Royal-Bank-of-Scotland-Cash-machines-queuesTHE Royal Bank of Scotland and Natwest will stop offering mortgages to expats from May 19.

From then on, applicants must be resident in the UK in order to be eligible.

Many claim the banks are turning their backs on Britons abroad, but some experts have said new EU regulations on home loans, which took effect on March 21, have meant more work for lenders due to increased complexity of the process.

The ban includes expat customers requesting additional borrowing, but applications will still be considered from serving members of the armed forces, UK diplomats and UK consular staff.

Mortgage broker Enness Private Clients said: “It is very disappointing to see yet another high street powerhouse turn its back on hard-working British expats.”

It added: “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.”

Some of the banks’ international divisions will still offer expat mortgages, alongside several UK private banks and a few building societies.

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6 COMMENTS

  1. Why is it, Fred? UK banks are not the only banks, however, they are some of the most expensive! Don’t worry people, Spain does have banks too. And beaches. And sun. And cheaper EVERYTHING! Who would want to live in the UK? It baffles me. Crap weather, crapper food, crap government, crap everything. But if you’re scared of moving a bit far away from mummy, don’t worry, more Spain for me!

    • Andy, if expats cannot get funding from one of the affected banks then it could stop them from purchasing. I already heard some news about a family who were renting for a few months whilst looking for a house. They were recently resident in Spain and their children had started in Spanish schools etc. They wanted to purchase a property and needed a mortgage, and that was being done through their own UK bank, which I understand was RBS. They were now expats of course, so this has halted their plans, at least for the moment. I suppose they can seek a mortgage from a Spanish bank, but it will be more difficult because all their financial history is at their other bank. I can see this putting off many other people in similar predicaments. Mortgages in Spain, despite what the press say, are not that easy to obtain.

      Btw, the Spain is “cheaper for everything” argument is another debate all in itself. To be resident here and purchase a property you’ll need to pay around 10% of the overall purchase price for lawyers and purchase tax, which is a very large amount, especially if your purchase price is significant. Selling is expensive too of course. You will pay significantly more for many things that you take for granted in the UK, especially reliable Internet costs and UKTV if you need it, and of course gestor (accountants) costs for all of the lovely Spanish paperwork. You might pay less for some things, granted, but Spain has a habit of building up costs for lots of little things over time. If you work self-employed in Spain, you have to pay a lot in autonomo fees (up to a whopping 250 euros a month) so that certainly is not cheaper than the UK. Everything is relative of course, and if you are paid in Sterling your money will go a lot less further now, because of all the uncertainty in the markets. So, not everything is cheaper Andy.

      The other points you raise are a bit subjective and a bit sweeping in nature lol. I’ve never eaten crap food in the UK, although it is available if you want it, I guess. Spain has had no government since the turn of the year, and to be honest they are pretty crap too, if you read what’s been going on with corruption cases recently – do you read the Spanish news?

  2. You’re right about one thing Andy, Spain doesn’t have a crap government, it actually hasn’t got one at all and no prospect of having one in the foreseeable future. Good title for a song – “Anarchy in Iberia”.

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