From 19th May, two of the UK’s largest banks, NatWest and the Royal Bank of Scotland, will stop offering mortgages to all expats – including Brits living abroad.
“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.
However, while NatWest and RBS both said they would no longer offer mortgages to expats, including current expat customers requesting additional borrowing, they did say that applications will still be considered from serving members of the armed forces, UK diplomats and UK consular staff.
Many financial experts believe that new European regulations on home loans introduced in March have made the process of overseas lending too complex and this is why a number of British banks have stopped offering mortgages to non-residents.
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.
In a statement, Mortgage broker Enness Private Clients said: “It is very disappointing to see yet another high street powerhouse turns its back on hard-working British expats.
“We suspect this is as much a function of too much business coming its way as a result of the steady stream of lenders closing their doors – probably compounded by the effects of the European mortgage credit directive in March.”
Article by David Fuller