BTL Mortgages For Foreign Nationals With Limited Leave To Remain

Buying residential property in the UK can offer lucrative returns – even if you’re unable to extend your visa and secure permanent residency. For that reason, many entrepreneurial foreign nationals who are either currently residing in the UK or have returned overseas may look to invest in property. 

Though there are many benefits to buying residential property in the UK, one thing all foreign nationals must understand is that it does not grant you indefinite leave to remain. Owning property is not the same as securing settled status. 

Though buy-to-let (BTL) and houses-in-multiple-occupation (HMO) mortgages are both popular options for investors, anyone without indefinite leave to remain may struggle with stricter lender expectations – which is where Rangewell can help. 

To secure a mortgage without indefinite leave to remain, you’ll need to provide detailed financial history to lenders who will be worried about the possibility of you returning overseas and defaulting on the loan. 

Here at Rangewell, we’ll find you lenders who specialise in supporting foreign national investors, whether you’ve got limited leave to remain and may be granted indefinite leave in future – or even if you intend to return overseas and want to simply invest in the UK market to generate income. With our guidance, you can explore the options that are right for you and secure the best possible interest rates and terms to support your long-term goals. 

Speak to our team now to get started or keep reading to learn more about mortgages for foreign nationals. 

Do you need to be a UK resident to buy property? 

No, there is no legal requirement for you to be a UK citizen or have any form of leave to remain in order to buy residential property. However, you can’t purchase property to use as your residence unless you have either limited leave to remain and still have time left on your visa, or indefinite leave to remain. 

Does buying UK property grant indefinite leave to remain? 

Indefinite leave to remain is the equivalent of settled status in the UK and means you are no longer subject to immigration control. Contrary to some popular misunderstandings, you do not get indefinite leave to remain if you buy property in the UK. 

One consideration worth bearing in mind is that to secure indefinite leave to remain, you’ll need to have resided in the UK for a certain number of years (depending on your individual visa terms) – so owning and living in property may help demonstrate stability and financial responsibility. 

Can you get a mortgage with no leave to remain?

If you don’t have indefinite leave to remain, you represent a risk to a lender. Even though there’s no legal requirement for you to reside in the UK to buy property, mortgage providers still perceive it as a challenge because you may return to your home country and default on the loan.

Additionally, because your credit and financial history may have been built up in other countries, lenders may be unwilling to provide the type of finance needed to make your investment worthwhile. 

Essentially, this means that whilst you CAN get a mortgage without indefinite leave to remain, it will be harder to find supportive lenders and you’ll have to offer a more sizeable deposit – often up to 25% of the total value. 

Rangewell can help resolve these problems on your behalf. We’ll help you find the right lenders AND the best type of loan – all at no cost to you. 

 

What type of property should foreign nationals invest in? 

Freehold vs leasehold for foreign nationals

The first thing to consider is whether a property is freehold or leasehold. A freehold property means you own the land and property, whereas a leasehold means you own the property but someone else owns the land and leases it to you. 

If you buy a leasehold, you may need to renew the lease or commit to certain costs or conditions (such as paying a block management fee in an apartment block). If you don’t have definite permission to remain in the UK, it’s better to instead buy a freehold so you don’t need to deal with these complexities at a later date – especially if you have to leave the country and then get re-involved in negotiating lease conditions. 

Buying options for those with limited leave to remain

If you’ve got limited leave to remain, you might want to buy residential property to act as a home until you either leave the UK or are granted indefinite leave. As such, foreign nationals often purchase flats and homes like any other UK citizen. However, you should always do this with a view towards the future by asking: what type of property is going to be valuable to me even if I have to leave the UK?

The answer comes in the way of buy-to-let mortgages, which allow an investor to purchase a property and then let it to tenants to generate rental income. You can either refinance your existing property into a BTL, or take out a new one, and quickly secure a reliable source of long-term income that leverages the UK’s strong rental market. 

HMO mortgages are another strong choice. These are taken out on larger buildings where multiple tenants are included in the same lease. Student accommodation and professional flatshares are popular forms of HMO and are worth exploring as a foreign national. 

In both BTLs and HMOs, you may find opportunities (depending on the property type, size and planning permission) to reside there whilst also letting it out until your leave to remain expires – upon which date you’d simply find a new tenant to replace you and then leave the UK, but retain your ownership and use it as a source of income. 

You will need to consider how you manage the property once you leave the country (or if you’ve already left). Landlords have a legal responsibility to support tenants and keep the property in good condition – so you’ll need to explore property management services offered by agents or arrange for work to be carried out directly with cleaners, contractors and any other services your tenants may need.

Get a mortgage with limited leave to remain from Rangewell

Regardless of your domestic status, we can help you find lenders that are willing to support your buying plans. Get in touch with our team to discuss your goals and we'll demonstrate how we can help.