Expats urged to protect against new-build deposit loss

Published:  14 Oct at 6 PM
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British expats living overseas and investing in a new-build UK property are being warned they may lose their deposits.

Whether the purchase is for investment purposes or because the buyer is returning to the UK after living overseas, expats are at risk of losing their initial deposits if they’ve decided on a new-build property. Typically, developers will expect a 10 per cent deposit linked to strict rules as to how or even if the deposit can be redeemed should the sale not go ahead. Nowadays, increasing numbers of would-be expat buyers are losing all or a percentage of their deposits after having to pull out of the deal for good reason.

For expats looking for a mortgage on a new-build home, it’s more difficult than for UK resident citizens as there are far fewer lenders willing to advance funds to Brits working overseas, and those who do lend to expats are choosy as regards the countries in which borrowers are living. In addition, many will not lend to expat purchasers of new-build properties, leaving those affected with nowhere to turn for a mortgage.

One unfortunate expat living in France and planning to move back to the UK had put his French home on the market and placed a 10 per cent deposit with the builder of a new estate in the Midlands. Sadly, the sale of his French house fell through due to the buyer not having been properly vetted by the real estate agent and, due to the expat’s age and low income, no lender would finance the deal. As a result he was forced to pull out and lost a considerable amount of his deposit as a result.

At this time, with Brit expats overseas considering relocation to the UK due to the strong possibility of losing all rights due to Brexit, those looking to buy a new-build in the UK should ensure they can get a mortgage before paying a deposit up-front to the developer, even if it isn’t necessary. Otherwise, should your circumstances change for any reason, you may need to prove you’ve the necessary funds for the purchase.
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