Expat News
Chance to climb the property ladder back home
By
Nov 2, 2006, 16:02

Expat Village is edited and published by Iain Williams in Caracas, Venezuela.

A Daily Telegraph article by Melanie Wright at  www.telegraph.co.uk

Buying property in the UK while you are living overseas can be difficult, as expatriates can find themselves up against stern restrictions and expensive mortgage rates.

However there are several banks and building societies that offer a range of deals to expatriates who want to get on the property ladder in the UK. Derbyshire Building Society, for example, announced earlier this year that it has developed a new range of mortgages designed specifically for UK and EU nationals living abroad.

The range includes a buy-to-let deal, fixed at 5.35 per cent until August 31, 2009, and a flexible tracker mortgage, at five per cent for two years.

The buy-to-let deal allows overpayments of up to 10 per cent a year without penalty. At the end of the three-year term, the interest rate tracks the Bank of England base rate, currently 4.75 per cent, plus a further one per cent for the remainder of the mortgage. The mortgage is available for up to 10 properties, or a maximum amount of £1.5 million per applicant.

The flexible mortgage is designed for those who still have family living in their UK property. The mortgage tracks the base rate, plus a further 0.25 per cent until August 31, 2008, making the current payable rate 5 per cent. From Sept 1, 2008, the rate continues to track the base rate, but plus another one per cent.

Fiona Passey, director of offshore banking said: "Our entry into the expatriate mortgage market demonstrates our broader commitment to meeting the financial needs of British expatriates who now live and work abroad."

The application fee for both of these loans is £595. Products are fully portable and available for properties in England and Wales. To be eligible for a mortgage, the sole or first applicant must hold a current UK passport and be between 25 and 75 years old. If it is a joint application, the second applicant must hold a current UK or EU passport.

If you don't have the time or resources to find the right mortgage deal, you could use a UK-regulated broker. Offshoreonline.ORG, for example, has a panel of mortgage lenders and can offer a fast track mortgage application service to expatriates who need to act quickly.

Tim Harvey, managing director of Offshoreonline, said: "As specialist expatriate advisers we can use our knowledge and choose from a range of products. For those who are on the mortgage ladder already, the message is simple – check your rate to see if re-mortgaging can save costs. Many fixed rate loans will have unwound by now and, if no action has been taken by the borrower, he may well be on the lender's standard variable rate, which is usually one of the highest rates charged."

As property prices in the UK have soared recently, remortgaging can have other advantages for expatriates, as equity can be released.

Expat Village is edited and published by Iain Williams in Caracas, Venezuela.