Proving income and affordability through overseas tax returns and payslips is the biggest challenge brokers face when arranging mortgages for expat clients, according to research from Suffolk Building Society.

Nearly two-thirds (62%) of brokers surveyed identified overseas income and affordability verification as their main challenge. Global political instability, uncertainty over lending criteria, and identity and anti-money laundering checks were each cited by 48%.

The research also found that many expats may not realise they need a specialist mortgage, with brokers estimating that only 34% are aware of the requirement.

Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said the definition of an expat was broader than many borrowers and brokers might assume, covering people working overseas for UK companies as well as those in sectors such as oil, shipping, aviation and diplomatic services.

Grimshaw said: “Given the complexities of an expat mortgage, and the fact that many prospective borrowers are unaware that they require one, Suffolk Building Society believes there is a clear case for the value of broker advice. Intermediaries have a vital role to play in helping clients understand their options, identifying the right mortgage for their circumstances and navigating the additional requirements involved.”

Finding a lender prepared to assess a customer's individual circumstances was the area where brokers believed they added the most value, cited by 88% of respondents. This included factors such as country of residence, tax status and the currency in which income is paid. A further 54% said they added value by explaining the different types of expat mortgages available, while 44% highlighted helping clients understand documentation requirements.

With around five million British expats living overseas and an estimated 250,000 leaving the UK in the past year, Suffolk believes there is a strong opportunity for brokers to develop their expertise in the specialist lending market.

Grimshaw said: “Expat lending is a great example of where broker advice makes a significant difference. While rate, LTV and income multiples may be the core considerations when dealing with a standard residential case, the value that brokers add to an expat case goes far beyond these. It’s not simply about navigating what can be a more complex application process and documentation requirements. It’s about identifying the right type of mortgage, anticipating potential obstacles and directing the case towards an appropriate lender from the outset.”

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