Mortgage brokers are facing mounting difficulties when arranging finance for overseas clients, with limited lender appetite emerging as the most significant barrier, research from Butterfield Mortgages has revealed.
The survey of 300 UK-based mortgage brokers, conducted by Censuswide, found that 93% have worked with non-UK residents in the past five years, demonstrating continued demand from overseas buyers seeking to invest in UK property.
However, 98% of respondents said sourcing finance for international borrowers is challenging.
11% described it as “extremely challenging”, 35% as “very challenging”, 28% as “moderately challenging”, and 25% as “slightly challenging”.
When asked to identify the main difficulties, 34% pointed to a lack of lenders willing to work with international borrowers.
Concerns about currency fluctuations were cited by 33%, while 28% highlighted the difficulty of verifying overseas income and assets.
Other issues included increased due diligence requirements, lack of UK credit history, differing legal frameworks, varying tax structures and borrowers’ familiarity with the UK mortgage process.
Alpa Bhakta, CEO of Butterfield Mortgages Limited in the UK, said: “Clearly, there remains high international demand for UK property investments, but the availability of suitable mortgage products is a major sticking point for brokers working with overseas clients.
“Lending to non-UK residents requires a high level of expertise, not to mention the right products and a willingness to embrace the additional due diligence it involves.
“Lenders that are able to take on the challenge will need to ensure brokers and overseas buyers – who remain a vital part of the UK’s property market, especially in prime central London – can access the finance they need, irrespective of how complex their case may be.”
