The UK remains one of the most attractive places in Europe – and the world – to purchase property, and many non-residents look to capitalise on UK property to generate income or invest in an appreciating asset. But how hard is it to access finance as a non-resident?
Mortgages for Non UK Residents
Accessing a UK mortgage is slightly more challenging for a non-resident than for a UK-based borrower. However, the buoyancy of the UK's property market means there is near-constant demand for UK properties from foreign investors. Lenders are, therefore, keen to offer UK mortgages to non-residents, and there are plenty of financing options and lenders that will provide non-residents with competitive UK mortgages.
Enness is a leading broker of high-value mortgages. We assist individuals looking to buy UK property to access the most competitive rates and terms to finance a UK property purchase. Provided your financial background supports a mortgage and borrowing is affordable, we can usually assist you in arranging a UK mortgage regardless of your:
- Nationality
- Tax residence
- Domicile
- Place of birth
- Income currency
- Type of employment (i.e. self-employed, entrepreneur, regular salaried employment, etc.)
UK Property Financing Options
The UK has one of the world's largest and most competitive mortgage markets, meaning we'll be able to source plenty of financing options for you, and we can broker finance for investment, holiday home, expat, unregulated and buy-to-let, commercial or mixed-use real estate purchases.
As a broker, we are entirely independent, meaning we have access to all the lenders that offer non-resident UK mortgages. Provided the loan is affordable, and your finances support the amount you want to borrow, you don't need to have an existing credit footprint in the UK or Europe for us to be able to arrange a mortgage for you, and we can source a mortgage for you regardless of where you have a credit footprint.
For non-residents, private banks headquartered or with branches in the UK can be some of the most flexible and competitive finance providers. Unlike their European counterparts (who typically require assets under management for high-value mortgages), some UK private banks offer non-resident investors dry mortgages. In some cases, we can negotiate private bank mortgages for property purchases of around £1 million rather than for very high-value property purchases in exclusivity.
Many mainstream lenders (such as building societies, insurance firms, pension funds, high street and online banks) will also offer mortgages to non-residents, as do increasing numbers of niche and smaller lenders. Often, these smaller lenders are more flexible than large lenders and, along with private banks, can take a more holistic view of your financial situation, meaning they can offer more tailored mortgage solutions. Tailored solutions are useful if you have a particularly unusual or complex background that would otherwise create a barrier to entry when it comes to borrowing from high-street lenders.
Mortgage Costs
Lenders happily cater to non-resident investors in the UK, and mortgage rates for borrowers not based in the UK are broadly similar to those offered to residents. In some cases, factors in your profile or background will dictate that lenders see slightly more risk in your profile, and they will charge a little more to access a mortgage. However, in general terms, the difference between rates set for resident and non-UK resident mortgages is relatively small and is not universally applied, given every application will be considered and underwritten on a case-by-case basis.
Mortgage Products
Along with an extensive choice of lenders, the UK has a variety of products for non-resident buyers, which include:
High-loan-to-value UK Mortgages
Lenders used to offer high loan-to-value (LTV) mortgages more readily to both UK resident and non-resident buyers, but this has changed in recent years as lenders look to share more risk with mortgage holders, especially in the light of increased interest rates and a potentially recessionary environment in some countries.
That said, many lenders offer high LTV mortgages of 85% or more, with some offering 90% LTV mortgages for non-residents. In many cases, lenders will offer a mortgage product aimed at non-residents for relatively specific purposes: a 90% LTV mortgage for a buy-to-let investment, for example. There are equivalent products for other scenarios, such as expat mortgages, holiday home mortgages, and so on.
High LTV loans will usually only be available to you if you are a non-resident with excellent income and a solid financial background - lenders will be looking closely at the quality of your profile and finances. Usually, you will need to meet specific criteria set by the lender to be eligible for this type of loan, which will focus on ensuring the loan is affordable and minimising the risk of default. For example, a 90% LTV mortgage for a buy-to-let investment is only likely to be possible if there is significant headroom between rental income and the mortgage repayment and you have stable and significant surplus income you could put towards paying the mortgage in a vacant period. A substantial asset base and net worth will also likely support your case.
Interest-Only Mortgages
Non-resident investors can often access interest-only mortgages for UK property purchases, especially if you are a high-net-worth individual. Interest-only mortgages tend to be offered by private banks more readily than high-street lenders.
Usually, lenders will only offer interest-only mortgages to you as a non-resident if you have the 'right' financial profile, which is to say you have excellent income, a significant overall net worth and your plans for repaying the loan at term support this type of finance. The benefit of an interest-only mortgage is that you will usually pay less in monthly mortgage repayments than you would with a capital and interest mortgage, given you are only paying interest and will need to repay or refinance the capital at term. However, lenders sometimes offer lower LTV for interest-only products than they will for other types of mortgages, so it's always worth considering what is most beneficial to you - we can run cost comparisons if helpful, so you can see what different products will cost.
Non-Resident Occasional Use Mortgages
For non-UK resident investors looking to purchase buy-to-let investments, trophy homes or holiday homes in the UK, lenders sometimes offer occasional-use mortgages. As the name suggests, you can use these lending products if you will occupy or stay in a property from time to time, but your UK property is rented or vacant the rest of the time. Non-resident mortgages are often unregulated, which means - provided your financial background supports this kind of borrowing - you can effectively opt out of regular income, expenditure and affordability processes, which apply to non-resident borrowers taking out regulated loans. This means you may be able to access a larger mortgage or a higher LTV mortgage or benefit from more competitive terms and rates.
Contact Enness
If you are a non-resident considering purchasing a property anywhere in the UK, get in touch with Enness today to discuss your situation in more detail. Enness' expert team of buy-to-let brokers will be able to advise you of your options, mortgage products and current rates on the market.
The views and opinions expressed in this piece are those of the author and do not constitute advise or a recommendation, nor do they necessarily reflect the official policy or position of Enness. They are also not intended to indicate any market or industry viewpoints, or those of other industry professionals.
This guide is for information and illustrative purposes only and nothing contain within should be construed as advice or a recommendation.
This guide is for information and illustrative purposes only and nothing contain within should be construed as advice or a recommendation.
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Toby has 11 years’ experience working across London’s property and financial services markets.
