One of the frustration that UK nationals living abroad experience is that the nature of their work dictates that they are non-domiciled. The dream of owning a home in the UK can become complicated without the correct advice. Offshore mortgages are very different products to ones offered to UK nationals that live and work in the UK.
Tax laws have been tightened over the last decade that also makes this area of lending even more complicated. A person can be resident in the UK, but non-domiciled. Having a UK-based employer that pays them in sterling may make obtaining an offshore mortgage easier. Even having a non-UK employer that pays in sterling into a UK bank account may make things easier.
The real headaches begin when the UK resident, that also happens to be non-domiciled for work purposes, is paid in foreign currency by a foreign employer. Add to this the complexity of fluctuating exchange rates and you’ll understand why the banks waver when offering offshore mortgages. Most offshore mortgages that fund property purchase inside the UK are funded from lenders based in the Channel Islands.
Offshore Mortgages – Varying Terms
Offshore mortgages are not regulated by the FSA, and before accepting one it is important to check with both your broker and tax advisor how vulnerable you are. Privately funded property purchases are essentially contracted in a way that the contracts can vary from one deal to the next.
This means that there are few hard and fast rules about how your funding agreement will be structured. For most that take this route, the convenience and access to funds combined with the expected long-term investment outcome more than sufficiently compensate for this.
UK resident non-domiciled British nationals are not the only people that seek out offshore mortgages. Foreign residents in Britain may struggle to find a high street bank to finance their property purchase. Anything from abandonment risk to loss of residence status makes the mainstream shy away. In fact, very strict internal regulations, as well as regulations dictated by the regulatory bodies, can make funding a property difficult. This applies whether the person is a high net worth individual or a foreign company or organisation.
It’s hard to tell what kind of impact Brexit will have on this market. The face of immigration and emigration is surely going to change. How it affects the property market is yet to be realised. Speculation can and will affect product availability but will not shut it down completely. The property market is here to stay whether it is buoyant or somewhat deflated. All lenders, whether they are private financiers or high street banks, care primarily about two things. The value of the property and the capacity of the borrower to pay the mortgage.
Non-Resident – Non-UK Nationals
Another group that is often forgotten when it comes to offshore mortgages are the non-residents. Non-UK nationals that are also non-resident but have a vested interest in purchasing property in the UK also struggle to find property finance. This may be for an investment or for a longer term plan to eventually settle.
Foreign companies based abroad may also fall into this category. Offshore mortgages are particularly attractive to these groups and they make excellent prospects for private finance lenders.
Because offshore mortgages are a specialist product, it is unwise to try and negotiate the terms yourself. It is a good idea to find an experienced broker that will not only find you the best funding source for your circumstances but will also be able to negotiate the best possible terms.
Belgravia Property Finance offers advice and access to funding that may otherwise be difficult to find. Access is offered to UK nationals that are resident but non-domiciled. This includes expatriates living abroad. This group includes non-UK nationals and companies living or operating in the UK. Additionally, foreign individuals and companies that neither live nor operate in the UK.
Tags: high net worth mortgages / mortgages / offshore mortgages / property finance