Speaking as part of a Family Building Society video series, Nathan Waller, business development manager (BDM) at the firm, said there’s a “little bit of an enhanced due diligence” for brokers to consider if they are dealing with countries abroad.
However, he said expat business can often lead to “good referrals”, even if in some cases there are time differences that need to be managed.
“Making sure that from a broker’s perspective, they’re aware of the customer, who they are, what they’re doing, also making sure that they’re complying with their own kind of network’s compliance and things like that as well, and making sure that they are doing their due diligence,” Waller said.
Exchange rates and property prices possible headwinds for expats
Looking at potential headwinds, Paul Roberts, senior account director at Family Building Society, said a main headwind for expat residential clients was what exchange rates were doing and how that was going to impact affordability.
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“I think as a lender, you’re constantly having to evolve your thought processes around… are we going to stress test it? How? How harsh are we going to stress test it out?” he added.
Roberts noted that in the UK property markets at the moment, “supply and demand is driving property prices still upwards at this moment in time in most areas”.
Waller said it reviewed its countries on a regular basis to evaluate risk, but it used packager connections that are “deemed at a slightly higher risk”.
Not credit scoring lets expat cases be viewed on ‘individual’ basis
Roberts said a crucial difference with Family Building Society – and other small building societies – was that it didn’t credit score its clients, so it could “look at each case on an individual and a holistic basis”.
“The minute you start credit scoring, it will have some impact on whether those clients are deemed the right risk level. Often, the smaller building societies are a little bit trailblazing in some of these areas, because we can look at the case on an individual basis, rather than using a computer model to decide what to do,” he said.
When asked about what potential growth areas would be in the future, both Roberts and Waller pointed to expat limited company business as well as expat residential business from people returning to the UK earlier.
Watch the 17:38 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.
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