GOODBYE GORDON – YOU WON’T BE MISSED!

Following his rejection by the bulk of the electorate not on benefits or employed in public service, Gordon the Moron seems to have disappeared! As abject in defeat as he was arrogant in power, little has been seen of him at Westminster since his reluctant departure. There are rumours that he might be writing a sequel to his book ‘Courage’?

Whilst still in it’s honeymoon period, the Cameron/Clegg double act seems to have performed with creditable speed on a number of issues.

Disappointing is Cameron’s semi u turn regarding termination of the FSA (Futile, Supine and Anal). Recently under threat of their dissolution, the regulator engaged in a burst of frenetic energy. Perhaps it was enough to convince naïve politicians that this devil they knew was better than a possible alternative. Whatever happens you can be sure we will be stuck with the same unnecessary, overbearing bureaucratic monster under whatever title. At the time of the election the FSA had nearly 200 employees earning between £100K and £200K and over 140 earning more than Cameron himself. This is and was an obscenity!

According to the Halifax and Nationwide Property Indices, average property prices increased in 2009 and for the first quarter of 2010. These indices are rendered meaningless by the distortion inflicted on them by soaring Central London prices and the inclusion of northern city centre investment properties which remain unloved, unsold and untenanted. Latest indications however seem to show that what had been perceived to be an improvement for sellers has ground to a halt. Certainly we are seeing stagnation in prices in the usually favoured areas of Surrey, Berkshire etc.

In lending, our greedy bankers having sucked people in to some of their overpriced fixed rate offerings, are giving little sign of doing anything to help the housing market for borrowers unable to attain the funding they require by doubling their effort on credit scoring and client selection. This just ensures that only those that don’t need the money can get it. It’s almost as hard now, as a UK resident, to obtain 75/80% funding as it is for the historically and still disadvantaged expatriate borrower. Whilst there are new lenders making an appearance in availability lists, they are unlikely to make any impact in terms of volume. EFG. Handelsbank and Standard Chartered are not content with their onerous 1% or so arrangement fees. They look for the client to invest with them as well as borrow from them. As there are, albeit limited, lenders that will lend without these qualifications they need to produce something pretty special to be considered in this market place. An up to date A-Z of Expatriate Mortgages follows on from this ‘newsletter’.

EXPATRIATE FAMILY OCCUPATION

Family occupation expatriate loans are a rapidly increasing requirement. Fundamentally the breadwinner stays in their highly paid, tax efficient employment whilst the partner and/or children relocate to the UK. Unfortunately main stream lenders remain unhelpful to these people as they will not pass the all important credit scoring attempted by the box tickers who determine application outcomes with these lenders. Thankfully there are a handful of lenders who will treat expatriate family occupation situations including where the property is occupied by siblings, parents or children at university without box ticking
dependence. IMP have always set their stall on being able to provide to the expatriate identical terms to those they would achieve on the high street in the UK.

A new game for lenders is the refusal to lend on an interest only basis. Nationwide and Lloyds (C&G) have led the way in this. In the latter case lending rates are being increased by .2% where interest only loans are granted, if granted at all! Cynically we feel that, rather than altruistic motivation, the lenders just find this type of loan arrangement more profitable. As expatriates are able to offset rent against mortgage interest it has always been established by specialist taxation accountants that interest only loans are very much in the expatriate’s favour. Almost without exception we find that our expatriate clients are perfectly able to repay their main UK borrowing via disposal of other assets, property or otherwise, as and when their expatriate days are over – or not! We now have reports of Nationwide fundamentally reneging on agreements made at the time they took over the Portman in imposing interest rate penalties where the property security has been let for more than three years. At a meeting held with IMP at the time of the takeover it was agreed that Portman borrowers would not be disadvantaged by the takeover, and we will be resisting Nationwide’s attempt to change terms in as strong a fashion as we can. If your borrowing was with Portman, or Lambeth also acquired by Nationwide, it would make good sense to contact us if you receive notification from Nationwide that they propose to load your mortgage rate.

Stories of expatriate enquirers or applicants being let down by ‘big name’ lenders are legion. HSBC, Nationwide and Lloyds are names that crop up on a daily basis.

It is advisable that expatriates seek approval in principle prior to making onerous and costly applications to purchase, finance or refinancing. IMP are able to offer acceptances in principle without cost or commitment from their lending contacts.

Call or complete our website enquiry form for a speedy response and an indication of availability and lenders terms.


Adrian Wright
July 2010
 

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