Nottingham Building Society is today launching an innovative mortgage solution designed to support the growing number of foreign nationals who work in the UK and are looking to own a home.
The new product addresses a growing need from mortgage brokers who say existing products are too restrictive when supporting skilled workers from abroad who are looking to borrow money to buy a home.
Most notably, it does not require borrowers to have spent any minimum length of time in the UK before applying, something no other UK mortgage provider can match*.
A lack of credit history is one of the main reasons why foreign nationals, particularly those who have been in the UK for less than a year, currently struggle to get a UK mortgage. So Nottingham Building Society has partnered with cross-border credit bureau, Nova Credit.
This will allow mortgage brokers to access historic credit files in a growing number of countries worldwide, including India, Philippines, Australia, US, Canada, Germany, Austria, Spain, Switzerland, Mexico, Dominican Republic, Kenya and Korea.
Nottingham Building Society’s new product will enable brokers to resolve challenging cases based on the following criteria:
· No minimum time of residency required in the UK – most existing lenders ask for a minimum of one year
· No minimum time remaining on visa – borrowers are often required to have at least one year remaining on their visa
· No minimum income needed
· No UK credit history needed – through its partner, Nova Credit, Nottingham Building Society can access overseas credit files from 13 different countries
· Up to 90% Loan to Value (LTV) (capped at 75% LTV if a credit source cannot be found)
The product will primarily be available to borrowers entering the UK on a Skilled Worker or Health and Social Care Worker visa. It also comes at a time when brokers are seeing high demand from overseas borrowers.
Criteria searches on broker platforms also strongly suggest that there is growing appetite for mortgage solutions to serve this segment of the market; foreign residency-related broker search terms exceeded a quarter of all criteria searches for the first time in Q4 2023 while the figure stood at just one in six two years ago.
A significant proportion of employees in the healthcare and IT sectors are from abroad – nearly one in five[1]NHS staff are not British nationals – and well over 325,000 work visas were granted last year[2]. The Home Office[3] anticipates this number to hit over half a million by 2028 / 2029.
In 2023 alone, there were over three million entry clearance visas granted, which represented an increase in work and study visas granted in 2023 (36%) when compared to 2019 (19%).
Alison Pallett, Sales Director at Nottingham Building Society, said: “This is a fantastic solution, one we know brokers have been crying out for. We hope it will empower more borrowers from overseas to realise their home-buying dream in the UK, particularly those new to the UK who struggle to demonstrate their credit history. It’s an exciting step forward in our transformation journey as we continually look for innovative ways to support borrowers who currently find it difficult to obtain a mortgage.”
Praven Subbramoney, Chief Lending Officer at Nottingham Building Society, added: “It’s a proud moment for us to be able to introduce this exciting new product; one that will transform the homeownership prospects for the growing number of foreign nationals coming to live and work in the UK.
“Many thousands of people come to the UK to work and indeed, we rely on skilled foreign workers in critical areas like healthcare and technology. But up until now many have been unable to obtain a mortgage within the first two years of being in the country because of restrictive and inflexible lending criteria. We want to change that.
“As a foreign national, trying to get a mortgage proved far more complicated and frustrating than it should have been. It’s as if only 75% of me was allowed into the country – the UK was able to match my aspirations to earn a good living and play my part in supporting the economy, but I was unable to comfortably settle with my family.”
“The need to better support under-served segments of the market is central to our purpose as a forward-looking building society. And we are delighted to be able to now meet the evolving demands of people moving into the country, not just as a place to earn money but to settle long-term, put down family roots and make the UK their home. That’s the role we believe a modern mutual should fulfil.”
Using Nova Credit’s Credit Passport™ will allow mortgage applicants with limited or no UK credit history to permit access to their credit history from overseas. As Misha Esipov, CEO and Co-founder at Nova Credit, concluded: “When people move countries, we believe they should be able to bring their credit history with them. We are delighted to partner with Nottingham Building Society to enable UK newcomers who have the means and credit track record to put their best financial foot forward to access mortgage financing.
“With our Credit Passport® solution, Nottingham Building Society can take advantage of a compelling new expansion and tap into a valuable, under-served market that has been hiding in plain sight.”
Danny Belton, Head of Lending at Mortgage Advice Bureau, concluded: “There are a growing number of foreign nationals looking to come to the UK, bringing critical skills and years of experience to the workplace. However, obtaining a property to live in has been a significant challenge for many.
“It’s great to see that Nottingham Building Society has taken a pragmatic approach to the problem by providing a leading solution that can help these customers.”
