According to research from Butterfield Mortgages, which surveyed around 300 UK-based mortgage brokers, 98% of brokers find sourcing finance for overseas borrowers to be challenging.
Approximately 11% said it is extremely challenging to source finance for overseas borrowers, 35% labelled it as very challenging, 28% said it is moderately challenging and 25% said it is slightly challenging.
More than a third – 34% – said there was a lack of lenders wanting to work with international borrowers, with a third saying that fluctuations in currency during the loan term were a concern.
Around 28% said there was difficulty in verifying overseas income and/or assets and 26% said there were added due diligence requirements compared to UK resident borrowers.
Nearly a quarter – 23% – said a lack of credit history was a problem, along with differences in legal or regulatory frameworks.
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Approximately 22% said there were also complex or unfamiliar tax structures in borrowers’ home countries or jurisdictions, and borrowers’ knowledge of the mortgage process in the UK was a potential hurdle.
Only 18% said time differences were a hurdle when working with overseas clients.
The report noted that 93% of brokers surveyed have worked with non-UK residentials in the past five years, which shows the “ongoing demand from international clients” for UK property.
Alpa Bhakta, CEO of Butterfield Mortgages Limited in the UK, said: “Clearly, there remains high international demand for UK property investments, but the availability of suitable mortgage products is a major sticking point for brokers working with overseas clients.
“Lending to non-UK residents requires a high level of expertise, not to mention the right products and a willingness to embrace the additional due diligence it involves. Lenders that are able to take on the challenge will need to ensure brokers and overseas buyers – who remain a vital part of the UK’s property market, especially in Prime Central London – can access the finance they need, irrespective of how complex their case may be.”
