Q I’m a would-be first-time buyer looking to buy by myself, which I expect to be ready to do in about a year’s time. I’m currently renting in the UK but – as I work remotely – I am considering putting my things into storage and spending about a year as a digital nomad in a few different, less expensive countries. Hopefully, this would save me some money on what I’m currently paying in rent and bills. I would plan to be in Europe, so I’d be able to come back to the UK without too much difficulty for house-hunting purposes.
What’s holding me back is the question of how this would affect a mortgage application. Would it count against me if I didn’t have a permanent UK address at the time of application? I could give my parents’ address, but it obviously wouldn’t be where I was actually residing. Can you think of any other factors that might make it harder for me to buy a house if I took this option? Buying the house is my priority, so I would only go ahead with the digital nomad plan if it wasn’t going to jeopardise my chances. Any advice you can give would be very much appreciated.
JS
A Yes, it would count against you if you didn’t have a permanent UK address at the time of making a mortgage application. And for most lenders, so would not having at least two to three years of UK address history. However, “as long as you are residing in the UK at the time of application”, says Pete Mugleston of onlinemortgageadvisor.co.uk, “some lenders are able to accept foreign address history” and are typically more interested in seeing that you have been in continuous employment with the same employer for at least six months or more. So there’s no need to ditch your digital nomad plan, provided you don’t even think about applying for a mortgage until you have a permanent address back in the UK and at least six months’ continuous employment with the same employer. However, to be on the safe side, it might be an idea to have a chat about your plans with a mortgage adviser before you embark on your life as a digital nomad.
In terms of building up savings, working remotely elsewhere in Europe is a fine idea. According to a study by the online learning platform Laba, you can drastically cut your cost of living in European countries that offer digital nomad visas, which include Croatia, Estonia, Portugal, Spain, the Czech Republic, Latvia and Italy. It reckons you can halve your costs in Croatia, where the typical cost of living is £725 a month compared with £1,461 in the UK. You will save less in the other countries mentioned, but you’ll still be better off by £472 a month in the most expensive, which is Italy.
