Expat clients returning from the Middle East amid ongoing uncertainty in the region could face potential mortgage hurdles in the UK and need to carefully plan to avoid costly delays and unexpected disruption.
Returning expats often struggle with UK mortgages due to a lack of recent UK credit history, making them appear high-risk to mainstream mortgage lenders. Many lenders also typically require a solid history of UK addresses for anti money laundering checks. This can make it difficult for clients to prove their creditworthiness.
George Abouzolof, senior mortgage broker at Clifton Private Finance, said: “For many expats, getting back onto the UK property ladder is far from simple. Returning borrowers are often viewed as higher risk, meaning many will need to turn to specialist mortgage lenders.
“These specialist expat mortgages typically come with stricter requirements. Buyers are often expected to put down a larger deposit and provide extensive documentation to prove income, particularly if earnings are in a foreign currency.”
He added that currency risk can also become a sticking point, as if income is paid overseas, lenders may factor in exchange rate fluctuations when assessing affordability, which can reduce what you can borrow.
“The situation becomes even more complex for families returning ahead of the main earner. Where one partner remains working abroad, many mainstream lenders will decline applications altogether, pushing borrowers further into the specialist market,” he added.
“Another common issue is a weakened UK credit profile. Expats who have spent years overseas often find they have little to no recent credit history in Britain.”
To combat this, Abouzolof said that ensuring clients maintain ties to the UK financial system can help anyone considering returning get ahead.
“Keeping a UK bank account open and using a credit card regularly can make a significant difference when it comes to mortgage approval,” he said. “There are also tax implications to consider when buying. If you already own a property abroad, purchasing a home in England or Northern Ireland will likely be treated as buying a second property.
“That means paying the higher rate of Stamp Duty Land Tax, even if your overseas home is your main residence.”
