons, so that the lender has more confidence that the loan they are providing will be paid back, and won’t have as much risk of the borrower leaving the country. Voluntarily or involuntarily. For lenders that will be willing to lend to non-UK nationals in the UK, they often have strict criteria around visa and residency specifics. But, it seems that Skipton have unexpectedly made some changes that will benefit these non-UK national borrowers.
Maximum Loan To Value Increased For Borrowers On a Visa
Prior to today, Skipton’s maximum loan to value (LTV) for any borrower currently on a visa was capped at 75%. That means that anyone on a tier 1 visa, tier 2 visa, spousal visa, or any other visa aside from a tourist visa could only borrow a maximum of 75% of the value of a property as a mortgage. That also means that first time buyers in the UK who are on a visa would have to have at least a minimum of 25% deposit with Skipton to even be considered for a mortgage. In the new changes announced by Skipton today, they have confirmed that the maximum LTV for borrowers on a visa has been increased to 90%. That means that non-UK national borrowers in the UK can potentially put down 10% deposit on a mortgage, subject to them meeting all other standard mortgage criteria. This applies to both joint borrowers and sole borrowers.
90% Loan To Value Restrictions Can Be Disregarded
In an even more interesting move, Skipton has also announced that the 90% LTV restriction can potentially be disregarded if one or more of the applicants has indefinite leave to remain on their visa or are UK nationals. So if a couple were purchasing a property together where one was a UK national and the other was on a tier 1 visa then they could potentially get a 95% or even possibly a 100% LTV mortgage. The same thing applies if both applicants are non-UK nationals but one of them has indefinite leave to remain. Although Skipton has confirmed that for this scenario, the applicants will be subject to more affordability and lending criteria checks than regular mortgage clients.
Additional Requirements to Qualify
As a small side note, Skipton have also confirmed that the following criteria must be met too before a non-UK national can be considered for the higher LTV mortgage products. They must have a minimum of 1 year residency in the UK prior to application. This means that you must have lived and ideally worked in the UK for at least one entire year (12 whole months) before you can be considered by the lender for a mortgage. Someone who has worked in the UK for 6 months then moved out of the UK for a month and then returned will not be accepted as they will not have completed one full year in the UK.
Skipton have also said that the borrower, regardless of the visa type will need to have a minimum of 2 years remaining on the visa before it expires. So someone on a visa with 1 year remaining will not be accepted, according to Skipton’s recent update. Both of these pieces of criteria are again to give the lender confidence in who they are lending the money to, and reducing the risk that the loan won’t be paid back if the borrower has to leave the country.
Speak to a Mortgage Advisor
If you are looking to get a mortgage, but aren’t sure if your visa status will cause an issue or not, speak with a professional mortgage advisor today. At Oportfolio mortgages, we are experts in mortgage lending and lender criteria. Give us a call or send us a message today to see how we can help.