Expat borrowers reshape mortgage demand as lenders adapt to new norms

As more UK citizens move abroad, a growing number are seeking to buy or retain property in the UK – a trend reflected in rising broker enquiries for expat mortgages. According to Charlotte Grimshaw, Head of Intermediaries at Suffolk Building Society, today's expat borrower is not who they used to be.

"Many of the customers we're seeing now don't fit the traditional expat mould," said Grimshaw. "We used to see mostly employees of multinational companies. Now, it's increasingly self-employed individuals, contractors, and people working for smaller firms."

Expanding definitions of the expat borrower

ONS data shows over 250,000 UK residents moved overseas in 2024. In response, lenders have developed more nuanced products, including residential mortgages for clients paid in currencies like Saudi Riyal or Kuwaiti Dinar, areas previously excluded from many underwriting criteria.

Borrowers are also choosing different paths with their properties. "Holiday lets, in particular, are popular," said Grimshaw. "They offer a UK base and the opportunity to earn additional income."

Another development is the use of joint borrower sole proprietor structures, allowing expats to support family members in the UK with affordability.

Some expats are even pursuing self-build or renovation projects from abroad. Grimshaw noted that while these cases bring additional complexity, the fundamentals remain familiar. "Most expats can't attend the site regularly, so having a trusted project manager in the UK is crucial," she said. "But beyond that, once income and affordability are confirmed, the process closely mirrors that of a UK-based borrower."

Complex incomes call for flexible underwriting

Unlike domestic applicants, expat borrowers often earn in multiple currencies or receive income from various sources, including overseas employment, UK rental income, and pensions. This calls for a lender mindset focused less on rigid checklists and more on practical judgment.

"It doesn't make sense for a lender to have stringent, inflexible criteria," Grimshaw said. "Expat borrowers need a common-sense approach."

For some clients, the property is a future home to return to. For others, it's a long-term investment. Grimshaw noted that the market now supports a range of use cases, beyond the binary of residential or buy-to-let.

Clearing up misconceptions about expat borrowing

While demand is rising, some myths persist. One is that expats face much lower loan-to-value (LTV) limits than domestic borrowers. Grimshaw counters this directly: "Expat residential mortgages go up to 90% LTV, and for holiday let or buy-to-let, it's up to 80%. That's very much in line with the UK norm."

Documentation can also be a barrier. Standard UK proofs like payslips and utility bills aren't always available to expats. But lenders are adapting. "With electronic ID and manual underwriting, we've created workarounds that make the process more accessible," said Grimshaw.

Affordability assessments may also surprise clients in a positive way. For example, Middle East-based applicants with tax-free income often show strong affordability. Buy-to-let applicants can also benefit from favourable interest coverage ratios, particularly when classified as basic rate taxpayers.

A more confident, better-informed market

Grimshaw believes the shift in the expat mortgage space is less about easing risk appetite and more about lenders understanding their customers better.

"The risk hasn't increased. Standards haven't dropped. It's about making informed decisions with the right context," she said. "Manual underwriting lets us treat each case individually, and that’s how the sector has been able to support the expat market more effectively."

As international mobility continues and borrower profiles diversify, lenders that offer tailored, pragmatic solutions and communicate clearly with brokers, are likely to remain ahead of the curve.