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Why brokers should be looking at the expat market – Oliver

by: Rob Oliver, director of distribution at Dudley Building Society
  • 10/07/2024
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Why brokers should be looking at the expat market – Oliver
If you’re a mortgage broker looking to diversify and explore new avenues, expat mortgages represent a fantastic opportunity.

A recent story on Mortgage Solutions mentioned that brokers were seeing a rise in expat enquiries, and we’re definitely seeing the same trend. 

People often think of UK expats as those residing in European countries, but we’re actually receiving a lot of interest from the United Arab Emirates (UAE). Many of these enquiries come from high-net-worth (HNW) individuals who are temporarily in the UAE for work. 

One moving company recently revealed it has seen a huge 420% increase over the last five years in enquiries from British nationals wanting to relocate to the UAE. This trend was particularly noticeable in the past 12 months, with John Mason International Movers reporting a 45% surge in enquiries. 

Its research also found a 50% year-on-year rise in online searches for “move to Dubai” and “jobs in Dubai” from people in the UK. According to the Expat Insider 2023 report, there are currently more than 240,000 British expats living in Dubai alone, along with over 5,000 British companies operating in the UAE. 

The UAE is ranked as third among the top destinations for expats around the globe, with the lifestyle and good job prospects cited as some of its most appealing features. 

We’re currently seeing more demand from expats in the UAE than in European destinations like France and Spain. 


Dubai is calling

Cities such as Dubai not only offer better weather but increasingly provide exciting job prospects, whether in common sectors such as finance, banking and tourism, or in emerging markets like renewable energy. 

Even if expats don’t know exactly when they’ll be back on UK soil, they see the UK as a great investment opportunity. This could be through buy-to-let (BTL) properties, holiday lets, or simply having a home for their family to return to. 

There’s a perception that HNW borrowers always go to private banks, but that’s not the case. Building societies like ours see strong demand in this area too. 

Expat mortgage cases tend to have many parts, with foreign income being one of them. Recently, we helped a British couple who had moved abroad and wanted to keep their family home but needed financing of 80% loan to value (LTV). Since they would be renting out their former home, the best option was a BTL mortgage. The main wage earner was a contract worker paid in local currency. Because they were living in Dubai, there was no income tax on earnings.

By assessing each case individually and considering affordability rather than just salary, we were able to assist this couple. 

With a few exceptions, building societies are generally the go-to place for expat borrowers. This is because such lenders can offer a more personal approach to underwriting. As seen in the example above, expat cases require a human – not a computer – to be involved in the underwriting process to fully understand the borrower’s financial situation. 


Within a broker’s capabilities

For mortgage brokers who haven’t advised on an expat mortgage before, it’s easy to see why they might feel unsure in this area. But we’re seeing a growing number of brokers gain confidence when it comes to advising on and recommending expat mortgages. 

Even though a borrower might be based overseas, they often contact UK brokers when arranging their mortgage. It could even be a former client whom you’ve advised previously and who has since moved overseas.

While expat mortgages can be a bit more complex than some mortgages, they are definitely within a broker’s skillset. 

A borrower’s wage in a foreign currency might initially throw some brokers off, but many of the same principles apply as they would with a UK-based borrower. Lenders like us are happy to assist brokers when it comes to the documentation needed. 

As we move further into 2024, I fully expect that we will continue to see a strong demand for expat mortgages, especially as we are in an election year.

Elections can be emotive events for individuals and businesses, and a change in government can often signal a time of personal change for some and we may see this factor into some borrowers’ decisions to relocate this year. 

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