Feb. 11, 2013
-- The bank suddenly stopped accepting applications and refused all active applications while it conducted a review of its lending operations. Shortly afterwards, BM Solutions, also owned by Lloyds, issued a similar statement to broker partners. This week, a spokesman for the bank confirmed that residential mortgage lending to expatriates hoping to buy in the UK was unlikely to restart, with staff being redeployed.
Although no formal confirmation has been issued by the bank, telephone calls to the mortgage section are going unanswered, suggesting it has been closed down.
The demise of Lloyds is a bitter blow for overseas buyers everywhere, as it now means lenders such as Bank of Scotland International, C&G, BM Solutions and Lloyds themselves are no longer active in this important market. It is generally recognised that in the London market alone, overseas buyers account for a substantial share of all purchases. The Knight Frank International Residential investment in London Report, released this month, highlights overseas buyers who purchased central London new-build property with a value of £2.2 billion in 2012, up 22% from £1.8 billion in 2011.
According to Knight Frank, a total of 52 nationalities bought new-build property in central London last year. The most active overseas buyers (ranked by number of transactions)
of central London new homes are from Singapore (23%), Hong Kong (16%), China (5%), Malaysia (4%) and Russia (3%).
Commenting on the changes in the market, Tim Harvey, managing director of international mortgage broking specialists offshoreonline.org commented, “These two pieces of news are hard for anybody in the international mortgage borrowing community to reconcile. Whilst we continue to see a stream of good quality expatriate mortgage enquiries from UK and other nationalities around the world, the reaction of one of the largest lending groups in the market has been to withdraw, so significantly affecting choice. We are hopeful that new, more imaginative lenders will react to what is traditionally a very high quality lending market for banks.”