Leadind bank Santander has barred applications from non residents
Jim Coupe, managing director at Skipton, said while the full details of the Brexit trade deal negotiations have yet to be decided, it is clear that some UK banks are withdrawing their offerings to those living in the EEA. However, the lender does not plan to change its offering for UAE residents.
“Skipton International, being based in Guernsey which is outside of the EU, will not be making changes directly as a result of Brexit, for us it is very much business as usual where we will continue welcoming applications from across the globe,” he said.
The lender said it has seen record demand in the second half of this year, driven in part by the announcement by the UK Chancellor of the Exchequer of a stamp duty holiday until the end of March 2021 for properties worth up to £500,000 ($671,486).
“Together with a 2 per cent surcharge for foreign resident buyers coming into force on April 1, there is an incentive of up to £25,000 for property purchases to complete by the end of March,” said Mr Coupe.
For EU residents either living in the UK or living in Europe, the situation is more complicated.
Mortgage lenders have always considered those who need specific rights to reside in the UK to be a slightly higher credit risk because there’s a chance their right to reside could be taken away in future, potentially leaving them in a more difficult position regarding their properties and mortgages.
However, providing the borrower has EU national settled status, they should not have any more difficulty than British residents in the UK in securing a mortgage.
For example even non-EU nationals with indefinite rights to reside in the UK have been treated the same way as British borrowers for years. It boils down to whether there’s ever a risk that the borrower could be deported during the term of the mortgage. If not then the risk is viewed the same as a Briton’s.
UK mortgage approvals reached their highest level in 13 years in November as tighter Covid-19 restrictions failed to dent strong demand for home loans, according to Bank of England data.
The central bank said there were 97,500 loans approved by lenders in October – the highest figure since September 2007. Meanwhile, house prices recorded their strongest growth since 2004 in November, with the average home now selling for £253,000, according to the Halifax’s House Price Index.