Brexit need not harm the expat mortgage market, thinks Offshoreonline
With bookmakers Paddy Power offering odds of 3 to 1 this week that the vote to remain in the EU could be in the range of 45% to 50%, the odds look close. Should expats be worried? For those looking to take out an expat mortgage to buy a house in the UK, expat mortgage brokers Offshoreonline.org think that the vote is unlikely to have any immediate effect, but that if the UK did vote to leave, lighter touch and better targeted financial regulation might mean more lenders would remain in the expat mortgage market.
The EU has not shied away from issuing directives in the personal financial services sector, believing that banks need to be ever more tightly regulated. Its latest contribution, the European Union Mortgage Credit Directive, or MCD as it is widely known, has already had an impact on the expats around the world, causing at least two lenders to cease activity and withdrawn from offering expat mortgages.
MCD affects anyone who, for example is considering taking out a sterling mortgage to buy in the UK but whose main income is in another currency. The Directive has therefore impacted not just EU residents, but also expats globally, who are probably one of the largest groups in this category. As a group, expats tend also to be some of the best financially educated members the public, dealing as they have to regularly with currency exchange and receiving a salary in a foreign currency.
Guy Stephenson, a spokesman for Offshoreonline.org, argues that this has had unforeseen consequences. “Compliance is a huge cost for UK banks and building societies and EU directives are a significant part of this. The larger banks can absorb changes to the regulations with relative ease, but for smaller building societies trying to develop specialist lending niches, such as expat mortgages, the challenges can be significant. Many simply can no longer consider the financial implications of changes to processes, so that new EU rules can be accommodated. We have seen at least two Societies go down this route in the last month, citing MCD as the reason why they will no longer lend to expats.”
The net effect of MCD, in the short term at least, has therefore been a reduction in choice and competition for expat mortgage customers, not, one assumes, what the EU wanted.
On a more positive note, Offshoreonline.org reports that at least one building society has managed to accommodate MCD. It will be monitoring exchange rates and if these move by more than 20%, it will then write to its expat mortgage customers to help them resolve any currency risk they face. Fortunately, sudden 20% swings in currency are rare, so MCD might just be another example of new rules which just have to be accommodated in the longer term by us all.
March 2016
« Back to News
Latest News
- Green shoots appearing in UK property market, good news for expat house buyers
- UK Housing asking prices see smallest February increase on record
- Optimistic signs in expat buy to let market as mortgages rates fall and prices stabilise
- Expat UK property investing: Three positive signs, thinks broker
- Expat buy to let market still strong after two rate rises, says broker
- Recovery and strength in the UK housing market for 2022?
- Expat broker optimistic on post Covid UK buy to let housing market
- Broker warns over mortgage payment holidays
- Buying UK buy to let property after lockdown – expats will have the upper hand, thinks broker
- Expat lenders react to keep expat mortgage deal flowing during COVID-19 crisis
- Coronavirus impact on UK housing might be short lived, thinks expat mortgage broker
- Getting a mortgage whilst living abroad or getting a mortgage after you have moved abroad.
- What Happens when my UK Expat Mortgage Expires?
- Buy to let bargains abound, thanks to Brexit effect, thinks broker
- Expats increasingly vulnerable to new build deposit loss
- UK house hunters lead 6% growth in French non-resident property transactions
- Expat Buy to Let Mortgage Rates Cut Again
- Brexit fears give expats the edge, as UK buyers shun property
- Mortgage tax changes in Spain help buyers
- Expat mortgage broker predicts banks will not pass on full Base Rate rise to mortgage holders.
- Falling Expat Mortgage Interest Rates and Weak UK Housing Market Favour Expat Buyers
- UK property beats pensions, says UK official study
- Taxes for UK expat landlords might not be so hard after all
- Why a sinking pound need not scupper your French property dream
- Is it time to add UK university fees to your expat mortgage?
- Resurgent Spanish property market prompts new mortgage launches
- The new landscape for UK property investors – still good value
- New UK Buy To Let Rules Will Impact Expat Property Buyers – 2017
- UK rent rises continue to outstrip inflation, expat buy to let remains popular
- UK Stamp Duty hike not as harsh as first feared for expat property buyers
- Do I qualify for expat or international mortgages?
- Brexit need not harm the expat mortgage market, thinks Offshoreonline
- UK stamp duty changes, capital gains tax changes will impact expat buy to let investors, so start planning your checklist now
- Booming London property rents continue to attract expat buy to let landlords
- New UK Stamp Duty Won’t Dent Appeal of Buy To Let Mortgages For Non UK Residents
- QE spells heaven for overseas property buyers in Europe
- Thinking about buying a house in 2015? For expats, the signs are good
- UK property prices on the up in 2015 good news for expat buyers
- UK Stamp Duty changes – the winners and losers
- French expat euro mortgage rates fall again
- New house price index to make life easier for French euro mortgage house buyers
- New Spanish government figures point to gentle housing market recovery
- Buyers forced out of London by spiralling property prices have helped fuel a 10% annual rise in asking prices in the south-east – a rate that has now outstripped inflation in the capital.
- UK student loans – plan now for flexibility
- Landlords enjoying “record income from letting
- French euro mortgage rates fall again
- Mortgage lending up as UK house prices settle
- Brit buyers bounce back!
- Thinking of buying a house in France? Prices have just dropped 10%
- Fixed rate UK international mortgage demand to rise, as regulator confuses