Many Australians still believe that the UK property is a good solid investment. In many cities, there is a lot of demand for rental properties, and the market is very large. As a British expat, you can still get a mortgage if you live in Australia and want to buy a home in the UK. You just need to make sure that both countries know how to check income, follow currency rules, and file the necessary taxes.
If you are looking for buy-to-let mortgage in the UK, the lender will look at your income in AUD and convert it into GBP. They will stress test your budget with a cushion to allow for changes in the exchange rate. Some expat mortgage lenders offer expat BTL mortgages with affordability criteria that depend on how much rent the property will generate. This means that the rental income has to be more than a certain amount more than the monthly mortgage payment.
When you sell a UK buy-to-let, the UK government may make you pay Capital Gains Tax on the money you make. If you live in Australia and pay taxes there, the gain may also be taxed there. This might sound scary, but there are tax laws that stop people from paying taxes twice. Usually, you can get credit for taxes you paid in one country in the other. Keep an eye on costs like stamp duty, legal fees, and property improvements because they can all eat into your profits.
When you sell is also important. Your tax situation may change if you plan to sell after moving back to the UK. Changes in the value of the Australian dollar can also affect your returns if you keep the property for a long time. One easy plan is to keep track of all your expenses from the beginning and talk to a tax expert in both countries before you sell. A clear plan can help you make sure that your capital gains strategy fits with your bigger life goals.
UK Mortgage lending for Australian Residents
UK expats living in Australia can get UK mortgages from specialist lenders. They will want to see your ID, proof of address, pay stubs or tax returns, bank statements, and information about any loans you already have. Some lenders will also want to see a credit report from the UK. A lot of lenders want a bigger deposit for an expat buy-to-let mortgage in the UK.
If you live in Australia and want to buy or remortgage a house in the UK, you should expect a full check of your visa and work status. People who work for themselves may have to show two years’ worth of tax returns or accounts. Most of the time, salary income is easier to use, but many lenders will also look at bonuses and allowances. An expat mortgage broker can help you find lenders who will accept your income and currency if you live in Australia and want to buy or refinance a home in the UK.
British citizens who live in Australia and want to get a mortgage on a home they already own in the UK can also get one. If rates go down, a remortgage can help you save money. A fixed rate can give you peace of mind in GBP terms if the pound gets weaker against the Aussie dollar.
Is London the best place for you?
Because of high demand and global liquidity, some Australians want a London BTL mortgage for an Australian resident. London may be more expensive and have lower rental yields than some other regional cities, but there is still a lot of demand from tenants, and the market is usually stable. If you focus on a central flat near public transport or a neighbourhood where people always want to rent, your rental income should remain steady.
If you’re seeking a London BTL mortgage for an Australian, be ready for harder stress tests. Lenders might think that rental prices are higher than they are. Newly built apartments or very small units may have extra restrictions and conditions. When seeking an expat mortgage, a broker can help you look at different lenders’ requirements and postcodes. They can also help you get the right rental cover by changing the size of your deposit, the type of interest rate, or the length of your mortgage term.
Steps to take with money, rent, and simple steps
Changes in the exchange rate can affect your GBP budget because you earn in AUD. A lot of borrowers keep a small amount of GBP on hand to help when the AUD drops. A fixed rate can help you make plans. Some investors also lock in FX rates by making regular transfers or signing forward contracts.
Make the process easy:
- Find out how much money you can borrow as an Australian citizen who wants to buy a home in the UK.
- Get all of your paperwork ready in both countries.
- Pick a property that meets the lender’s rental income needs.
- Be ready to show proof that you have the money for a deposit.
- Work with an expat mortgage broker with whole-of-market access to all lenders and will hold your hand through the entire process.
A full, well-prepared file can often help you get mortgages for British expats faster.
Conclusion
If you want to get an expat BTL mortgage in the UK, working with an expat mortgage advisor can help you save time and stress. Expat Mortgage UK is a mortgage broker that helps expats and Australian residents buy UK properties and rent them out. We work with ALL the expat mortgage lenders, deal with time zone differences, and give you a free Expat Mortgage Calculator.
If you live in Australia and want to buy a property in the UK, our team can help you every step of the way, from your very first contact through to completion.
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