Overseas Mortgage - Buy to Let in The UK

boab88 on 20/01/2017 - 05:17

Hello everyone,

I am a UK expat living longterm in Sydney. I'm currently renting an apartment in Sydney which we are happy with and relative to the Sydney prices it is not bleeding me dry!

In the last year or so my partner and I have gotten more financially secure and we are now starting to think about the daunting task of buying a property in Sydney. The sums only make sense if prices keep increasing and I believe prices are out of touch with normal people's income. I'm convinced if I was to mortgage myself up to the hilt to get into the market here I would be the last chump to do so before it either crashes or goes flat for a long time. (Having said that I thought that 5 years ago when I arrived and I was proven very wrong!)

I already have a buy to let property in the UK which I've owned for years and the rent more than pays the mortgage & costs (with capital repayment). I'm lucky in that my family maintain a few buy to let properties in the UK so I don't need an agent my father rents out and looks after the property and has capacity to look after more.

I noted recently that a similar rental property in the part of the UK I'm from costs about 1/6th of the price of the same property in Sydney and I'm considering to keep renting in Sydney longterm and buy another property in the UK.

My question is can anyone point me in the right direction of mortgages I can get in AUD against my Australian income that allow me to purchase overseas? Does anyone have experience in doing this? Can you share them?

One thing I'm aware of is that due to currency fluctuation I'm at risk of mortgaging and then owing more than the property is worth. However I think what mitigates that is that
This is a long term investment strategy
The size of the mortgage would be allot less than my earnings so I wouldn't be overstretching myself in repayment terms
A historically weak GBP due to Brexit

All input & guidance welcome. Thanks all!

Financial

Comments

  • mskeggs on 20/01/2017 - 08:28

    I am not aware of mortgages, perhaps investment loans (attracting a higher rate)?. These would need a higher deposit.
    Note also that the UK has a witholding tax on rental income.

    • mskeggs on 20/01/2017 - 09:32
      +1

      Or maybe talk to your UK bank? With some UK income from your existing investment, and your AU income, they might be able to do a loan.
      I remember when we bought a house in the UK that it was necessary to be a resident to get an owner/occupier mortgage, but a buy-to-let might be different.

      I would send an email to a UK mortgage broker and ask what they suggest. There are so many UK property owners living in France/Spain etc. I imagine they get asked reasonably frequently.

  • chumlee on 20/01/2017 - 08:31
    +1

    Maybe try HSBC as they operate retail banking in both countries.

  • naritas on 20/01/2017 - 11:34
    +1

    In our experience, as a general rule, Australian lenders are unwilling to provide mortgages where the collateral for the mortgage is not located in AU.

    Limited exceptions to that general rule usually come from global lenders/banks (such as HSBC which Chumlee suggested, but also others) and when the local bank is dealing with high net worth borrowers (i.e. people who own local businesses, have big share portfolios or own local real estate) because the risk to the lender can be mitigated by virtue of the borrower's otherwise strong financial position.

    Quite possibly your best bet is as Mskeggs suggested, that is, chat with a UK mortgage broker or bank. They may be inclined to look at the aggregate of your UK and Australian income (rents/wages). In our direct experience, this route has often proven cheaper than dealing with an Australian subsidiary of a global bank for all but the wealthiest of applicants.

    Hope this helps.

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