Expats struggle with buying property in the UK

Regaining a foothold on the property ladder or just wanting to return to the UK, expats are finding it a tougher go since the credit crunch. It is now more difficult than ever to find a lender that is willing to approve a mortgage to those that are living in the UK, let alone those that are living outside the country.

Lloyds International is controlling a great amount of all the mortgages that are being issued and all those large players like the Bank of Scotland International now go through Lloyds with all the underwriting referred to Hong Kong. With that the choice for borrowers has been narrowed down to just a small handful of major banks. And these tend to be slow and therefore buyers located offshore are thought of as not being serious by the estate agents back in the UK when bidding for a property.

In the UK the house prices are dropping at an annual rate of 1.7% according to figures from the Land Registry for February. Therefore it is a good time to buy unless the expat has financing in place and large deposit they usually will lose out.

Years past 20% would be a good figure for expats for a deposit to buy in the UK it has now risen to at least 30% and fewer lenders are even ready to look at expat borrowers therefore making it quite difficult to secure a property.

If you are going to return to live in the UK you will not have to worry about tax implications of buying the property until you take residence other than the normal stamp duty. Buyers for the first time are exempt for paying stamp duty up to £250,000 for the upcoming year.

If the plan is to return you should take the time to get some tax advice before returning. There are certain measures one can put into place that will reduce the amount of liability. But these things need to be done prior to retuning. If you are planning on staying off shore and renting the new property, there are tax considerations that need to be looked into.


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