The expats are being shunned by lenders in the UK. British banks and building societies are unwilling to lend to British expats who live in the EU because of the uncertainty surrounding Brexit relations between the UK and Brussels. There has now been a “significant drop” in the amount of EU-based UK nationals buying property in Britain.
However, British expats who live in other parts of the world, do not face the same obstacles.
Guy Stephenson, of mortgage broker Offshoreonline, told The Telegraph: “With no comprehensive financial settlement being part of the UK Brexit deal, many of the biggest British building societies have decided to stop lending to EU residents who live in the EU.
“This is until the position is clarified.
“This has limited the supply of lenders.”
The Daily Telegraph reported that one borrower, a UK national living and working as a teacher in Germany, was turned down for a mortgage by a British building society.
This was despite meeting its deposit and rental income criteria.
However, speaking to the Daily Telegraph, Mr Stephenson said: “We got him lending with an international bank based outside mainland UK.”
The news comes after a 2020 trade deal between the UK and the EU did not include terms on financial services, making cross-border lending harder.
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The vast majority of the lenders that offer buy-to-let mortgages to expats are smaller building societies.
Chris Sykes, of broker Private Finance, said: “The EU was always considered a safe bet for lending.
“But with so much uncertainty surrounding banking relations, the smaller, niche lenders who dominated the expat market have pulled back.”
Expat buyers who want to invest in property in the UK will need to pay a premium.
Mr Sykes added: “Expat buy-to-let deals will typically be in the three percent range and above, compared to normal buy-to-let mortgages, for buyers living in Britain, which start from around 1.8 percent.”