Brokers are finding it increasingly difficult to secure finance for non-UK residents with new data pointing to a sharp fall in lender appetite for overseas applicants and growing concern over currency volatility.
A survey of 300 UK-based brokers, commissioned by prime London lender Butterfield Mortgages, shows that 93% have worked with overseas clients in the past five years, highlighting sustained international demand for UK property.
Yet almost all respondents (98%) say arranging finance for these clients is now challenging, with more than one in ten describing the process as “extremely” difficult.
The findings suggest a tightening in specialist lending capacity at a time when overseas buyers remain an important constituency for the UK housing market, particularly in London’s high-value postcodes.
REDUCED RISK APPETITE
Brokers cite a combination of reduced lender risk appetite, more intensive due diligence requirements and structural obstacles such as the absence of UK credit histories.
A third of brokers surveyed say the single greatest obstacle is that too few lenders are willing to take on international borrowers.
Almost as many highlight the impact of currency movements on the affordability of long-term loans.
Others point to the difficulty of verifying income and assets held abroad, as well as divergent legal and regulatory frameworks in borrowers’ home jurisdictions.
MAJOR STICKING POINT
Alpa Bhakta, CEO of Butterfield Mortgages, 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.”
