"Although there remains a lot of uncertainty in the world, we expect the expat buy-to-let market to remain active as we navigate our way through the Brexit period."
The big question being asked is what does Joe Biden's win mean for Britain and the EU? At the moment, we can’t really be sure and – as always – the devil really will be in the detail. With any Brexit detail being far from clear there will always be room for speculation and speculation will always impact a variety of people and markets.
In terms of the impending repercussions on expats, we’ve already seen thousands of Brits living in the EU being told that their bank accounts will be closed owing to Brexit. Following the UK's full departure from the EU, UK banks will no longer be allowed to provide services to customers in the EU without the right banking licences. And this is just one example of many potential changes in the offing for expats.
When it comes to mortgages, although there remains a lot of uncertainty in the world, we expect the expat buy-to-let market to remain active as we navigate our way through the Brexit period. Here at Hanley Intermediaries, we recently re-entered this marketplace and we hope this reintroduction will help provide some much-needed choice in this product area.
So, how can intermediaries better support their expat clients?
Expats looking to become landlords generally require an individual lending and underwriting approach rather than relying solely on an automated decision-making process. This is where specialist lenders/building societies are able to step up to the plate. Generally speaking, criteria will vary from lender to lender, but three key considerations remain:
• If they have a UK bank account/credit history,
• The country in which the borrower resides,
• How the property will be managed.
From a client perspective, they too need to understand what is required of them and the advice process. For example:
• They need to ensure that their lawyer is fluent in both English and the local language, and that they understand property law,
• They need to consider expat buy-to-let insurance. For some lenders, this is mandatory as a lack of insurance poses a financial risk to the lender,
• It can help the application process if the applicant’s references and payslips are written in English. If not, they may have to be professionally translated.
Brexit could prove the catalyst for a growing number of expats to keep a foothold in the UK property market. Such purchases may be with a view to housing their children through higher education, to support them in their early working years, to pass down in property in the future or as a part of a retirement/investment plan.
With the number of opportunities and available expat buy-to-let options likely to grow and rate/criteria to improve, building closer relationships with specialist lending partners will help ensure that intermediaries are better positioned to source an appropriate solution for their expat clients now and in the future.
