For those looking to secure a foreign national mortgage or expat borrowing, there are a greater number of products available, and some rates are even dropping.
The options in the foreign national mortgage market have been opening up in recent years. Investors from overseas are now able to choose from a wider range of products, and certain lenders are even dropping their rates, despite volatility in parts of the mortgage sector.
Mainstream lenders in the UK, such as Natwest, HSBC and Barclays, offer mortgage options for overseas buyers. Buyers are not required to hold a British passport to secure these, although each lender has their own stipulations.
Nottingham Building Society has just cut rates to its foreign national mortgages and products for returning expats by 0.10% on its five-year fixed deals. The building society has also recently introduced a 85% loan-to-value tier rate for foreign nationals.
Alison Pallett, Nottingham Building Society sales director, states: “We understand the diverse challenges faced by our customers, whether they are returning expats looking to establish a home back in the UK, skilled workers from abroad seeking to build a career and invest in their future, or UK residents navigating the complex home ownership journey.”
Mortgage market impacting the UK property market
UK inflation has finally hit the Bank of England’s 2% target as the UK economy continues to look more positive. Despite this, the Bank still held its base interest rate at 5.25% once again, which is where it has sat since August 2023.
With volatile swap rates, affordability in the mortgage market may not have improved as much as hoped at this point. However, there is still optimism on the horizon for interest rates as they are expected to fall in August, which could lead lenders to bring their mortgage rates down.
This could further boost demand in the UK property market, as it remains one of the most stable investment spaces globally. Even in light of political uncertainty with the looming general election, the sector has continued to prove its resilience and huge appeal among buyers and investors.
In recent years, the weaker pound has also led to a favourable exchange rate with the US dollar and other currencies. This means that buyers have essentially been securing a discount on purchases compared to when the pound was performing more strongly.
Securing a foreign national mortgage
For most overseas buyers, including US investors, there aren’t legal restrictions to owning property in the UK. However, there are some regulations and rules that investors must be aware of when obtaining a foreign national mortgage.
Different lenders will have a range of varying stipulations based on your individual circumstances and residency status, so some foreign investors have to overcome multiple hurdles that are put in place by lenders.
For starters, buyers looking to obtain a foreign national mortgage will need to open a UK bank account if they haven’t already. They will also need to go through similar credit score checks to British nationals. A higher deposit is also often required for these specialist mortgages.
To help ensure the process of securing a foreign national mortgage goes smoothly, it’s recommended to work with a reputable broker. And keep in mind that you may need a UK visa or residency to live in or visit your UK property.
For more information about visas, visit the UK government’s website, or speak to a specialist lender or broker about how to apply for a foreign national mortgage.
If you’re an overseas buyer or investor looking to invest in property in the UK, let BuyAssociation help you find the ideal property investment opportunity. Get in touch for more information on how to invest in the UK.
