Foreign Nationals and Overseas Investors

Despite a few recent hiccups the UK economy is strong and in particular the UK property market generating excellent returns for investors.  The UK property market is not only attractive to overseas institutional investors like banks, but also to individuals.

There are three distinct types of foreign investor we can consider; foreign UK residents, ex-pats and foreign residents.  Each type of investor can get UK based funding for buy to let investment, but each category does present increased risk to lenders.

Foreign UK Residents

Foreign nationals residing in the UK should not have any problems arranging finance assuming that they have been resident for 2 to 3 years and are able to pass the standard credit checks.  Lenders will seek assurances that the applicant is not planing on leaving the UK in the near future, usually evidenced by the applicant having a permanent right to reside or at least 2 years left on their visa.

Foreign Nationals

Applications coming from individuals who were neither born or reside in the UK carry the highest level of perceived risk to lenders, therefore the loan to values will be quite restricted.  There are fewer lenders active in this market so rates will also be correspondingly higher, which is not surprising given that it is near impossible to carry out credit checks etc.  A lot of consideration will be given to the country of residence, with certain countries being excluded.

Ex-pats

Defined at UK passport holders who have left Britain to live abroad, it is not unusual for an individual to want to rent their UK residence whilst setting up a new life abroad.  Providing that the applicants are able to pass the standard credit checks and prove their employment/income abroad the usual application process will apply.

The UK property market will almost certainly remain attractive to overseas investors, particularly people looking to spread their risk across several boundaries.  Whilst there are plenty of UK lenders willing to fund these investments it still pays to shop around and even consider raising finance in the country of residence.

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