Out of sight but not out of mind

Family Building Society offers specialist solutions for expat clients

Out of sight but not out of mind

This article is sponsored by Family Building Society.

Expat lending solutions, specifically buy-to-let mortgages, have historically made up a significant portion of Family Building Society’s business. Recent global factors have put increasing focus on this specialist segment. From digital nomads and remote workers to Baby Boomer retirees and people experiencing a post-COVID travel itch, Family Building Society is seeing a burgeoning of inquiries about expat lending solutions — and they’re well-positioned to meet it.

“People are willing and wanting to experience different parts of the world,” said Darren Deacon, head of intermediary sales at Family Building Society. “From our perspective, the UK housing market is an attractive investment vehicle: people that have property here want to keep it and see it grow, and/or buy more property for their later years into retirement.”

Breaking down barriers

Lenders often have strict requirements in this area, such as minimum income requirements, reluctance to deal with a self-employed applicant, or will only consider employees of large multinational companies. But Family Building Society, a leader in the space that considers applications from over 40 countries, is all about removing barriers.

“We broaden our appeal to brokers and customers by being easier to deal with,” Deacon stated. “We also offer this on a residential basis. There are many expats working away or travelling, whether briefly, for long periods, or permanently, but they want to keep their UK property as their base. They want that foothold in the UK market.”

Family Building Society operates through UK mortgage partners who bring the cases to them. Some intermediary firms have advisors based all over the world, from UAE to USA and Hong Kong, feeding cases back into the UK business.

“I’ve got one of the biggest firms in the north of England who direct expat introductions to us,” said Paul Roberts, senior account director. “These firms work very closely with us as they know we're a specialist in this area and they can rely on what we do.”

Working on a global scale isn’t without its challenges. Depending on where the applicant is, compliance firms may have different rules as to whether they will allow a broker to deal with an expat or not. There are also practical considerations like different time zones which may mean business hours don’t necessarily line up well. Working with a lender who understands these complications is vital.  ​​​​​​

There are also some misconceptions when it comes to expat mortgages. It’s often thought of as an incredibly complex transaction, but Roberts says “we don't see it as anything different other than us being more conscious of IDing people,” adding that even then, “we are lending to a UK national rather than a foreign national, so they have the same ID and address verification requirements as somebody living in the UK.”

“That makes it straightforward apart from the odd country where you might have PO box addresses or something like that. Europe is a classic example: it’s relatively easy for us to ID and address verify, and we very much continue to progress with Europe in terms of the countries that we will accept for an expat buy-to-let. It’s a very valuable market for UK expats.”

Seeking out the specialists

Family Building Society keeps the lines of communication open with their broker partners, but outside of those who specialise in this niche type of lending, there’s one story the lender hears time and time again: a broker receives an expat inquiry, doesn’t know what to do with it, and either passes it off or puts it to the side.

“They didn’t go down that road, but we want to make it easy for them to do so,” noted Deacon, adding that if a broker is unsure, “we have team of knowledgeable BDMs they can speak to who will direct them either to a packager they’re familiar with, or even better, come to one of our packager partners who knows how to package these cases, and who work closely with our underwriters. This makes sure that we have everything we need to progress the case.”

Family Building Society does a lot of this type of business and wants to share their insights. Brokers need to know what the processes are, how inquiries are dealt with, what the rates are and how they fit with their clients’ needs, and the nuances of what Family Building Society does compared to other lenders. For example, Family Building Society looks at mortgage applications on buy-to-let for people up to the age of 89. Most of these older applicants are retired and have moved overseas, or bought property in Spain or Portugal, for example “and we’re happy taking their existing residential in the UK and popping that onto an expat buy-to-let - it’s not just for the young, it's very multi-generational,” Roberts emphasised.

“We actively encourage brokers, especially those who deal with these cases very rarely, to use our packaging partners. They’re very specialised in helping in these situations because they deal with them on a regular basis and get to know what we do and don't need.”

Another reason to seek out specialised knowledge is because of the current economic climate. Given the sharp rise in UK interest rates, “the actual cost of what they were doing three or four years ago looks very different to what they're trying to do now,” Roberts said.

But things are slowly looking up: rents haven't necessarily kept pace with rate rises, for example, but they’re starting to come back the other way.

“We've seen some significant reductions in fixed rates in the last few weeks and rents have risen to some extent, so it's just taking some time for them to balance out,” Roberts observed.

But managing this market fluctuation is par for the course for Family Building Society, whose flexible approach and thorough knowledge are the mainstays that navigate the business through volatility — and they’re happy to share that expertise with brokers and clients alike.