Brokers struggle most with overseas income checks for expat mortgages

Proving income and affordability through overseas tax returns and payslips is the biggest challenge facing mortgage brokers with expat clients, according to new research from Suffolk Building Society.

Nearly two-thirds (62%) of respondents cited it as their main challenge.

Concerns about global political instability, uncertainty over lending criteria, and identity and anti-money laundering checks were the next most common issues, each highlighted by 48% of brokers surveyed.

The survey examined intermediaries’ views on niche areas of mortgage lending.

Respondents estimated that only a third (34%) of expats are aware of the need for a dedicated expat mortgage.

Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said: “There’s a widely understood idea of what an expat looks like — perhaps a lawyer or finance professional who has moved to Dubai. But the reality is much broader.

“Those working for a UK company but based overseas, and under their local tax jurisdiction, would count as an expat.

“As might someone working on an oil rig, in shipping, or as crew, or at the UK overseas embassy, which can be a surprise if they’re new to living or working overseas.

“Given the complexities of an expat mortgage, and the fact that many prospective borrowers are unaware that they require one, Suffolk Building Society believes there is a clear case for the value of broker advice.”

When brokers were asked where they believe they add most value in expat cases, the overwhelming majority (88%) pointed to finding a lender willing to lend based on a customer’s individual circumstances, such as their country of residence, tax status and the currency in which they are paid.

The second most commonly cited area was explaining the type of expat mortgage a customer needs, with 54% highlighting the value they add in navigating the different options, such as expat BTL, consumer expat BTL, expat holiday let and expat residential mortgages.

In third place, 44% of brokers said they add value by explaining the documentation required and helping clients understand why the process may be more complex than a standard UK application.

Charlotte added: “Even when clients know they need an expat mortgage, understanding which type of product is most suitable isn’t always straightforward.

“Whether they plan to let the property permanently, use it themselves when visiting the UK with flexibility around letting, or make it a home for themselves/family members, this all influences the type of mortgage they may need.

“For example, we’ve had brokers come to us looking for a BTL mortgage, but after talking through the case their clients have opted for the added flexibility that a holiday let product can bring.

“A broker’s understanding of the customer’s wider circumstances, combined with our knowledge of expat lending, means we can work together to provide a robust solution for expats across the world.”