Helping expats to gain, maintain or extend their foothold in the UK property market

The BTL lending landscape remains challenging for sections of the landlord community but it’s also one which will provide pockets of opportunity along the way for landlords, investors and developers who continue to demonstrate their entrepreneurial spirit.

This was highlighted in the latest Lendlord’s UK Landlord Survey which showed that 38% of landlords are looking to expand their property portfolio over the course of the next 12 months. Turning its attention to how investors plan to fund these endeavours, 40% said that they intended to leverage existing equity in their portfolio, while 35% would consider taking out a new mortgage or loan. Meanwhile, 25% of investors were open to partnering with others to achieve their property ambitions.

While those active landlords are likely to be heavily engrained with the UK BTL landscape, there are more existing and potential landlords operating from beyond the UK border who are also keenly eyeing this market in 2024.

This comes on the back of a relatively positive end to 2023 from both a market and economic perspective. Indeed, late November saw Offshoreonline, an online mortgage adviser for expatriates, note a ‘significant’ upswing in expat mortgage enquiries, attributing this to the Bank of England’s decision to hold the UK Base Rate steady in November. At the same time, a straw poll of estate agents revealed a steep rise in enquiries during the second week of November, indicating a growing interest in the UK expat buy-to-let market and house buying in general.

The expat market is an interesting one. In 2022, 90,000 British citizens were reported to have moved abroad to work and around 560,000 people left the UK to live abroad long-term. This helps demonstrate the vast number of people who are working and living overseas for varying timeframes, many of which are existing UK homeowners. For those that aren’t, a good proportion may be looking at their native market with a view to moving back in the not too distant future, housing their children through higher education or supporting them in their early working years, planning to pass down property in the future or as a part of a retirement/investment plan. Whatever the reason, they are reliant on the UK lending community to provide access to a range of options which can help meet their ever-changing needs.

We first introduced our buy-to-let expat offering back in 2020 following substantial due diligence and extensive intermediary feedback. Four years on, this remains a somewhat underserved area of the BTL market and this is largely the case due to the fact that it requires a specialist approach from lenders who tend not to rely solely on an automated decision-making processes, with manual underwriting key to ensuring that all risk and compliance boxes are ticked.

Inevitably, eligibility criteria will vary from lender to lender. Having said that, as a more general rule of thumb, borrowers in this domain will usually require a UK bank account/credit history and lenders will give consideration depending largely on which country the borrower currently resides and how the property will be managed.

It’s been a clear positive to more expat BTL products and propositions emerge in the early weeks of 2024 and, with the advice process proving so crucial in such a complex product area, it’s clear that building stronger links and connections with lenders who are specialists in this niche area of the BTL market will help open more doors for expats to gain, maintain or extend their foothold in the UK property market.

David Lownds is head of products and marketing at Hanley Economic Building Society