Overseas investors looking to expand their BTL portfolio in the UK
A broker approached MFS seeking a buy-to-let mortgage for foreign national clients purchasing a residential property. They were aiming to expand their BTL portfolio by acquiring a newly built flat in the North. However, as they were based abroad, a number of hurdles emerged during the process.
The borrower’s property portfolio stretched across Southeast Asia and the UK. Despite having a footprint in England, we had to adapt as problems popped up during the credit check and legal stages.
The property in question was in a good condition and based in a prime location. As such, we had to provide flexibility in working with the broker to make sure the buyers didn’t miss out on the opportunity.
Assessing the whole picture, rather than a single piece of a puzzle
The broker was assigned to a dedicated underwriter who made sure funding was issued as quickly as possible. As the buyers were based offshore, it proved difficult to obtain certain details during the assessment process. To resolve this, we gathered information on the client’s relevant UK assets to support the loan.
Our solicitors also flagged a potential issue in the lease agreement, which may impact the ability to exit the facility. We raised these concerns with the valuer, who explained that so long as insurance was obtained, the valuation figure would be protected. Knowing this, all the parties involved were comfortable in moving forward.
Our experience in moving quickly ensured no time was lost as we found solutions. Having strong relationships with valuers, we were able to have the valuation report done in a single day.
Assessment flexibility + strong exit strategies = positive outcomes
Our ability to be flexible in assessing the borrower’s entire picture helped get this deal over the line. While roadblocks can emerge when dealing with overseas investors, we specialise in finding solutions and keeping everyone reassured along the way.
We underwrite from day one, making sure brokers and investors are never kept out of the loop. In this case, given the borrowers vast experience and existing portfolio, we were comfortable the loan would be covered.
With rental income expected within a few months, and confirmation that refinancing would be possible down the line, the exit strategy sat on solid foundations.
The UK property market continues to hold a lot of potential for British and foreign investors alike. Rental values in prime London locations jumped by nearly 30% in April, according to Knight Frank. This demand is believed to be driven by workers returning to the capital.
Additionally, rental yields in the North of England present opportunities for buyers. Average rents in the North-West, where Manchester and Liverpool reside, hit £811.16 in May 2022. A year earlier, the figure sat at £730.18, according to Goodlord.
There could still be plenty of room to grow too, with the supply of rental properties struggling to keep up with demand. To find out what you need to know about BTL investment, download our guide to bridging and buy-to-let or read our blog examining the benefits of the market.