Mortgages 

Has appetite for overseas mortgages changed?

This article is part of
Guide to advising on overseas mortgages

Has appetite for overseas mortgages changed?

Moving overseas has always seemed like a golden opportunity but has the appetite for buying abroad changed in the past decade?

Even with the credit crisis cutting into people's savings and pushing up their borrowings, it seems from data that many Britons still want to, or have to, seek a new life abroad.

Latest Office for National Statistics (ONS) data has put the number of British nationals seeking the life of an expat at an average of 300,000 a year. 

Currently, there are more than 4.2m British citizens living abroad, according to data from Expatica

Some 900,000 of these live in Europe, many of whom go there to work, but the three most popular places to live globally are: 

1. Australia – 1,289,396 expats (perhaps they took advantage of the £10 tickets during the 1960s).

2. USA – 714,999 expats.

3. Canada – 607,377 expats.

When it comes to Europe, there is still a large percentage of UK citizens living on the Continent; there are 1.2m as at the end of 2016, with 900,000 of these being long-term (longer than 12 years resident).

ONS data, compiled from Eurostat, shows:

  • 900,000 UK citizens are long-term residents of other EU countries; the largest age group is aged 30 to 49 years.
  • Spain is host to the largest number of British citizens living in the EU (308,805); just over a third (101,045) of British citizens living in Spain are aged 65 years and over.
  • France, Ireland and Germany are also home to relatively large numbers of British citizens.
  • There is a large difference between numbers of UK born (287,600) and UK citizens (112,090) in Ireland.

People are leaving Britain for various reasons: work, retirement and lifestyle, and many of them end up needing to take out a mortgage to buy a property in their new country of residence.

This could be as a primary or secondary residence, or even as a holiday destination for those quick get-aways.

Daniel Howarth, head of Enness International, comments: “British citizens as a demographic continue to have a huge appetite for second homes and investment properties at favourite holiday locations in France and Spain.”

So certainly there is an appetite still to live, work, retire and holiday in your own home abroad, but has the mood for borrowers and lenders changed?

Appetite

The answer is, it depends. Some respondents to this guide believe the overall appetite, based as it often is on lifestyle decisions and the potential for low interest rate mortgages across many countries currently, will continue to keep the overseas mortgage market buoyant.

Julian Sampson, head of lending for TWM Solicitors, says: “The UK exports homeownership well, and has done for some time.

“The United Nations Department of Economic and Social Affairs published an overlooked report in 2011, which focused on children leaving the family home, but this reinforced the generally-held view that Britons love homes.

“The availability of relatively inexpensive credit, the lack of any useful deposit interest on cash, and the UK media promulgating how cooked the UK mortgage market is, suggests overseas may hold sway.”

However, there is data to prove that, since the credit crunch started in 2007, with a run on Northern Rock in the UK, banks and banking regulators have tightened up lending criteria significantly. 

In the UK alone, statistics from the European Mortgage Federation reveal lending domestically is still below its 2007 lows, despite nearly a decades’ worth of super-low bank base rates, now at 0.25 per cent as of August 2016.