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Packager Power

With about 260,000 UK citizens owning property abroad, overseas investment is becoming more important to brokers. Can packagers get involved? Will EU legislation help the process when countries still operate different models?
Bill Dudgeon is managing director of DB Mortgages

CHRISTINE HAYDON, director, Simply Mortgages

There’s no doubt there is a growing trend for Britons to own property ab-road, predominately in Europe. The increase in low cost air flights has encouraged demand and with cheap-er interest rates available abroad, overseas investment is an attractive proposition.

With first-time buyers struggling to get on the property ladder here and buy-to-let margins being squeezed, some of the cheaper, less established European countries offer clients viable alternatives.

But with language difficulties and legal requirements different from our own, it’s not for the faint-hearted. I can’t see EU legislation changing this in the short term.

A lot of research is required be-fore purchasing property abroad and legal advice should be sought to avoid problems. Brokers are best placed to assess the requirement for specialist help.

Already we see some companies specialising in this type of broking, but as far as I’m aware packagers haven’t started to distribute such products. However, it’s only a matter of time.

The creation of specialist lending panels for brokers adds value for them and their clients. Overseas in-vestment suits the specialist products that have remained the domain of the packager market.

Packagers that push the product boundaries and link up with specialist providers could find themselves ahead of the competition.


MATTHEW ARENA, managing director, Exclusive Connections

The overseas market is relevant to packagers. They specialise in unusual or complex cases and overseas mortgages fit this category.

Brokers who don’t specialise in this market are unlikely to be able to provide credible guidance across a number of countries and are likely to seek assistance on behalf of clients.

Packagers have been the traditional first port of call for brokers in these circumstances and as they aggregate cases they can invest the resources required to become experts in the field.

While EU legislation will have a long-term impact on overseas property transactions, the short and mediumterm effects are expected to be minimal because national variations in legal and financial processes are unlikely to disappear overnight. Once again, this shows that access to specialists is crucial for brokers.

But is it that simple for packagers? With existing staff focussed on the UK market, to become an overnight expert in overseas property is impossible. Some packagers have white-labelled overseas solutions – a quick-fix method requiring little investment but one that risks packagers’ reputations due to their reliance on third parties.

Packagers braving direct investment will need to ensure they have the resources and expertise to ensure their propositions meet the expectations of brokers.

Both strategies have their risks, but can packagers afford not to get involved in this lucrative and strategically im-portant market? No, they can’t.


MARTIN POWELL, managing director, Mortgage Administration

Overseas property investment is a trend that packagers can get involved with on two levels.

First, there are a large number of clients who are releasing equity in their homes here to raise the money to buy abroad. This will require specialist mortgage products such as self-cert deals or even chequebook facilities.

As the overseas market grows, the need for packagers will increase due to the complexities of property titles in many countries. This is because it’s faster, easier and cheaper for lenders to educate a few packagers with new products than to train every broker in the country.

As there are already a number of UK lenders that will lend on overseas property, I can see this becoming a niche market.

Here’s where brokers can add value. It therefore makes sense for packagers to use their entrepreneurialism to ensure they exploit the opportunities.

I know some packagers are al-ready rethinking their panels to do this – just look at this year’s Mortgage Expo in Manchester, which had nearly a dozen stands dedicated to purchasing property abroad. This is a sign of the way the market is developing.

So will overseas property become the new buy-to-let? I don’t think so, but it will become a fresh niche and part of an increasing number of brokers and packagers’ business in the future.

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