Many homeowners prefer not to sell their properties when moving abroad, whether they want to retain a foothold in the UK property market or plan to return to the property in the future. In these circumstances, it may be possible to remortgage an existing residential property onto a buy to let product and retain it as an investment.
I recently assisted a married couple who were moving overseas. The wife was Swedish but had lived in the UK for many years, while the husband was British.
They owned a property in the UK which had been their primary residence for many years. However, they were planning to move to Sweden to live closer to the wife’s family. Rather than selling their home, they wanted to retain it as an investment and therefore needed to refinance onto a buy to let mortgage.
There were several factors to consider. Both clients were due to start new jobs in Sweden and would be paid in a foreign currency. Lenders can be more cautious when assessing borrowers who are moving overseas, particularly where new employment is involved. The wife’s foreign nationality was another consideration when identifying suitable lenders.
OUR SOLUTION
The clients’ existing lender was due to increase the interest rate significantly when their current product ended, so I began looking for an alternative lender with experience of supporting UK homeowners moving overseas.
I provided the lender with copies of the clients’ new employment contracts, demonstrating that their new roles were permanent and providing greater clarity around their future income. The clients had also already secured a tenant for the property, so I supplied the tenancy agreement to demonstrate the expected rental income.
I was able to arrange the new interest-only mortgage structure, helping the clients retain greater cash flow from the rental property while living overseas. The resulting terms were significantly more competitive than those available from their existing lender.
The case demonstrates how specialist lender access can help homeowners who are moving abroad and want to retain their UK property as a rental investment. Where foreign currency income, overseas employment and a change from residential to buy to let borrowing are involved, finding a lender comfortable with the complete circumstances can be particularly important.
For homeowners moving overseas, international mortgage expertise can also help identify lenders familiar with cross-border income and international borrowers.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise.
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Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
