Over two months ago we launched a new proposition to help foreign nationals looking to settle in the UK obtain a mortgage. Why? Because the need to better support under-served segments of the market is central to our purpose as a forward-looking building society.
In speaking to brokers, it was clear that supporting foreign nationals to become homeowners in the UK is typically an incredibly difficult process.
Thanks to the partnerships we have with our broker network, the evidence – through criteria searches – clearly showed us why there is growing need for a mortgage solution to serve this segment of the market.
Foreign nationals have historically been expected to meet numerous requirements, such as having a minimum income of over £50,000 or a built-up credit history in the UK, despite not living in the country. The open dialogue with our broker teams spotlighted how this was clearly a major barrier for people from abroad looking to get a mortgage.
In a world where we expect skilled people from abroad to plug skill gaps in key sectors like healthcare and IT, a process that makes it harder for them than others to take that first step onto the property ladder feels like an unfair trade off. It’s not exactly a challenge that is showing signs of going away either; the Home Office projects that over half a million ‘in-country’ visas will be granted to foreign skilled workers by 2028-29.
So, with over two months under our belt and many conversations underway with borrowers from abroad, I’m delighted to see such a positive level of engagement with our foreign national mortgage proposition.
There have already been 33 different nationalities express interest in our product, with the majority coming from Indian, Nigerian and Pakistani nationals, as well as a wide range of potential borrowers from countries as diverse as Afghanistan, Brazil and Sri Lanka. We’ve also seen mortgage applications from all regions in the country, including Wigan, Swansea and Dartford.
Critical to ensuring we were able to effectively check the credit history of these applicants is our partnership with Nova Credit to implement their unique cross-border credit technology, Nova Passport. Nova is able to obtain credit histories from many overseas territories, which is evident in the range of nationalities showing interest.
With a higher than expected average loan size and a lower loan-to-value (LTV) overall, we have been delighted with the quality of applications so far. The time to convert decisions in principles (DIPs) to applications is also encouraging evidence that the process is working smoothly, and we’re already helping people from abroad to borrow money and make that all important first step on to the property ladder.
This is only the beginning though. A fundamental plank of our purpose as a modern mutual is to look for ways to break down the barriers that exist to homeownership and introduce innovative ways to help more people secure a mortgage.
We are delighted it’s been such a positive start and there is so much more to come. We want to continue evolving to meet the demands of people moving into the country, not just as a place to earn money but to settle long-term, put down family roots and make the UK their home.
Alison Pallett is sales director at Nottingham Building Society
