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Case Study 3 – Foreign National Tier 2 Visa - The merits of using a Mortgage Adviser

Client/Proposal

A Foreign National residing and working in the UK under a Tier 2 Visa. Single with no financial dependants. Our client wanted to convert their existing residential into a Let to Buy, raise capital and conduct a forward purchase on a residential basis.

A couple of initial problems were that the property up for conversion to a Let to Buy was an ex-council house which not all lenders are willing to entertain. The second problem was that the client only had circa 2yrs left to run on their Visa and most lenders require the status to be indefinite leave to remain or at least 2.5-3yrs left to run.

Outcome

Obtaining the right combination of criteria proved really difficult and eventually involved two separate lenders due to the fact that both problems needed to be individually solved. The forward purchase was placed with a lender who accepted the issue with the time left on the Visa and the Let to Buy with another lender who accepted ex-council properties and seemingly did not have any issues with the time left on the Visa. However, the Let to Buy was declined in underwriting due to the fact that their interpretation of the clients Visa status was that they were in breach of the Tier 2 Visa as they viewed it as trading in a business and so the terms of sponsored employment was in some way impaired. This became a matter of interpretation and there was no clear-cut solution.

CDMB challenged the lender’s interpretation and eventually managed to overturn it but had to go to extraordinary lengths to do so.

The premise of a general Tier 2 Visa is as follows: -

The Tier 2 General Work visa is a UK work visa, part of the British Points Based System. It is issued to highly skilled workers from outside the European Economic Area and Switzerland, who have a job offer for a skilled job or a job in the Shortage List.

To be eligible to apply for this visa you must have a job offer by a licensed sponsor in the UK. You should provide a certificate of sponsorship issued by the employer as a proof.

As a holder of Tier 2 General Work Visa, you will be permitted to travel outside the UK while on this visa. You can also bring dependants to the UK on a Tier 2 Dependent Visa.

CDMB were able to prove, via the Home Office, that a Let to Buy, Buy to Let is not a breach of Tier 2 conditions because the client has maintained their sponsored employment and so has not left the post. As the application is in their personal name, it is therefore regarded as income from investment and so does not constitute trading in a separate business. Furthermore, we encouraged the client to seek legal opinion under ILA (Independent Legal Advice), having obtained the view from the Home Office, so as to strengthen his appeal against the decision.

As a consequence, the lender reinstated their offer and the client completed on both the Let to Buy and the forward purchase.

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