One of Britain’s leading lenders is overwhelmed with demand for buy to let mortgages from expats.
Skipton International has announced that buy to let lending has outperformed other residential borrowing at the firm’s branches in Jersey and Guernsey.
A flood of applications has forced the lender to streamline application procedures to meet demand and change borrowing criteria to allow retired expats the chance to invest in property in the UK.
To help borrowers work out if they can afford to invest, the lender has added a buy to let calculator aimed at expats online.
The calculator takes the property location, value and likely rental income and calculates how much expats can borrow and the deposit needed for the purchase on a five-year fixed rate buy to let mortgage and longer term deals.
Buy to let now represents around 15% of all mortgage lending in the UK and is gaining in popularity as rents continue to rise.
Countrywide, one of the UK’s leading letting agents, has disclosed average rents are around £935 a month – a 4.6% increase year on year.
Rents and property prices tend to be higher in London than other cities, but more expensive house prices see a lower return on investment despite many homes renting out for around £2,500 a month.
Skipton International managing director Jim Coupe said: “We didn’t offer buy to let mortgages to British expats until relatively recently but the demand has been tremendous.
“The average expat property investor tends to be a first time landlord looking at climbing on the property ladder as house prices continue to increase.”
Expat buy to let lenders
Coupe says his company offers clear advice direct to expat customers who can talk to underwriters making decisions about their property purchases on the telephone.
Many borrowers seeking buy to let mortgages are living in the Gulf, Hong Kong, Singapore, Switzerland and the USA.
Skipton International is one of few lenders offering expat buy to let mortgages.
Others include the Ipswich Building Society, the Halifax, NatWest and HSBC.
Many mortgage brokers offer exclusive deals or package applications on behalf of expat buy to let lenders.
Meanwhile financial firm Legal & General’s chief executive Nigel Wilson claims individual landlords should stop running buy to let as a ‘cottage industry’ and let institutional investors take over with portfolios of 20,000 to 30,000 homes.
“The industry needs to be less fragmented and more professional,” he said.