Specialist advice key for international buyers navigating complex requirements
The UK mortgage market for foreign nationals is experiencing notable growth, with brokers reporting increased enquiries and a gradual easing of lender restrictions.
While motivations for purchasing property in the UK vary, the desire for homeownership, investment opportunities, and long-term security remain key drivers.
“For those who have recently come to the UK the same reason most people do – they want to own their own home instead of renting” said Oliver Woodason (pictured top left), founding director of Woodason Financial Services.
“They see the UK as their new home and naturally want to put down roots – what better way than a mortgage! For those investing in UK property, I find the main motivation is that the UK is seen as relatively stable compared to where they currently reside.”
Like Woodason, other brokers specialising on these mortgages have observed a steady increase in demand from foreign nationals, both for residential and investment purposes.
“There has been an increase in the number of foreign nationals, and this has hasn’t gone unnoticed in the market,” said Louis Levine (pictured top centre), senior mortgage broker at UK Expat Mortgage. “This has been spurred through geopolitical risk and increasing affluence in previously developing countries.”
Challenges foreign nationals seeking mortgages face
Despite the growing interest, foreign nationals continue to face a range of challenges when seeking mortgages. These include higher deposit requirements, limited credit history, and restricted access to certain lenders.
“A foreign national (resident in the UK) is going to face loan-to-value restrictions with some lenders, and they are likely to have little or no credit history,” Levine said. “A foreign national resident abroad has very limited options, even if they hold indefinite leave to remain. You face restricted access unless you have a British or Irish passport.”
The process is further complicated by legal and regulatory nuances, particularly regarding the source of deposit funds and international financial regulations.
“Often with deposit funds originating outside of the UK some extra due diligence and appropriate documentation may be required for source of deposit funds by the lender, solicitor and advisor,” said Ross McMillan (pictured top right), owner of Blue Fish Mortgage Solutions.
Currency fluctuations typically have limited impact, as most applicants earn or generate income in Sterling. However, moving funds from certain countries can present difficulties.
“A recent example was a client from Ghana,” Woodason shared. “It took them a long time and a lot of effort to move the money from Ghana to the UK due to restrictions on how much could be sent on any given day.”
Overcoming hurdles and misconceptions
Brokers interviewed by Mortgage Introducer emphasised the importance of professional advice for foreign nationals navigating the UK mortgage market.
“If you are a foreign national looking to buy in the UK, you simply are not a usual buyer,” Woodason said. “You need to work with professionals who understand the particular challenges you might face depending on your circumstances.”
Establishing a UK presence, maintaining a clean credit profile, and ensuring up-to-date visa status are also cited as ways to improve mortgage approval chances.
Misconceptions also persist, particularly around deposit requirements and property use.
“A common misconception is that foreign nationals must always provide a minimum 25% deposit.,” McMillan said. “While many lenders do set this requirement, there are a number of lenders who will consider applications with smaller deposits, sometimes as low as 5–15%.”
Broader access expected as lenders shift approach
Looking ahead, brokers anticipate continued growth and diversification in the market.
“We have recently seen Barclays, and even more recently Accord, ease up on restrictions foreign nationals living in the UK who want to buy somewhere to call home face,” Woodason said. “Overall, however, I think the market will become more diverse as lenders see that this is a growing cohort that they need to cater to.”
Levine also noted the potential for further changes in lender requirements: “As lenders have gradually reduced their requirements on residency, and visa, I can see us moving towards a point where you don’t need a typical visa to purchase a property in the UK.”
For brokers, helping foreign nationals secure mortgages is a rewarding aspect of their work.
“Being able to turn that around and support families in achieving their goal of home ownership is incredibly rewarding,” McMillan said. “Knowing that my guidance has helped them establish secure, long-term roots in the place they want to live and work is something I take great pride in.”
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