Property in Australia

Increase in British expats in Australia wanting to buy a property in the UK

by Ray Clancy on February 6, 2018

in Australia

In the last year there has been a 29% increase in the number of expats in Australia looking to invest in buy to let property in the UK, despite tougher lending criteria, new research has found.

Many British expats end up buying property as an investment and also as a home should they choose to move back, but tougher mortgages rules were introduced in 2014. It became even harder for expats when European rules in 2016 meant that anyone paying in a foreign currency are scrutinised even more when their applications are assessed by mortgage underwriters.

United Kingdom Australia

(By xtock/Shutterstock.com)

There is a further hurdle for expats in Australia as options for mortgages on UK properties are limited further by certain Australian banking regulations and treaty arrangements, which technically precludes lending to each other’s residents, according to Cherry Mortgage and Finance, an expat mortgage broker based in the UK.

However, there are over 1.1 million British people living in Australia and many wish to buy property back in the UK, either as a pure investment, or as something they intend to live in upon their return.

‘We receive a large volume of enquiries from expats in Australia and have a handful of lenders that will arrange buy to le loans for them. Typically, UK expats are looking to invest in buy to let property whilst living in Australia, perhaps as a way to provide an income in retirement, or even to live in upon their return,’ said Matthew Fleming-Duffy, managing director of Cherry Mortgage and Finance.

‘On the whole, we receive enquiries from people in all walks of life including lawyers, bankers, IT professionals, teachers, engineers and those employed in the medical profession but it has got a lot harder to get a mortgage in the UK if you don’t live there even if you’re a British expat,’ he explained.

‘We saw a few lenders withdraw from expat lending last year, as a direct result of the EU Mortgage Credit Directive,’ he added.

According to the firm, those who have a 30% deposit, earn over £45,000 sterling equivalent, work for a multi-national corporate or have an existing UK mortgage will have more options.

‘If your income is lower, or if you are self-employed, or if you are looking to purchase more unusual properties, then you may find that the product options being offered to you are expensive and your potential purchase becomes unfeasible, or indeed that you cannot even borrow,’ said Fleming-Duffy.

The firm has identified over a dozen lenders who are willing to provide buy to let mortgages to expats in Australia. However, many mortgage lenders will only consider applications from them if they can meet certain specific criteria.

For example they may only lend to investors in Australia if they are buying British property via a Limited Company. Others will take applications from individuals but as with the mainstream mortgage market there are a wide range of fees, deals and variable rates.

Finalising the deal can also be tricky. Some lenders historically have had a requirement for potential mortgagors to leave Australia to sign documentation and the firm has experienced a case where the lender insisted on the client visiting the UK and signing documents in front of their solicitor. But more lenders have been developing a flexible approach to expats that live in Australia.

{ 0 comments }

Thumbnail image for New global property report says Brits are buying more in Australia

New global property report says Brits are buying more in Australia

November 19, 2015 Property in Australia

Australia is very popular with British people but now it seems the love affair is more than just the lifestyle and weather as more UK investors are buying property in the country. Record low interest rates, the comparatively weak Australian dollar and escalating prices in the UK are behind the rise of British buyers down […]

Read the full article →
Thumbnail image for Australia Tightens Rules on Foreigners Buying Agricultural Land

Australia Tightens Rules on Foreigners Buying Agricultural Land

February 23, 2015 Australia

The Australian Government has moved to provide certainty about rules applying to foreign investment in agricultural land in Australia. Prime Minister Tony Abbott, in a statement released jointly with Treasurer Joe Hockey and Agriculture Minister Barnaby Joyce, said that foreign investment always has, and will continue to be, integral to Australia’s economic success. This comes […]

Read the full article →
Thumbnail image for Properties investments by immigrants in Australia growing

Properties investments by immigrants in Australia growing

March 7, 2014 Australia

It is well known that the lifestyle attracts immigrants to Australia but now it seems that property is proving a big hit with expats too. A new report from investment bank Credit Suisse says that newly arrived immigrants have spent about $24 billion on property in Australia over the past seven years. It reckons that […]

Read the full article →
Thumbnail image for Immigration numbers pushing up Australian house prices

Immigration numbers pushing up Australian house prices

January 7, 2014 Australia

Immigrants arriving to work and start a new life in Australia are pushing up property prices which have increased by 10% in 2013, it is claimed. According to property experts UCHK Consulting who consult to Australian Immigration, understanding or predicting the country’s real estate market is about immigration policies and overseas investors opinions of Australia’s […]

Read the full article →
Thumbnail image for Rents in Australian cities rising as demand outstrips supply

Rents in Australian cities rising as demand outstrips supply

August 26, 2011 Property in Australia

People moving to work and live in Australia face paying more for rental properties as demand is high, particularly in inner city suburbs, according to real estate groups. Low vacancy rates, improving employment, the end of the first homebuyers’ grant and last year’s string of rate increases have contributing to the rises in rents.

Read the full article →