21st July 2015 by Alistair Hargreaves
Mortgage Broker Alistair Hargreaves talks about Brits returning home and looking to purchase a new house in the UK.
In our age of globalisation and flexible labour markets, people will often move overseas for a couple of years before returning home. For younger clients, especially those working in a territory where local taxes are lower than in the UK (or non existent), the main driver to move abroad is often to help save up as much as possible for a deposit on a new house. All well and good, but when you return home to buy that house, most standard lenders may have an issue with the fact that you have not had a UK address in the last three years.
If you approach a mainstream lender, they will carry out a credit check and if you do not have enough points due to your address history then you will be declined. Therefore, whenever I speak to a client who is either just about to return home or who has just arrived back with their deposit funds and seen their dream house, I turn to one of the smaller bespoke building societies who assess the case on an individual basis.
They will credit search, not credit score.
This means that an underwriter will look at your credit record to make sure that there is nothing untoward in the background, so having an overseas address is not so much of problem for them, if everything comes back okay. So if you are currently living abroad, and you plan to return home and buy a new home within the first twelve months of being back, consider the following advice before doing so;
1. Maintain a correspondence address in the UK – this is usually your parents, or another family member. Anyhow make it someone that you trust as some of your post will inevitably end up going there.
2. Where possible and for convenience, you may want to keep at least one UK current account open, as well as a credit card, however make sure that the bank will allow the accounts to remain open if you live abroard.
3. Have your employment arranged for when you return. It may well be that you are coming back with the same employer – this makes things much easier as you have a history with that company. If you are moving to a new firm you may need to wait until you have had at least three to six months with them; however, if you are staying in the same industry then a letter of appointment with a start date and salary, your contract and an employee reference will be needed.
4. If you are coming back and you want to go self employed then realistically you will not be able to think about buying a new home for at least twelve months, if not longer. The only exception to this might be if you have a contract as an IT professional/oil and gas professional/accountant, with a daily pay rate and experience in that industry, then help may be available more quickly.
5. Have a deposit of at least 25% – unless you are staying with the same employer it is likely that the new lender will cap your mortgage at 75% or lower. Of course, this can change according to product availability.
The above is not an exhaustive list, but it is a good starting point if you are returning to the UK soon and looking at buying a new home. As we can only approach a small number of lenders your choice of mortgage will be limited – these are often a means to an ends, usually on a two or three year basis. At the end of this period we can look at a more mainstream provider, as by then you will have a longer address history back in the UK. So whether you have just returned to Britain after some time abroad, or whether you are planning on coming home in the next six to twelve months and you want to buy a new home, the first thing you need to do is to contact myself or one of my colleagues at John Charcol, and we can provide you with the specialist advice that you will require.
This article is for information only and does not constitute advice. Please obtain professional advice before taking out a mortgage. Your property may be repossessed if you do not keep up repayments on your mortgage, or any debt secured on it.