UK sees rise in Expats looking to Invest in Buy-to-let Property despite Borrowing Difficulties

By HopwoodHouse, 26 February, 2018

Over the last 12 months, the UK has seen an increase to the number of expats currently living in Australia, looking to make an investment into the UK buy-to-let investment property market. Although the UK has experienced changes to the way the market is able to work, including tougher lending criteria and closer scrutiny, there has been an increase of approximately 29%. There are more than a million Brits living in Australia, and many of them wish to buy some form of property in the UK, whether to use it as somewhere to live when they return home, or even as an investment opportunity.

UK Expat Borrowing

The last few years have seen the UK mortgage market be hit with a whole collection of changes, new laws and new regulations, which has made it somewhat more difficult for borrowers to get the money that they need for their investment. As well as those living within the UK finding things tough, UK expats face much more difficulty where mortgages are concerned.

Following a set of rules introduced by the European Union in 2016, anybody paying in a foreign currency would be scrutinised even closer than a standard resident investor. Expats living in Australia do indeed face real problems when looking to buy UK property, and the options they have available to them, including mortgages, are very limited. Australia is a very popular destination for British expats to live, and so it would be good for a better relationship between Australia and Britain, where property investment is concerned.

UK Expats and Buy-to-Let Loans

Property investment firms experience large amounts of enquiries from UK expats living in Australia, looking to buy investment property in the UK. Initially, the expats are looking to invest in buy-to-let property to provide them with another form of income or as a retirement fund, and many of them then hope to live in it if and when they decide to return home to the UK.

However, it has become very difficult for those not living in the UK to gain a mortgage, with many lenders pulling out of the expat lending market in the last 12 months. An existing UK mortgage, a 30% deposit and the equivalent of a £45,000 salary may actually put you in good standing with potential lenders, but without these you may really struggle for options in terms of high rates and possibility of lending.

There are a select number of lenders that will grant buy-to-let mortgages to expats living in Australia, but most lenders will have stringent criteria that they must meet. Despite this, there has been a significant increase in those looking for UK property investment, and this may mean that the future holds looser lending criteria for UK expats in Australia.