Hongkongers have emerged as among the most aggressive buyers of UK property, snapping up more than £305.6 million (US$430 million) of prime London homes in 2020. This trend is expected to continue under a new wave of emigration, as BN(O) passport holders are allowed to live in the UK under the new visa scheme.

While such a buying frenzy can be partly attributed to impulsiveness since very little down payment is required to be a UK landlord, the aftermath – in the form of a mortgage – can be a daunting task. Applying for a mortgage can feel overwhelming and intimidating to many borrowers. In addition, the approval process for UK mortgage can be vastly different from, and more stringent than, that of a Hong Kong bank.

Homebuyers could be disappointed when they are drawn to the refurbished kitchens and spaciously planted gardens of their dream home and hastily sign the exchange contract, only to discover that the mortgage denial turns dream house into nightmare, for reasons that can range from income profile to title deeds issue.

Many clients ask me if there is a way to get a mortgage pre-approval for a firm indication of borrowing power before house-hunting in the UK?

The answer, fortunately, is a resounding yes. Some UK banks offer mortgage pre-approval before purchasing a property. Borrowers indicate the amount of loan needed and provide proof of income, as is the normal application procedure. Upon approval by the bank, a certificate of Agreement In Principle (AIP), which states the maximum amount of loan the bank is willing to lend, will be issued.

The AIP certificate usually carries a validity of up to three months. Hongkongers can then purchase their homes in the UK within the time frame.

If they move onto the formal application via the AIP bank, they may not have to go through the time-consuming approval process again. This is highly desirable if speed is paramount after making a deal.
On the other hand, if one gets rejected at the AIP stage, the buyer could try to resolve the credit issue before flocking into the UK property market too soon.

However, an AIP does not guarantee an official mortgage offer. It can be perceived as a “memorandum of understanding” (MoU) which outlines that the bank is willing to approve the mortgage based on information provided. Other reasons may still affect the outcome when it comes to formal application, such as issues related to the title deeds of the house, valuation etc.

Even though the loan offer might not be highly desired, you are empowered to put in an offer on your dream house based on your affordability, knowing you do have the funds in place.

From a transaction standpoint, an AIP certainly gives both the seller and the buyer added reassurance around borrowing prospects, as it helps sellers whittle out “time wasters”. Many UK landlords are reluctant to sell their house to foreigners, since there is no initial deposit required by law and buyers can simply walk away from deals any time before completion.

While banks differ regarding their stringency in granting AIP, medium-sized and smaller banks tend to be more lenient in the approval. Some even provide “instant AIP approval” with very few documents required. Indeed, easy approval comes at the cost of a higher interest rate as the lack of information prompts banks to assume the borrower’s financial condition might not be straightforward. However, an AIP is not legally binding but serves as a contingency plan. After purchasing the house, you can still consult other banks for the best bargain.

Bear in mind that the maximum loan-to-value (LTV) ratio caps at 75 per cent according to government regulation. An AIP, for instance, approves a loan of £300,000, and at the same time, the flat price is also £300,000. During formal application, the maximum you could borrow would be £225,000, which is 75 per cent of the purchase price. Furthermore, the “Help to Buy” scheme enables first-time buyers to borrow up to 95 per cent of the house price for those work in the UK and on a UK-based payroll. However, getting a job in the UK is not easy these days.

Raymond Chong

如對本文章有任何問題或意見,歡迎按左上角 Whatsapp 按鈕聯絡我們互相交流。

返回主頁 按揭學堂


若想知哪間銀行按揭利率最平,現金回贈最高,即時留言,索取最新情報!


關於星之谷

星之谷按揭轉介歷年來與全港銀行合作,為客戶免費介紹最低利率、最高回贈的按揭計劃,解決置業路上的疑難及痛點。我們不收取任何費用,只想把所識和所想,向客人分享。公司的獎項和里程碑:

  • 轉介超過40000按揭個案
  • 環聯(TU) 正式合作伙伴
  • Capital 資本雜誌 「傑出物業按揭轉介」大獎, 2021
  • 香港中小型企業總商會「最佳中小企獎」, 2019
  • TVB 「樓宇按揭轉介」傑出服務獎, 2018
  • 都市日報「傑出按揭轉介」大獎, 2018
  • 出版「按揭達人」一書,各大書局有售
  • TVB樓宇節目:「星之谷特約:蝸居宅急變」於2018年4月放送,收視率19點
  • NowTV 樓宇節目:「星之谷特約:置業攻略」於2018年6月放送
  • 建立北斗星按揭網,全港唯一按揭專題資訊和財技網站

詳情請瀏覽星之谷按揭轉介網頁:https://starpagency.com


按揭入門

按揭成數 | 按揭回贈比較 | 按揭利率比較 | 按揭年期

按揭保險 | 按揭保費折扣 |HKMC和QBE批核標準

壓力測試 | 供款與入息比率DTI | 壓力測試花紅

轉按 | 甩名 / 轉名 | 現契重按

擔保人印花稅 / SSD / BSD |

自僱按揭 | 自住變出租按揭

居屋按揭 | 居屋轉按套失政府擔保

唐樓按揭 | 村屋按揭 | 工廈按揭

即供 vs 建築期 | Mortgage Link  | 凶宅按揭