View more on these topics

Comment: Expats need mortgages too

Aaron-Strutt-700.jpg

NatWest’s withdrawal from expat mortgages is a blow but also an opportunity for others, as long as terms are reasonable

Even though NatWest had been talking for years of pulling out of the expat mortgage market, its recent withdrawal still came as a bit of a shock. Applications may have been time-consuming and often problematic but they were generally worth the effort. The bank provided British expats across the world with incredibly low rates and the opportunity to purchase homes to live in on their return.

When Halifax and Scottish Widows stopped offering expat mortgages, there was concern the market would not recover. But while NatWest’s withdrawal is a blow, it presents an opportunity for other lenders. Indeed, some building societies are very pleased it is pulling out. They know they have a real opportunity to attract a range of well-paid and often cash-rich borrowers who do not like to miss mortgage repayments. After NatWest’s withdrawal, more expats will need to purchase a property as a buy-to-let and refinance it to a residential if they want to live in it when they return home.

When brokers seek a lender for a mortgage application, one of their first actions is to find out where the client lives and works. Some lenders, such as Together, do not seem to have a list of unacceptable countries but others, like Skipton International, do. It has just reduced this list and now lends to expats in Colombia, Costa Rica, Ghana, Mongolia, Northern Cyprus, Senegal, Sri Lanka, St Vincent and the Grenadines and Turkey.

I have spoken to a couple of well-known lenders that are considering re-entry to this market. They understand there are healthy profit margins but, if they do return, their terms must be reasonable. Some current mortgage rates and arrangement fees seem rather expensive and put expats off.

Aaron Strutt is product and communications manager, Trinity Financial Group

Recommended

Robert-Sinclair-700.jpg

Broker numbers reaching crisis point as volumes rise

The shortage of brokers is nearing a tipping point following an upswing in business, say experts. Association of Mortgage Intermediaries chief executive Robert Sinclair says things are “getting tight” and that soon there will be too few brokers to deal with increasing business levels. Looking at Council of Mortgage Lenders’ latest figures, £62.5bn of loans […]

John Heron

Paragon increases lending by 85%

Paragon Mortgages increased its lending 84.5 per cent year-on-year in the first six months of 2016. The buy-to-let specialist lent £823.6m in the first half of the year, compared with £446.2m in the same period of 2015. It says the increase was down, in part, to an increase in activity as landlords looked to beat […]

barclays-building-2012-700x450.jpg

Barclays set to increase B2L rental coverage ratio

Barclays is set to become the latest lender to increase its rental cover requirements. From 26 May, the lender will increase its rental coverage ratio from 135 per cent to 145 per cent. However, the lender will continue to carry out an income and expenditure assessment to see if borrowers can use their earnings to […]

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • Anthony Burke 19th July 2016 at 12:49 pm

    If NC plans to fill the void left by NatWest UK for residential UK properties with expats lets hope the underwriting procedures and staff are planned out well. Expat brokers will be lining up to pass them business.