Extending our lending criteria to Foreign Nationals

Foreign nationals are an important part of UK society and an essential part of the economy. The political arguments in the broader media, which will get louder and probably more antagonistic over the coming months, are always about the levels of foreign nationals entering the UK. With an election on the horizon, immigration remains a top 5 issue for voters according to Yougov. But these arguments often ignore the contribution many.

According to the Home Office, in the year ending June 2023, there were around 321,000 grants to main applicants on all work visas, 45% higher than in the previous year and almost two and a half times (+144%) the number in the year ending June 2019. ‘Skilled Worker’ visa grants to main applicants rose by 34% to around 69,000, compared to the previous year while ‘Skilled Worker – Health and Care’ visa grants to main applicants rose by over two and a half times (+157%) to around 120,000, compared to the previous year. Dependants accounted for around 218,000 visas granted, representing 40% of all work visas.

Civil engineers, vets, electrical engineers, programmers and care workers all feature in the shortage occupation list which is updated based on the output of an independent group of experts called the Migration Advisory Committee. There is another list and Visa type for medical practitioners and a further type called the Global Talent Visa - a UK immigration category for leaders or potential leaders in academia, research, arts, culture and technology. This Visa allows highly skilled applicants to come to the UK.

The contribution working foreign nationals make to our country should mean they have access to the privileges the rest of us take for granted – such as owning their own home.

Building societies have always been about supporting members of their communities to get on the housing ladder and our communities since our inception have changed – sometimes profoundly. But the concept of helping people own their own home has not. Housing remains one of the most important elements of our economy and will again feature in the issues front of many voters minds as we approach the election.

So what does this kind of help look like for Visa holders? Well the rules around Visas are constantly changing, in part because immigration remains such a live political topic. But our commitment to this market remains steadfast.

Of course, as you would expect, some things remain constant in lending decisions no matter the origin of applicants. We will look at the ages of all applicants and term of the loan to ensure all income declared will provide adequate affordability until the mortgage ends as well as consider all credit commitments and understand the source of the deposit.

But specifically for this market we will accept applications up to 95% LTV, for applicants with Settled Status or Pre-settled Status or Permanent Rights to Reside in the UK and who have been living here for at least the last two years. These applicants can also apply for a loan with another applicant on a spousal visa.

For mortgage applicants holding a Skilled Worker Visa, Health and Care Worker Visa or Global Talent Visa who have 2 years proof of residency in the UK we will consider applications up to 90% LTV on our standard product range or Shared Ownership subject to confirmation from the Housing Association that they are happy to proceed. The applicants deposit must be from their own sources (not gifted or borrowed) and we will consider a BTL application if the applicant owns a residential property. Lending to foreign nationals is a complex, nuanced market that benefits from a pragmatic and experienced approach – one well suited to smaller societies such as ourselves. The rules may change but our approach of helping members of our communities buy their own home remains core to what we do.

Want to know more? Get in touch with our award winning team on 0345 601 2744, or send us an email at intermediary@cambridgebs.co.uk for more information.