Commercial Mortgages for Expats & Overseas Buyers UK
If you are living abroad or moving from overseas and want to invest in property, you may be wondering how to secure a commercial mortgage.
For expats and foreign nationals, arranging this type of finance can be more complex than a standard mortgage.
Lenders often see international clients as higher risk, particularly when there is limited credit history. However, with the right advice and access to specialist lenders, you may be able to secure the funding you need.
What is a Commercial Mortgage for Expats and Foreign Nationals?
A commercial mortgage is a loan secured against a property that is used for business purposes. Unlike residential mortgages, commercial borrowing is assessed on both the property and the financial strength of the applicant. Lenders will look at the proposed use of the commercial property, including who will be occupying it. This may be a UK business owned by an expat / foreign national applicant, or a commercial tenant.
For expats and foreign nationals, the process involves additional checks and requirements.
Commercial mortgages may be used for:
- Purchasing offices, warehouses, retail units, pubs, hotels, etc
- Mixed-use properties with both residential and commercial elements
- Investment opportunities such as buy-to-let portfolios
- Refinancing existing properties to release capital
If you are earning abroad, newly relocated, or do not have a domestic credit footprint, you will need lenders who are experienced in working with international clients.
Can a Foreign National Buy Commercial Property?
Yes, you can legally buy commercial property in Britain as a foreign national or expat, and there are no restrictions on ownership. A challenge can be financing, so approaching the correct lenders will be key, as securing a commercial mortgage as a non-resident or expat requires careful planning.
You may also need to consider additional costs such as higher Stamp Duty Land Tax, stricter identity checks, and potential tax implications. Some commercial properties also attract VAT so make sure that you do your due diligence.
This makes it important to seek both mortgage advice and tax guidance before committing to a purchase.
Find out Your Options
Why Commercial Mortgages Are Harder to Get
Securing a commercial mortgage is generally more complex than obtaining a residential one. Lenders look beyond personal income and focus on the long-term viability of the property and your business plans.
Some of the challenges may include:
- A larger deposit requirement, often 25% or more of the property’s value depending on the lender
- Stricter lending criteria, with lenders scrutinising cash flow, debts, and projected income, or a strong understanding of the commercial tenant’s finance to ensure they are in a position to pay.
- Longer processing times, with applications sometimes taking several months
- The need for detailed business plans, especially for newer companies
This is why many expats and foreign nationals find that approaching lenders directly can lead to rejection or unfavourable terms. If you are in this position, it would be recommended to speak to a professional broker.
Some of our clients live in countries such as the United Arab Emirates, Australia, Canada, across Europe or the United States and more. Some lenders are familiar with applicants from these regions and can often accept that you receive personal income in foreign currencies when assessing your application.
While requirements vary depending on your circumstances, being based in established markets like the UAE, Australia, Canada, Europe or the USA can help demonstrate financial stability and strengthen your mortgage application, but it depends on the lender that you use.
Having said this, the main concern for lenders that allow expat and foreign national borrowers is the property itself, and the tenant that will be occupying the property, as this is what will generate the income to pay the commercial mortgage.
What Deposit is Needed for a Commercial Mortgage?
The deposit required will depend on the type of property, your financial circumstances, and the lender’s criteria. Typically, you should expect to provide around 25% of the property’s value as a deposit. In some cases, deposits may range from 20% to 40%, depending on the situation and the lender.
By working with an experienced broker, they can look for lenders who are more flexible and secure terms that suit your situation. This can be especially important if you are investing for the first time or building a property portfolio from abroad.
Commercial Remortgages to Raise Money
If you are an expat or foreign national, and already own a UK commercial property, you may be able to release equity by arranging a commercial remortgage.
This can be a practical way to raise money for business expansion, debt consolidation, property improvements or even funding the purchase of another investment.
By refinancing your property, you may even be able to access more competitive rates or unlock capital that is tied up in the building.
Commercial Mortgage Case Studies for Expats and Foreign Nationals
We have helped expats and foreign nationals explore commercial mortgage options for UK property, including first commercial purchases and applications involving more complex residency or income arrangements.
The case studies below show real examples of customers we have helped and demonstrate how factors such as residency status, income, deposit, property type, business experience and lender criteria can affect the finance options available.
Conclusion
Securing a commercial mortgage as an expat or foreign national can be complex, but it can also be achievable with the right approach.
While lenders may view international clients as higher risk, there are lenders that have an appetite for these cases when the application is strong, and the lender can clearly understand full details of your situation, finances and the tenant that will occupy the building.
Contact Kerr & Watson today to discuss your commercial mortgage needs.
