# Living in Spain, buying property in the UK



## rocketronnie_ (May 16, 2016)

We currently live in Spain (renting) and we have a good sum of money that we want to put towards buying a holiday home (we'd be first time buyers) in the UK. We most likely will be moving back to the UK in the next few years anyway.

My question is, is it easier / better / worth it to just wait and buy a house when we've already moved back to the UK? If so, we'd probably just keep using our families homes as holiday homes - like they do to us  

I just can't help but think that moving back would be simpler if we had a home waiting for us there already, we could keep working here until we find the appropriate work in the UK and then just move on over. In the mean time, we have enough disposable income at the moment to afford mortgage repayments whilst also covering our current living costs. Also, putting our savings into property seems a better idea than just letting it sit in the bank for the next few years?

I guess it comes down to what is the main difference between getting a mortgage for a UK property whilst living in Spain vs getting a mortgage for a UK property whilst living the UK. Does anyone have any experience with this? 

Thanks in advance,

Cee


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## Williams2 (Sep 15, 2013)

rocketronnie_ said:


> We currently live in Spain (renting) and we have a good sum of money that we want to put towards buying a holiday home (we'd be first time buyers) in the UK. We most likely will be moving back to the UK in the next few years anyway.
> 
> My question is, is it easier / better / worth it to just wait and buy a house when we've already moved back to the UK? If so, we'd probably just keep using our families homes as holiday homes - like they do to us
> 
> ...


I'm answering this on the assumption that you intend to buy your new home back in the UK on a 
mortgage and therefore intend to take out a mortgage with a British bank or building society in order to secure a mortgage to cover the balance of the purchase for your new permanent home in Britain.

If that's the case - then the best advice is. If you can afford it ? buy your new British home outright with your savings or alternatively wait until you have returned to the UK and have become established in your new permanent British job for at least 12 months before applying for a mortgage.
Also once you've been back in Britain for a year or two, you would have also re-established your British Credit
history with the British Credit Reference agencies, Experian & Equifax.

The reason I say this is -the Mortgage Market Review rules that came into force on the 26th April 2014
with all the affordability tests that came with it. That are stringently being applied by all British banks, building
societies, etc following the crack down on irresponsible lending that contributed to the banking crisis of 2008.

I have no intention of going into detail about the MMR rules that are no doubt better
explained by searching the internet and checking articles from the financial pages
of British newspapers, like The Guardian below.

The Guardian - Need a mortgage ? New Rules mean you will have to ditch all those little extra's and annual subscriptions

Also if your do manage to find and buy a house in the UK. Than again you will be hit
by tougher and tighter lending rules for Expats who want to rent out their property.

Quote:
From March 2015, Expats who want to take out a mortgage on their UK property to rent them out, will be affected by a tougher new affordability test because of a new
EU directive coming into force. Currently, expats already need the permission of their 
expat mortgage lender to rent out their UK property but this latest crack down on mortgage lending criteria will make it increasingly hard for UK expats to maintain property back home.

With around 350,000 people leaving Britain each year to live and work overseas, many want to keep a home back in the UK so they can return one day. Some stay abroad for many years and opt to let out their main residence rather than sell it, so they can keep a foothold in the UK property market, as well as generating rental income.

*Expat Mortgages*

All expats who take out new mortgages from March 2015 are expected to be affected because they will be taking out foreign currency mortgages (that is: a mortgage repayable in a currency other than the currency of the country in which the borrower resides). For example, expats living in Spain who take out a UK mortgage on their UK home will typically borrow in sterling. However, they will be living and working in Spain and therefore paid in Euros, a foreign currency for the purposes of UK mortgage lending under the Financial Conduct Authority (FCA) rules.

The requirements in the new European Mortgage Directive mean that mortgage lenders must consider the exchange rate risks when lending to expatriates, proposing to rent their homes. The new rule comes on top of the more stringent 'stress tests' on new mortgage applications that came in April 2014. This new rule means lenders will check to see if a mortgagee can afford the rate over the next 5 years, 
together with anticipated interest rate rises.

Expats buying or renting out UK property on a British mortgage face tougher rules

Finally - I have had personal experience of applying for a mortgage on my home in the UK - following the
MMR changes. All I was looking for was a remortgage, in order to get a fixed rate on my monthly mortgage 
payments.
Suffice to say I hit a brick wall, in getting any of the British banks & Building Societies to consider me, what
with me being resident in Spain and earning a Spanish salary in Euros. Even going through Mortgage Brokers
made no difference - as the feedback I got was they wouldn't even consider British Expats now, unless they
had a single or combined salary or income of £100,000 or more and were looking for £100,000 plus mortgages.


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## rocketronnie_ (May 16, 2016)

Thanks so much for your reply


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