Financing for Overseas Property Purchases in London
December 20, 2011
More and more overseas based investors are looking to invest in UK property, specifically London, as it is deemed an attractive asset class with relatively low risk, providing a hedge against both inflation and currency.
Working in the portfolio management division in our main hub in Canary Wharf, I have noticed the high level of interest from overseas based buyers in recent months.
I receive many mortgage enquires from overseas, especially expats of the UK, asking what their finance options are. There are UK lenders we have access to who can cater to this rather niche market. Another route is through international lenders, they seem to have a healthy lending appetite, especially within the new build market.
Here is one example of a main UK based lender to expat investors; the criteria is quite strict.
Applicants must work for a government agency or multi-national company
Be listed on one of the 5 major stock exchanges
Must be employed for over 3 months
Must own another property in the UK, to show there is a link to the UK.
International lenders will concentrate on the country of residence and will use an index to assess how they underwrite a case. The lower down this index scale (perceived higher risk), the more information will be required and the more assets they will want to see outside of the domiciled country. There will also be different criteria in terms of what is acceptable, based on each country’s laws and policies.
There are lenders that seem to be aggressively trying to win new business with attractive products and criteria for those buying in the UK, in particular London, reflecting the faith and confidence held by outsiders in the London market and the Private Rented Sector here.
I feel sure that if things continue, 2012 should see more products coming to market and a wider choice of financing for non-UK based buyers.