Working Abroad and Building in the UK

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The chance to work abroad is a wonderful opportunity, but what about your return to the UK? Perhaps you dream of building yourself a family home before you come back, especially if your family is living in the UK and your children are at school here? If you're considering a self-build project and not sure if funding is available, fear not. As with any self-build, there's no reason why your dream can't become reality as long as you meet the lending criteria.

Lending institutions will certainly consider providing finance to enable you to build your new home, while you work abroad. You will be asked to confirm your employment status and a time scale of when you will also live in the UK. Many banks and building societies will stipulate that your salary is paid into a UK bank account. In many instances this may be an offshore account. You will also be asked to confirm that once the property is built it will become the family residence. I must point out that the relevant lending institution will need confirmation of several specific points relating to the build including who will project manage the build when you are abroad and who will be main point of contact? Obviously your application and supporting documentation will have to comply with current lending policy ensuring affordable and responsible lending.

Funding is currently available for a percentage of the land purchase cost and a percentage of build costs. Loan to land value and loan to build costs will vary depending on each lending institution's lending criteria.

If you currently own a property that you rent out, and you wish to keep it, it shouldn't dent your chances of securing a self-build mortgage. A let to buy mortgage works by allowing you to borrow money to build (or buy) a new home to move into, while your existing property is let out to tenants. The new mortgage lender will calculate the maximum that they are prepared to lend you and not take your existing mortgage into consideration as a commitment as long as the rent covers the existing mortgage payment.

I suggest that the monthly rental income needs to cover a minimum of 130 per cent of your monthly mortgage payment. Some banks and building societies will assess the affordability by ensuring the monthly rental income covers the existing mortgage on a nominal rate of 8 per cent. Alternatively, other lending institutions annualise the monthly rental income, establishing affordability subject to 70 per cent of the monthly rental income being sufficient to cover your annual mortgage payments.