New range of mortgages for UK expats wanting buy/let opportunities

by Ray Clancy on July 18, 2014

A new range of mortgages aimed at British expats who want to buy and let a property in parts of the UK has been launched.

Skipton International is offering a maximum loan to a value of 75% on residential properties for buy-to-let, but the property must be purchased in England and Wales.


The buy-to-let property purchased must be in England or Wales

Applicants will need to be UK expats working abroad in an approved list of countries. The news comes at a time when it can be hard to get a mortgage if you live abroad.

Nigel Pascoe, director of lending at Channel Islands-based Skipton International, said the new products are a natural extension of the offshore bank’s existing mortgage range.

‘Last year, we launched a portfolio of buy-to-let mortgages for Channel Islands’ residents, which have attracted a lot of interest. UK housing has demonstrated long term price inflation and purchasing a property, as an investment, whilst living abroad often makes financial sense,’ he explained.

‘Many people are seeking an alternative pension plan and so we’ve listened to our customers in coming up with this new range. We offer a very personal service and always work hard to ensure potential property owners are able to afford to keep their investment, not just today, but should there be a change in circumstances,’ he pointed out.

‘This means we will look closely at the rental yield as well as the potential customer’s financial circumstances,’ he added.

For example, take a couple living in Germany where the husband works for a large international car manufacturer. At present, they don’t have a property in the UK. Although the husband has some pension plans in place, he’s keen to purchase a house which they can acquire rental income from and which will hopefully appreciate in capital value and provide a good investment for his retirement.

They want to purchase a house in Cardiff for £200,000. To be able to purchase this property through Skipton International with a mortgage of £150,000 (75% LTV), they will need an annual rental of £11,682 per year to cover the mortgage payments. If the rental was lower, a smaller mortgage would be available.

They will also need to put down a deposit of at least 25%, or £50,000, or more if the rent was insufficient to support a loan of 75% LTV). The property will then be rented out.

Prior to purchase, the property value and rental yield will be confirmed by a Skipton International surveyor and confirmation of the husband’s salary will also be needed, written in English.

The restriction on applications applies to expats living in countries which are regarded as unstable or dangerous, such as Afghanistan, Iraq, Iran and Pakistan. But they also apply to Arab countries such as Libya, Morocco, Egypt and Saudi Arabia. South Africa, Turkey, Northern Cyprus and Russia are also on the list.

There are also restrictions on the type of property that can be bought including Grade A and Grade 1 Listed properties, any properties affected by invasive plant species such as knotweed, flats over five floors with no access to a lift, former local authority flats with more than 5 floors or 48 units, studio flats and mezzanine flats.



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