Mortgage on UK property while living abroad

moneydufus

My son wants to remortgage his flat in London as he is coming towards the end of a fixed-rate deal. He is currently working in Asia on a two-year contract. He cannot find a lender willing to accept him despite having an excellent employment record, long-term bank account, good credit rating etc.

Some lenders will only lend to UK-taxpayers. None so far will lend to someone on a 2-year contract (18 months to go).

Does anyone know of a lender who provides for what must be a large number of borrowers in my son's situation?

kingstreet

Does he want a remortgage, or does he simply want another fix or similar?

If the latter, has he asked his existing lender what customer retention products it has available to him?

I presume the property is let? This may cause a problem, as the lender may wish to charge a higher rate for a mortgage on a non-owner occupied property.

holly_hobby

The issues you have are the contract nature of his employment , that he is in essence an ex-pat, and the fact that his employment is non EU.

He should also be paying tax on any income brought into the UK (which is how I assume he pays his mge if the property is not let), which is relevant if the country he is located within Asia, does not have a current Double Taxation Treaty with the UK.

Notwithstanding the fact that if the property is rented, he should also be declaring rental income for HMRC purposes - which I assume amounts to a tax liabiity of some kind.

The contract element of his income may be acceptable if it is typical employment status of his profession, and he is in a highly specalised or in demand area of expertise - how is he paid (I am guessing US dollars which is a typical business currency for non-nationals/westerners employed in such regions).

How long he has worked on contract in this area of employment will also have a baring, as will as I say the nature of the role, etc.

You say that you have approach a number of lenders who for one reason or another rejected the employment status of your Son - have you contacted HSBC (which actually stands for Hong Kong and Shanghai Bank of Commerce), and as the name suggests operate and are based largely in the Asia region, but do also have a high steet presence in the UK (achieved by buying out the old Midland Bank). This would help in any tsf of currency/monies between branches in operating countries easier, and also on his return in having all his capital tsfed to his UK operating account.

From a landlord point of view, he should also be registered as an absent landlord with a UK contact point.

If the property is not let - there are absent owner issues - whereby standard B&Cs are invalidated, and a specalist un-occupied contract is needed (which are availalbe). However, a new lender may reject on this basis, in addition to/of in place of, the employement issues.

Having said all that, there are several issues with this case, and my own preferred advice, is to simply remain where he is - unless of course the rate is ridiculously high. In that event he would be best to seek a specalist ex-pat adviser and/or speak to HSBC as discussed.

Here is HSBC link to overseas and expats accounts, which may help:- http://www.hsbc.co.uk/1/2/overseas-account-opening
http://www.hsbc.co.uk/1/2/current-accounts/expat

Hope this helps

Holly

Conrad

A residential remo will be impossible, for one thing he is not dwelling in the property and lenders and isurers consider this high risk as experience tells them squatting and other issues become more likely (regardless of your sons particular circumstances / property security).

Honestly he should just take the existing lenders current standard variable or other possible deals they might offer although he might want to think twice as to explaining he isn't acually dwelling in the asset as the lender will not like this.

moneydufus

Thank you to all who replied. One thing I should have mentioned. The mortgage is held jointly with his brother who lives in the flat, and there is no one renting his room. So issues of absent landlords and paying tax on rental income don't arise.

He is already a current account holder with HSBC but they won't lend because he hasnt been in contract work for at least two years, even thought they can see his bank account records for 10 years showing regualr income before he took this post. Contract work is normal for the specialised work he does but this doesnt seem to count.

All that said I do agree that they are probably best to stay with their current lender as they can get another two-year fix at the same rate as they are currently paying. They were hoping to get a rate saving on 1 to 1.5 per cent with other lenders which is why this came up in the first place.