Overseas mortgage enquiries boosted by weak pound

Photo: Images_of_Money

Overseas mortgage enquiries are on the up in the UK, boosted by the weakened pound.

Mortgage enquiries from overseas buyers and British expats are up 45 per cent in Q4 2016, according to deVere Mortgages, compared to the previous quarter.

The organisation, which is part of deVere United Kingdom and deVere Group, offers advice to British expats and foreign nationals looking to buy property in the UK.

While the UK is experiencing a shifting political and economic landscape, deVere Mortgages has received an “unprecedented level” of enquiries this last quarter.

“There has been a remarkable uptick in home loan enquiries in Quarter 4 – and we’ve not yet even finished it,” says Mitch Hopkinson, Head of Advice and HNW and deVere United Kingdom. “To analyse these findings, first it should be acknowledged that they are more astonishing given that the government’s change in tax policy regarding Buy to Let in recent years was expected to severely dampened overseas investor interest.

“Also Brexit appears not to have dented the UK’s traditional boast of being an attractive country for those residing overseas, largely due to the ongoing fundamental strengths of British residential property investments.”

Sterling’s weakness, Hopkinson suggests, is partly a driving factor, with the currency’s favourable exchange rates having “effectively put a ‘for sale’ sign up for the many overseas investors who want to establish a presence in the UK”.

“Another reason to buy now is that UK sterling mortgages have probably one way to go now: up. Record low mortgage rates are being pulled as sterling funding costs go up for the banks and other lenders, reflecting the increased risk of inflation in the economy,” he adds.

deVere Mortgages says the vast majority of overseas buyers are foreign nationals and British expats in the Gulf Region and East Asia.


RBS and NatWest stop lending to expats

12th May 2016

The Royal Bank and Scotland and NatWest have announced that they will no longer offer mortgages to expats.

The lenders announced the change this week, with the suspension of loans to expats set to take effect from 19th May – giving brokers just one week to submit any applications. From that point on, applicants must be resident in the UK to be eligible for a mortgage with either NatWest or RBS. This will also apply to existing expat customers who want to borrow more.

The lender told Mortgage Strategy: “We regularly look at the demand for our products from customers and balance this with the costs and complexity of providing them safely to customers. In this context we have come to the decision to stop offering new lending to expat customers.”

The Guardian speculates that the change is a result of the new European regulations on home loans, which come into force on 21st March 2016, making the process more complex for lenders.

Expat mortgages were once commonplace, but have gradually dried up over recent years. In 2012, Lloyds Banking Group suspended expat mortgage services.

Mortgage broker Enness Private Clients tells the newspaper: “It is very disappointing to see yet another high street powerhouse turn its back on hard-working British expats. We suspect this is as much a function of too much business coming its way as a result of the steady stream of lenders closing their doors – probably compounded by the effects of the European mortgage credit directive in March.”

Nonetheless, demand remains strong, with financial consultants at the deVere Group saying last year that interest from overseas-based clients had risen in recent years. In response to the demand, deVere United Kingdom launched a new, standalone brand to drive further in to the mortgage market: deVere Mortgages.