The Intermediary –- June 2026 - Flipbook - Page 13
RESIDENTIAL
Opinion
iting expats for a
longer exists?
cases, it’s not a fundamental issue
with the borrower, it’s just that last bit
of headroom that’s missing.
You’ll oen see this with first-time
buyers or those looking to return
to the UK, where building a larger
deposit while living overseas is not
always easy, even with a strong
income behind it. It’s not uncommon
to have everything else line up,
only for the case to fall short at that
final point.
What is interesting, though, is that
the wider market has already started
to move. Data from the Financial
Conduct Authority (FCA) shows that
46.9% of mortgage advances are now
above 75% loan-to-value (LTV), with
lending above 90% also at its highest
level in over a decade.
So, higher LTV lending is not
unusual in itself. However, that
flexibility has not always carried
through into expat and foreign
income cases in the same way,
which is where some of that
friction remains. Recent
changes, including
our increase to 90%
LTV within foreigncurrency mortgages,
are a reflection of
that gap, rather
than a change in
appetite for risk
This is probably where the
underwriting approach makes the
biggest difference. It’s not just about
what the criteria says, but how it’s
applied in practice. A recent case is a
good example of that.
The applicants were UK nationals
living and working in Saudi Arabia,
with one earning a contractor
income paid overseas and the other
not currently working. Alongside
that, there was a historic default
and a missed payment, both over
three years old. On paper, there are a
few elements there that could cause
hesitation. And I think most lenders
would at least pause at that point.
However, when you take a step
back, the overall picture is more
straightforward. The income was
strong, the affordability was clear,
and there was a defined plan to return
to the UK. The deposit was made up
of both savings and family support,
and the adverse had already been
addressed.
The key, in this case, was not
to treat each point separately, but
to understand how they worked
together. That included assessing
the income on its own terms, rather
than applying UK tax assumptions
that were not relevant, and looking
at the adverse in the context of the
wider profile. Once you do that, the
case becomes much clearer. And,
in truth, those are the types of cases
where a bit more thought early on
tends to make all the difference later.
Higher LTVs for foreign currency
borrowers are one example of
how lending approaches are
adapting. But they are only
one part of the picture. The
wider change is towards
looking at borrowers
in the round, taking
account of their
income, financial
history and overall
affordability rather
than focusing too
heavily on any single
characteristic. ●
