As part of a video series exploring the expat mortgage market, Paul Roberts, senior account director at Family Building Society, said a “growth area” for the expat BTL market would be limited company business.
“I think you look at the number of people who are leaving and going to, perhaps, work or retire abroad, I don’t think that’s going to change – it may actually speed up a little bit with some of the opportunities that there are.
“You may see some reduction, perhaps, in just what we would perhaps call ‘accidental landlord’, where people decide not to keep the property in the UK when they do move abroad because of the changing landscape with the Renters’ Rights Bill and so on, but overall, personally, based on the enquiries I’m seeing, definitely an increase at this moment in time [in limited company BTL]. And, in fact, the Renters Rights’ Bill doesn’t seem to be putting people off,” he explained.
Family Building Society entered the expat limited BTL space in September, saying at the time that it was the “natural next step in the continual development of our BTL product range”.
Expats leaving at younger age but may come back sooner
Nathan Waller, business development manager (BDM) at Family Building Society, agreed that the “biggest area of growth would be in expat BTL and limited company especially”.
He noted that a key trend to be mindful of would be that when people are moving out a little bit earlier for work prospects, they may return earlier as well.
“It’s not just retirees that are at the end of their working life and are going and living abroad. There is an increase in those that are leaving earlier, maybe for job prospects, maybe for it being a little bit cheaper to live there, or they just want to go and enjoy life as soon as they can and maybe want to keep a bolt hole in the UK, either on a residential or BTL basis.
“What I would imagine what we’ll probably will see is where people are going earlier, you might then start seeing people come back earlier as well, where they’ve actually gone abroad and realise it is ‘not necessarily for me’ or ‘I’ve done what I’ve wanted to, I’ve ticked it off the bucket list’,” he said.
Waller said this was a typical dynamic with expats, as those who retire abroad can sometimes return to be closer to family, as an example.
“We are happy to look at those customers that may not have a live UK mortgage credit profile. They’re selling in France and coming back to the UK, but they’ve got good pensions that they can do a mortgage for, because depending where they’ve gone to, it might have been cheaper property there as well. So, actually, they’re moving from a cheaper country back to a slightly more expensive one, so they need a mortgage when they come back.
“Those, again, who have been abroad for a while maybe have put [their property]… onto a buy to let and want to come back to the UK and some lenders might be a little bit more restrictive about how soon they can look to take them, whereas we can look at it that little bit earlier,” Waller said.
For customers that are returning to the UK, he said the main things it would be checking are credit contacts abroad, whether they have a correspondence address in the UK and their current bank accounts for missed payments, bounced payments and so on.
“It’s a higher risk, so we’ve got to be a bit more cautious but, ultimately, as long as we can be comfortable with it, because we’re not using a ‘computer says yes or no’ approach, which most of the high street will be doing… it’s more ‘let’s talk’ and understand what you’ve been doing and let’s see what we can get as [a] worst case. Instead of three months [of records], we can always ask for a few more months if we really need to,” Waller added.
Watch the 14:30 video talking about the expat BTL market, chaired by Anna Sagar, deputy editor of Mortgage Solutions, with Paul Roberts, senior account director at Family Building Society, and Nathan Waller, BDM at Family Building Society.
