As a non-resident borrower, if you want to borrow a significant amount for a buy-to-let property, you will likely be best served by private banks and niche lenders. Generally, they can better cater to non-resident buyers and offer more advantageous terms than high street banks, although it’s important not to overlook the latter altogether.
Traditional lenders such as high street banks can still offer very competitive buy-to-let mortgages, but only if you have a very plain-vanilla scenario. Generally, exploring borrowing from high street banks can be a viable option if you have sufficient income to cover mortgage repayments (excluding other rental income). If you have multi-currency income, exclusively generate income outside the UK, or have relatively little income but a significant net worth, borrowing from high street lenders can be challenging as a non-resident. However, as a consequence of Enness’ long-term relationships with many traditional banks, there is a greater degree of flexibility when instigating face-to-face negotiations, especially for non-resident borrowers if you have the right kind of background. While most multi-million-pound mortgages still tend to be the domain of private banks and niche lenders, other lenders are often worth exploring.
High Street Banks
High street banks in the UK are funded differently from private banks and alternative lenders. There is some degree of flexibility for bespoke arrangements for certain borrowers. However, there are restrictions on how much these banks can lend in most cases, especially if you are based in Dubai or the MEA region – even as an expat.
Specialist Lenders
Specialist lenders are a vital part of the UK mortgage market, and many non-resident borrowers get the best buy-to-let mortgages from these institutions. As with their private bank counterparts, specialist lenders can take a more rounded approach to non-resident borrowers – especially those with multiple income streams and global assets.
Private Banks
Private banks have become the first port of call for many non-resident buy-to-let mortgage applications, especially for non-resident buyers. Most private bank mortgage funding agreements are one of a kind, and you will benefit from a package that is tailored to your individual situation, finances, assets and structures. Comparing headline interest rates from private banks with high street bank mortgages is difficult – rates may be very slightly higher with a private bank. Still, a private bank mortgage will come with more flexibility, better terms and other advantages. This is always worth bearing in mind.
Private banks mortgages are extremely popular with high-net-worth individuals from the UAE and MEA region, especially if you are in the market for additional wealth management services. These lenders can offer extremely attractive, often subsidised, headline mortgage interest rates to tempt VIP borrowers who then become clients of the bank. In return for the best rates, many buy-to-let mortgage arrangements will also involve the transfer of additional investments to the bank’s asset management division.
Where other lenders can be focused on rigid underwriting and risk tests, private banks are usually more flexible. You will usually be able to put forward global assets and multiple income streams as collateral for a buy-to-let mortgage.
Most private banks do not publicise their services openly – especially for large buy-to-let mortgages. Borrowing from many of these institutions remains “invitation only”. Enness can approach private banks you would not be able to access through traditional contact routes.
Bridging and Short-Term Lenders
You may wish to acquire a buy-to-let property that you will develop or refurbish before renting it out. Here, bridging or short-term funding is often used to finance the cost of the work before you go on to remortgage the property at a higher value. Short-term finance can last between 24 hours and up to three years, depending on your needs.
If you want to pursue bridging finance before remortgaging your buy-to-let property, Enness’ team may suggest arranging the remortgaging deal at the same time as bridging finance. Doing so ensures repayment of the short-term finance as quickly as possible and re-bases the debt on a more traditional mortgage interest rate which is usually significantly cheaper.
International Banks
Many international banks will lend to expats and borrowers from Dubai, the UAE and MEA region. As with many high-value mortgages, most deals from these lenders are not promoted to the broader public, and introductions are essential. Enness’ brokers will always assess your situation and financing requirements to identify if an international bank or a local UK bank will be the best lender for you. Enness will then make full use of a network of more than 500 lenders to arrange the best buy-to-let mortgage funding for you.