Skipton International launched its expat buy-to-let mortgage range last year. The bank has decided to extend its criteria to retired expats following feedback from its customers.
British retirees living abroad with a minimum pension income of £40,000 and up to a maximum age of 70 will be eligible to apply for a buy-to-let mortgage for a property located in the UK.
Ian Gray, senior partner at Large Mortgage Loans, said lenders’ interest in expat buy-to-let mortgages had begun to gain momentum.
“It’s a growing sector,” said Gray. “Lenders such as Skipton International are filling a big hole left after the credit crunch by the main banks as they closed ranks and stopped lending to all but the most low-risk domestic applicants.”
Most expat lenders will only lend if the applicant is working for a large multinational firm such as a large bank or law firm and happen to be stationed abroad.
Gray said he could understand why banks hesitate to lend to self-employed expats because the accountant which the lender must rely on can be hard to verify. He added that accounting principles differed between countries and not all accountants adhered to the same standards. But, said Gray, pension income was a lot more relaible.
“Those expats who have a pension income, whether it’s from a traditional UK pension, or from private SIPPS or investments, have an extremely stable flow of income,” said Gray. “We never understood why a lender would feel this is a higher risk income than, for instance, a salary from Goldman Sachs for a Brit working in New York. The pensioner’s income is arguably a lot more predictable and stable, but most expat lenders won’t do a buy to let for that pensioner.”
Gray said Skipton International’s move will be welcomed by the broker and consumer markets alike.
In February, Axis Bank UK announced its plans to launch a specialist buy-to-let range which includes mortgages for expats, specifically for properties in London and the South East up to a maximum loan-to-value of 75%.
