A leading bank is pulling mortgages for expats and other borrowers from outside the UK.
Royal Bank of Scotland, which owns NatWest, has announced that no further applications will be considered from expats or borrowers already with the banks who want to remortgage.
The ban comes into force on May 19.
NatWest has been a market leader for expat mortgages for several years.
“We have decided to stop offering mortgages for expats because we cannot balance the cost and complexity of safely supplying them to what is a very small market,” said a spokesman for NatWest Bank.
The banks will still offer foreign currency mortgages to UK residents who are working abroad and to service personnel, diplomats and other civil servants on overseas postings.
Limited options for expat mortgage borrowers
“As long as the applicant resides in the UK but are paid in a currency other than Sterling, that’s fine and we will consider lending,” said the spokesman.
Meanwhile, another expat mortgage lender has stepped up lending.
Skipton International will take applications for home or buy to let mortgages from expats.
The lender has received more mortgage applications in the first quarter of 2016 than in the whole of 2015.
Around a third are from expats based in Dubai or Abu Dhabi.
If you are an expat looking for a mortgage on a UK property, the choice is limited to a few lenders.
Expat mortgage lenders
Besides NatWest and Skipton International, other lenders who will consider expat mortgages include HSBC Bank, Kent Reliance and National Counties Building Society.
Other lenders sometimes accept applications from expats who are already customers.
Skipton has recently opened the door on applications from the self-employed.
Regulators in Europe and the UK have recently tightened mortgage lending rules which mean banks and building societies have to prove they have investigated credit histories and looked at loan affordability of applicants.
For some lenders, the cost of complying with the rules outweighs the profitability of offering a small number of loans to expats, which discourages them from staying in the market.
Many lenders have limits on borrowing.
These restrict where in the UK a property is located, income, occupation and where in the world an expat lives.
