Lloyds withdraws from expat mortgage market

by Ray Clancy on November 9, 2012

Very few lenders offer mortgages to expats returning to the UK

The chances of British expats getting a new mortgage when they return from working abroad has reduced after Lloyds Banking Group suspended its expat product.

It confirmed that it is no longer accepting new mortgage applications or further advances from applicants living abroad. Existing expat customers won’t be affected.

It is a second blow for those banking with the bank. A few months ago it decided to stop lending to overseas borrowers through its Lloyds TSB International brand.

‘Lloyds Banking Group is undertaking a review of its mortgage proposition for expat customers. Whilst this review is ongoing, mortgages and further advances will not be available for new applications from expat customers,’ a Lloyds spokeswoman said.

She added that expat applications currently account for less than 1% of applications and so is a small part of its business.

Only a handful of lenders offer mortgages to expats returning to the UK, so the removal of Lloyds from the market will significantly limit borrowers’ options.

Halifax, part of Lloyds Banking Group, would previously lend up to 75% of a property’s value to expats on the basis that the borrower returned to the UK within three years. It allowed the property to be rented in the meantime.

Aaron Strutt of mortgage broker Trinity Financial said that Lloyds exiting the market was a blow for expats.

‘There were never many lenders offering expat mortgages and Lloyds was often the first port of call for brokers,’ he said.

Connect Overseas, an international mortgage specialist, said it is receiving an increased number of enquiries from brokers who have expat clients looking to buy or remortgage property in the UK.

‘With the withdrawal of the Lloyds Banking Group from the expat market, intermediaries need to know there are still plenty of alternative sources,’ said Geoff Simmonds, head of operations at Connect Overseas.

‘Currently, we can offer finance solutions for expats who have just left the UK or have lived abroad for up to 35 years. They can be first time landlords and we have deals for employed and self employed clients up to the age of 80, with finance options up to 80% LTV,’ he explained.

‘We believe expat mortgages is a growing business segment and intermediaries can take advantage of our expertise in this area either through the Connect Overseas Pro system or by speaking to one our specialist in house advisers,’ he added.

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