Buy To Let for Ex-Pat

HelpWhereIcan

EdInvestor wrote: »

Indeed so. These days I am told that some lenders will require people posted abroad to switch over to a BTL mortgage. Some borrowers may want any to go I/O (whether BTL or not) anyway. Some lkenders are still happy to do the traditional thing.

Yes, but as I said it will also depend on the lender's view of the liklihood of them returning to the UK. The Halifax, for example, will often want to see that you have a fixed term contract or will be working for a UK based company to accept this type of arrangement.

They will be new borrowers not existing ones.

EdInvestor wrote: »

The OP says that, but he's going to Japan and it's actually very difficult (if not impossible) to emigrate to Japan,which does not welcome foreign immigrants even if they are married to locals.So things might not quite work out the way he thinks. Not so much withholding facts, as keeping options open. Which is of course what he's doing by keeping the property.:)

I am sure the OP will have taken that all into account before posting

But again, you miss the point that it is more to do how a lender (in possession of all the facts) would view his application.

Most lenders would start to apply different criteria as soon as they knew that the customer was going abroad - even if that was after completion and they forced the customer to switch to a product that is less competitive than would be available as an expat buy to let.

EdInvestor wrote: »

Yes, but these are aimed at people who are expats at the time they buy AFAIK, not applicable to this couple.

They have plans to move by the end of the year - if you were to ask most lenders they would consider this a material fact and a factor in their decision whether to lend or not - hence my comment about witholding facts.

As soon as they provide a forwarding address (believe me, you do not want tenants having access to mortgage statements), the lender would start to ask questions. Are you saying that at that point they should claim to be living with his brother?

What about the buildings insurance? Some insurers now have a policy of advising the lender as soon as a policy is cancelled or changed. Imagine the lender asking for a policy schedule for the new policy and noting that the policy is now a let one. Or are you advising the OP not to tell his insurers that the property is let?

EdInvestor wrote: »

Guy is only letting out a property : the main thing he needs to know about is the Non Resident landlords scheme, so he doesn't get done for tax on his rental income.

So there would be no potential income tax, IHT or CGT payable in Japan on property owned abroad?

Jonbvn

EdInvestor wrote: »

tank666 wrote: »

There's actually AFAIK no such thing as an "expat mortgage".

Have a look here. I think you may need to reconsider.

mightymouse

HelpWhereIcan wrote: »

Yes, but as I said it will also depend on the lender's view of the liklihood of them returning to the UK. The Halifax, for example, will often want to see that you have a fixed term contract or will be working for a UK based company to accept this type of arrangement.

Hi

Would this be the Halifax onshore or offshore.

(imho) it is better and cheaper for the op to sort out his affairs before he goes preferably with the protection of fsa.

op might be back in six months but for a year or two they should not have a problem sticking with a competitive uk rate / lender.(platform??)

There are many 'Ex pat mortgages' and 'advisors' who arrange them but it costs money to run an offshore uk brokerage so who pays for this cost.

rosbif

When we left the UK (permenantly) 5 years ago we just asked our lender (Abbey) if we could rent out our property. A small admin charge later and we simply moved out and moved tenants in - no change in interest rates etc.

I think expat mortgages are for those people with no UK 'history' like bank accounts / income statements etc. You should be OK just changing your mortgage as a resident, and getting permission to allow tenants in.

The non-resident's landlord scheme with the taxman is fairly straightforward if you are going to continue filling in a UK tax return (I still work in the UK but live abroad).

Having said all that we sold up after 2 years when our first tenants moved out - it was just too much hassle with repairs with those tenants and then an empty period with no-one in the house. It may be easier for you being a flat but with a house it just wasn't worth it. We've lost out on the capitol gain on the property but then who knows where prices are going now?

Good luck in Japan - it's a heck of a different place to live!

EdInvestor

rosbif wrote: »

The non-resident's landlord scheme with the taxman is fairly straightforward if you are going to continue filling in a UK tax return (I still work in the UK but live abroad).

According to the rules, an agent (or a tenant,or your brother) must deduct tax from the rent if the landlord is non resident and not signed uo to the scheme. It's not related to whether you do a UK tax return. You normally won;t need to bother with that as any rental income after mortgage interest deductions etc will be covered by your UK personal allowance.

I am not suggesting the OP should mislead the lender. It's quite routine for UK residents going overseas to ask for and get permission to let out their house while they are away, been happening for years.The OP says he going permanently, but does he have a crystal ball?

There may be no need at all to incur all the costs of moving to a new mortgage, though a broker might benefit if the OP did this.

I suggest he tries the simple way first, especially as going the complicated way looks likely to make the whole idea unviable - which is of no benefit to either the borrower or the lender.


