Expat aimed mortgage famine causes problems for returnees

Published:  11 Sep at 6 PM
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Expats planning on returning to the UK after a working stint overseas are falling foul of lenders who refuse to grant mortgages until they’ve been home for several years.

The mortgage companies’ stance is connected with the fact that expats who’ve been abroad for number of years no longer have a financial track record in the UK. It’s bad news for British citizens who’ve chosen to work abroad in order to save a large enough deposit to enable them to climb onto the housing ladder.

Mortgage lenders invariably check applicants’ credit history using reference agencies, as the normal three years’ residency checks don’t apply to expats. According to mortgage broker London and County’s director David Hollingworth, lenders should be looking instead at individual cases and borrowers’ circumstances.

Expats who’ve maintained a bank account and credit card with a British bank may be able to get a mortgage within a short time of their return, although lenders in general don’t have identical sets of criteria for mortgage approvals. Woolwich, for example, requires UK or EU citizens to live in the UK for at least two years, and Nationwide insists on coverage of all addresses for all parties over the past three years.

Most lenders have abandoned the expat mortgage market, so there’s little chance of buying a British property whilst still living overseas, although a large deposit and an equally large income does help. Some lenders are more relaxed about expat buy-to-let-investments, giving a chance to purchase a property and get a financial footprint in the UK before returning.

Long-stay contract staff returning to their country of origin may find that, by the time they’ve established a credit record in the UK, three years of paying exorbitant rents may leave their deposit funds in a sad state. The buy-to-let option is also risky as it involves getting tenants to leave by the return date, with full possession perhaps invalidating the mortgage.
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