UK Lenders stop lending to expats in the EU due to Brexit

This could seriously affect the finances of ex-pats living in the EU.

Some mortgage lenders refuse to grant loans to British expatriates living in the EU after the UK leaves the European Union.

Lenders adopting this policy include the Newbury and Marsden construction companies. However, both indicated that these restrictions might only be temporary, depending on ongoing negotiations on the UK and the EU’s financial services.

“We hope this is only temporary.”

The Newbury Building Society spokeswoman said: “The policy change regarding the government-brokered Brexit deal excludes financial services.”

“This means that without passport rights, Newbury Building Society cannot market any savings or mortgage products in the EU.”

“There is hope that this is only temporary and that a deal for financial services will be completed by the end of March.”

The passport allows a company registered in the European Economic Area (EEA) to do business in any other EEA state without the need for additional authorization from each country. Still, the UK has already left the EEA.

There have already been UK bank closures for EU residents who have accounts with companies such as HSBC, RBS / NatWest, Lloyds TSB, Halifax, Bank of Scotland, Barclays, and Santander.

Expats, whether they are looking for a residential or buy-to-let mortgage, generally need to make payments using a UK bank account.

Marsden Building Society has also restricted lending to people residing in the EU, along with those in Iceland, Liechtenstein, and Norway, all countries in the European Economic Area.

The society said it was monitoring the steps that the UK government is taking and its intention to establish agreements based on the equivalence system, whereby UK banks and other financial institutions can trade, on a regulatory basis, as if they were still in the United States.

“We are positive with the idea that an agreement will be reached.”

Donna Barclay, Senior Lending Director at Marsden Building Society, said: “We look forward to a deal for the financial services sector that will allow us to continue to secure new loans for British expatriates residing in EU / EEA countries.”

“We look forward to further news on a deal and how this will affect us in the future and keep our clients and brokers informed of any changes.”

There are 1.3 million people born in the United Kingdom living in EU countries, according to 2019 UN data. Spain has the highest number (302,000), followed by Ireland (293,000), France (177,000), Germany (99,000) and Italy (66,000).

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