First-time buyers (FTBs) are undeniably at the forefront of the UK Government’s agenda, and for good reason. By prioritising this demographic, the Government not only addresses housing affordability but also stimulates a much-needed boost to the economy.
Homeownership is a cornerstone of economic stability, fostering community ties and encouraging consumer spending.Â
In a significant shift aimed at supporting FTBs, lenders are beginning to relax their rules, opening doors that were once firmly shut. This change is particularly beneficial for foreign nationals looking to enter the property market.
Feedback from brokers indicates that there has been an increased difficulty finding suitable solutions for non-European economic area (EEA) clients. Traditionally, these buyers faced stringent requirements that often made homeownership seem out of reach. However, with lenders now adjusting their criteria, the landscape is becoming more favourable.
To support foreign nationals without indefinite leave to remain, settled or pre-settled status lenders adjusted their policies by lowering deposit requirements and increasing loan-to-value (LTV) ratios to as high as 90%.
They are also becoming more flexible on visa and residency requirements, with some lenders accepting applicants who have lived in the UK for a shorter period. Additionally, there’s been a reduction in minimum income thresholds, and some lenders are offering specialist products to cater to this growing market segment.Â
For mortgage brokers like us being foreign nationals ourselves, specialised in the foreign nationals market, this is a game-changer. It opens up new avenues for business as we can now cater to an expanded client base without indefinite leave to remain or settled status, seeking guidance in navigating these relaxed rules. We aim to continue expanding in the foreign nationals market in the UK, a sector in which we have already gained a significant market share.
Foreign nationals often bring diverse skills and investments that bolster various sectors within the UK. By easing mortgage restrictions, banks are acknowledging this contribution and enabling these individuals to invest in property, which in turn stimulates local economies.
Moreover, this change serves as an opportunity for mortgage brokers to expand their services and tap into new markets. With more flexible lending criteria, brokers can assist clients who may have been overlooked before, ultimately enhancing their business prospects.
Embracing this evolution in mortgage regulations not only fosters inclusivity in homeownership but also strengthens our economy by welcoming those eager to invest in their future within the UK.
Zita Latham is founder and senior mortgage and protection adviser at Zita Latham Mortgages