BTW note to the OP: Before leaving make sure you open all the bank,broker,credit card etc accounts you think will ever need ( make sure you get a Nationwide credit/debit card especially) as you can't open anything onshore after you leave.The Japanese banking system is absolutely awful, it will drive you nuts, it's very difficult to get anything done.Many expats these days do most of their financial dealings via the Uk on the internet as it is so much more efficient (and cheap)than most other countries .

HelpWhereIcan

EdInvestor wrote: »

I am not suggesting the OP should mislead the lender. It's quite routine for UK residents going overseas to ask for and get permission to let out their house while they are away, been happening for years.The OP says he going permanently, but does he have a crystal ball?.

Again, you have a grasp of the basics, but not the practical knowledge of how lenders assess these things.

If he says, I want to let the house while I am away, the first question they will ask is "How long are you going to be abroad for?" followed by "where are you going" and "tell me about the income you will have".

I actually come from an expat family with parents who lived and worked abroad all their working lives (they cannot believe the choice expats have in terms of mortgages these days), with cousins who have emigrated to Australia and friends who have postings abroad with the forces. I have customers who work on private yachts and are paid tax free in dollars through a Miami holding company, others who work in Nigeria for Shell, one who works in Paris but commutes home at weekends, another whose only income comes from a Safari camp in Kenya but has properties here and a couple who permanently emigrated to Cape Town in February .

I have seen this a few times now and would say that each person's exact circumstances dictated who would lend to them and on what terms.

EdInvestor wrote: »

There may be no need at all to incur all the costs of moving to a new mortgage, though a broker might benefit if the OP did this.

I suggest he tries the simple way first, especially as going the complicated way looks likely to make the whole idea unviable - which is of no benefit to either the borrower or the lender.

I think everyone has read the bit where the OP says Platform have told them they will not do it. They do not offer 'retention deals' so the OP may only have the option of a remortgage to get a better deal - through a broker or otherwise - whether they stayed here or moved to Japan.

BTW, on the Buy to let side Platform lend to expats, but only if they are UK taxpayers and not to people will be residing abroad permanantly i.e normally they must be paid in £, pay tax and have a provable timescale in which they will be returning to the UK (normally by way of a fixed term contract, retirement age, obvious remaining ties to this country etc etc).

For exisiting customers (like the OP) they may agree permission to let, but this would be for a max of 6-12 mths at a time, at which point it would have to be renewed at a charge of £35. Platform reserve the right not to renew the arrangement at anytime. The mortgage must remain on the original product (because Platform does not offer retention deals).

Now tell me how it is in the OP's interests to pay a rate of 7.75% long term with £35 payable every 6-12 mths just for the priviledge of letting the property - Platform's? yes; The OP's? ....

HelpWhereIcan

mightymouse wrote: »

Hi
Would this be the Halifax onshore or offshore..

Onshore, doing pretty much the same as Abbey did for rosbif (who went to France?)

mightymouse wrote: »

(imho) it is better and cheaper for the op to sort out his affairs before he goes preferably with the protection of fsa..

Which he would only get on a residential mortgage rather than a buy to let.

mightymouse wrote: »

op might be back in six months but for a year or two they should not have a problem sticking with a competitive uk rate / lender.(platform??).

The lender's policy is what everything is dependant on. Most have more relaxed criteria for those going to Europe or those on fixed term contracts or with a UK employer than they might do for someone going to Japan long term, being paid in Yen by a Japanese employer.

See my post above for Platform's criteria

mightymouse wrote: »

There are many 'Ex pat mortgages' and 'advisors' who arrange them but it costs money to run an offshore uk brokerage so who pays for this cost.

Most UK based advisers will have access to lenders who offer offshore/expat buy to lets - BM solutions, CHL, SALT, Mortgage Trust etc etc - there is nothing to say that an expat mortgage is offshore or more expensive.

As I keep saying, it is a matter of lender's criteria. OP will in most cases get a UK deal from a UK lender that is the same as the one available to a UK resident - the deal need not be different, the criteria under which eligibility is assessed may well be.

rosbif wrote: »

I think expat mortgages are for those people with no UK 'history' like bank accounts / income statements etc.

That's actually a better description of a "foreign national" deal. Expat is expatriate - a UK national living and working abroad. Hence the focus on location, source of income, tax status, employer, contract length and amount of time the customer plans to be abroad.

A lack of credit history/provable income is not restricted to just Expats. Someone with no bank account, income etc could struggle to get a mortgage whether they were expat or resident.

tank666

hi, thanx again to everyone for their advice. We have decided now to sell after weighing everything up. Now we need to plan how to invest our cash!
Im starting a new thread in the investment section so if anyone has any advice please could they post in there?
Beingjdc - I have looked into the NS&I which looks pretty good will mention this in new thread.

Ginnser

We are in Hong Kong and own a number of investment properties in the UK.

We operate offshore / currency mortgages, and currently use the Swiss Franc. Interest rate is just over 3%, or you could go for Jap Yen currency !!

Drop me a line if you want more info!