Focus on: Ex-pat Buy to Let with Castle Trust

Buying investment property in the UK has become a more achievable goal for many ex-pats in the 18 months since the EU Referendum, as a weakened pound has increased the buying power for those who are remunerated in other currencies.

There are numerous lenders that offer mortgage finance to British ex-pats who want to invest in residential property, but ex-pat mortgages often come with restrictions. For example, most lenders require applicants to already own a home in the UK before they will consider funding a buy to let investment and many lenders will only lend to ex-pats who meet a minimum income requirement or reside in specific countries.

At Castle Trust, we will take a more flexible approach and can consider ex-pats who do not currently own a home in the UK, provided that they are British nationals and can demonstrate that they have owned in the UK previously. We do not have a set minimum income and we can consider ex-pats living in any country.

For example, we recently provided a mortgage to a self-employed ex-pat with variable income who lived in Zimbabwe.

This customer wanted to borrow £300,000 to buy a detached house in Kent valued at £875,000 and Castle Trust was able to offer a mortgage, with the option to service interest, or roll-up interest for payment on redemption of the loan.

The option to roll-up some or all of the interest payments is a useful feature for borrowers who want to manage cashflow or are buying a low yielding property where the rental payments do not meet the interest coverage ratio (ICR).

However, on this occasion, the rental income was sufficient to cover the stress test for the loan balance and the borrower chose to service the interest. By taking a flexible approach and assessing this application on its own merits, we were able to provide this ex-pat with an opportunity to invest in the UK property market.

Matthew Wyles

Executive Director

Castle Trust Capital