Expat demand is high, but where are the lenders? – Ganatra

by: Hiten Ganatra, managing director of Visionary Finance
  • 06/10/2020
  • 0
Expat demand is high, but where are the lenders? – Ganatra
In all the column inches written across the trade press over the last six months, I am yet to see anyone discuss the lack of funding options for expats or foreign nationals.


The lack of funding contrasts with a surge in demand, which is heightened by the savings provided by not only the stamp duty holiday, but also by getting ahead of the stamp duty surcharge of two per cent for overseas buyers coming in on all purchases from 1 April 2021.

It may not feel like it to us who live permanently in the UK, but compared to many other countries, the UK’s economic and financial stability, despite Covid-19 and the uncertainty around a no deal Brexit, is very attractive to foreign investors and expats.


Surge in demand

Evidence of this demand has been echoed by data from Legal & General’s SmartrCriteria tool, which reported that in July searches related to visas were ranked as the most searched term.

Throughout July, mortgage searches for ‘expats not in the UK’ also featured in the top 10 search terms, while a search combination of ‘expat not in the UK’ and ‘foreign income’ remained in the top five searches.

According to the data, one in every 22 of its residential searches was for a query relating to an applicant currently on a visa or an expat not based in the UK.

In addition, SmartrCriteria searches related to applicants on a visa showed a 146 per cent increase for buy-to-let searches, as well as 97 per cent rise for residential criteria enquiries since May 2020.


More lenders needed

Unfortunately, the surge in demand has not been matched by an increase in lending options.

This is despite the likes of NatWest and Skipton International plus Gatehouse Bank continuing to provide excellent options for foreign national and expat buy-to-let investors.

However, these lenders have reflected their position as a limited few by increasing rates, so increasing their margins, which gives an indication to other lenders of the opportunities available in this space when margins are being squeezed elsewhere.

The lack of funding options is being exasperated at times by inconsistencies with surveyors on new builds and because of the lack of lenders available, only certain surveying firms are able to be used.

So it is difficult to get different opinions and outcomes which again is limiting the ability to write these types of loans.

Therefore, my final call is to any lender seeking to increase margins and tap into a less competitive space to come and talk to us.



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