Brit expats buying into new build UK homes at risk of losing deposits

Published:  28 Aug at 6 PM
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British expats looking to purchase new-build property in the UK are being warned over the risk of lost deposits.

UK expats thinking about investing in a new-build British property are now being warned they risk losing their deposits should they need to pull out of the deal. Typically, 10 per cent deposits are now required on newbuild British homes, with strict rules on how or if at all deposits can be repaid should the deal fall through. Typically, if buyers are not able to proceed, some or all of their deposits are deemed non-returnable. The main reason for pulling out would seem to be the unavailability of expat mortgages on new-build properties.

Expat buy-to-let mortgages often depend on the country of residence of the applicant rather than on salaries and deposits as is normal for UK residents. Another problem is the shrinking numbers of banks offering mortgages to expat Britons, most of which refuse to consider loans on new-builds to be used as buy-to-let investments until expat purchasers return to the UK on a permanent basis and take up residence. It’s bad news for British expats in Europe who’re selling their overseas properties and returning to the UK due to Brexit, with many of those who’ve already found buyers left fighting to get a house to move into on their return.

One retired UK expat living in France had found a buyer for his home and placed a 10 per cent deposit on a new build property in the Midlands against his planned return to Britain. Due to an error by the French estate agent, the French sale failed, leaving him exposed. Due to his low income and age, he was unable to get a mortgage on the new-build, and lost a large percentage of his 10 per cent deposit as a result. The moral of this sad tale is two-fold – either remain an expat and hope Brexit isn’t a total disaster or ensure you have an agreement on a mortgage before you commit your personal funds to a deposit, as circumstances may change and you may need to prove you have funds before you can complete the purchase
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