UK Investment Property for Swiss Investors

24th Aug 22
Islay Robinson GROUP CEO

Islay Robinson

UK Investment Property for Swiss Investors

Islay Robinson

Swiss investors have long been drawn to the UK's booming property market, particularly London, to purchase properties to be rented out. However, other major cities and regions are also excellent places for a UK investment property.

You are eligible for a UK investment property mortgage if you reside in Switzerland (irrespective of whether you are a British expat, Swiss national, or another nationality). However, the procedure may be slightly more challenging if you were a UK resident. 

UK Investment Property Market 

The first thing to comprehend is the UK's investment property market. Most UK buy-to-let mortgages are 'unregulated' mortgages, meaning you own a property you either do not want to live in or rent to a relative. Unregulated mortgages have distinct loan requirements than regulated mortgages, which may affect the amount you can borrow for real estate.

In most cases, Swiss residents purchasing UK rental property will use rental income to pay for their mortgages. Lenders will want to see that rental revenue is substantially higher than mortgage payments. Rental income will need to cover the mortgage at least 110%, but more likely at 150%, depending on the lender.

Some UK investment property schemes are configured so that the lender's calculated rental income (including excess mortgage coverage) does not necessarily match the amount you will be charged for your loan. As a result, brokers such as Enness can assist Swiss resident buyers in grasping what lenders want and how to market their services.

Lenders will also pay close attention to your income when considering whether to grant you a mortgage for a buy-to-let property, especially if you live in Switzerland. Swiss incomes and salaries are higher than the UK average (reflecting the higher cost of living). Therefore, you will not be unable to purchase a property because of your income if it is a reasonable investment. If you borrow from a UK lender, you must be clear about your expenses, especially your regular costs. Since Switzerland is much more expensive than the UK, some lenders may baulk at your regular bills without an explanation and carefully delineating your outgoings.

Banks in the UK prefer to lend to experienced investors, and many will require you to devise a plan for how you will maintain and advertise the property from abroad. If you own property in the UK, you may find it easier to borrow if you're an expert in the field. However, you will still need to provide concrete data about your finances, income, and affordability. In addition, lenders may be concerned about the risk associated with larger rental portfolios than landlords with fewer properties.

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Enness can still help you get a mortgage, assuming you want one, even if you're a novice buy-to-let investor.
In some cases, you may borrow more using both your personal and rental incomes to pay the mortgage in the UK if you cannot do so using only your salary. You must make your case to lenders as compelling as possible if you do not have enough income to pay the mortgage. Since you probably make your in a foreign currency and have other financial commitments, how you explain your financial plan is often the difference between receiving a loan or not. Lenders want to make sure you can pay the mortgage and meet your obligations (particularly important in international ventures). 

Whatever you want to purchase in the UK, regardless of your personal circumstances, financial background, or nationality, Enness will find you the best UK buy-to-let mortgage rates and terms. We provide mortgages worldwide, get in touch now.