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Isles of Scilly Mortgages

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: November 11, 2021

There are many reasons to buy a property on the Isles of Scilly, from its picturesque beaches to the low crime rate, but how difficult is it to get a mortgage there, how do you go about it, and what kind of help is available to anyone who’s hoping to purchase a home there?

In our complete guide to Scilly Isles mortgages, we answer all of these questions and several others.

Can you get a mortgage to buy a house on the Isles of Scilly?

Yes, as long as you find the right mortgage lender. Most banks and building societies are unable to offer mortgages on the Scilly Islands, but at the time of writing (July 2021) there are around 10 mortgage providers who can lend in this offshore location.

Only a few of these mortgage providers are high street names, with the rest falling into the ‘specialist lender’ category. Given the overall lack of approachable lenders for Scilly Isles mortgages and the fact that many of them aren’t mainstream, finding a mortgage broker who specialises in the archipelago is recommended to boost your chances of approval.

A mortgage broker with the right knowledge and experience will know exactly which lenders offer mortgages on the islands. They will have a deep working relationship with each of them and can negotiate the best interest rates and deals on your behalf.

Eligibility criteria

The mortgage lenders who offer finance for buying property on the Isles of Scilly use the same eligibility criteria as they would for mortgages on the UK mainland. There are no extra requirements specific to the Scilly Islands and non-residents are welcome to apply.

The only geographical caveat a mortgage lender might apply is an extra fee for the property valuation. This is because their valuer is likely to have additional travel expenses to cover the cost of their journey from the UK mainland to the site of the property in Scilly.

You can read about the general eligibility criteria for a mortgage in the UK, including how your creditworthiness will be assessed, in our complete guide to mortgage applications.

We also recommend reading through our guide on mortgage deposits and mortgage affordability to familiarise yourself with these requirements before you apply.

How to get a mortgage on the Isles of Scilly

If you’ve already found a property you want to buy, the mortgage process you need to go through is exactly the same as it would be for a home on the UK mainland. If you haven’t found a specific property, there are estate agents on the archipelago that list available homes on their websites. They include Sibleys Island Homes and Island Properties.

Once you’re ready to apply for a mortgage, follow these steps to get started…

  • Prepare your documents: The paperwork you’ll need includes proof of income, proof of address and evidence of your deposit funds. For a complete list of the documents you’ll need to have to hand, see our complete guide to mortgage applications.
  • Download your credit reports: It’s a good idea to download your credit reports before moving forward. This will allow you to challenge inaccuracies, have any outdated information removed, and pinpoint issues that may affect your application.
  • Speak to a mortgage broker: It is highly recommended that you find a mortgage broker who specialises in customers who are buying on the Isles of Scilly. Having a mortgage advisor who knows the local market and has deep working relationships with the lenders who offer finance there could be the difference between rejection and approval, and they could even save your time and money in the long run.

Make an enquiry and we’ll match you with a mortgage advisor who has in-depth knowledge and experience of the Scilly Isles market so you can get started.

Obstacles you might encounter

The mortgage process for a property on the Isles of Scilly is relatively straightforward, in the sense that it’s no different to anywhere else in the UK. The main obstacle you might encounter is finding a property for sale that fits your requirements because…

  • The isles are remote and homes for sale are in short supply, even on the largest island of St Marys, which accounts for 1,723 of Scilly’s 2,203 population
  • The Duchy of Cornwall owns roughly a quarter of the Isles’ housing stock and these homes often come with short leases and high ground rent, which can put lenders off
  • The Dorrien-Smiths run the second largest of the isles, Tresco, and their estate does not sell its properties, offering only rentals and timeshare agreements

Non-standard construction properties

Another stumbling block from a mortgage perspective is the quality of homes for sale on the archipelago. While the Scilly Isles boast some impressive architecture, there are many ‘non-standard’ homes there, including stone cottages and 1970s bungalows.

Not all mortgage lenders will consider approving finance for non-standard construction properties as they prefer less risky brick-and-mortar homes, but the good news is that there are lenders and brokers all over the UK who specialise in unusual property types.

You can read more about this in our guide to non-standard construction mortgages.

Getting a buy-to-let mortgage

Buy-to-let mortgages, including holiday let purchases, are popular on the Isles of Scilly and are often a viable investment. Rental yields on the archipelago are favourable, with a survey by HSBC pegging them at 4.35%, which puts the islands in the top 10 UK seaside locations.

There are slightly fewer lenders who are willing to offer buy-to-let mortgages on the Scilly Isles compared to the number available for standard residential mortgages, but the process of applying for one is no more complicated than it would be on the UK mainland.

Indeed, the only extra requirement you might come across is having to pay extra valuation fees to cover the cost of the lender’s valuer making the journey to the Isles of Scilly.

Eligibility criteria, deposit requirements and the application process for buy-to-let mortgages on the archipelago are no different to the rest of the UK. You can read more about each of these topics in our complete guide to buy-to-let mortgages.

One thing to keep in mind, though, is that it can be more difficult to get a buy-to-let mortgage on Scilly, purely because there are only a handful of lenders to choose from. This is why using a mortgage broker is recommended, as this can boost your chances of approval.

Get matched with a Scilly Isles mortgage broker today

Getting a mortgage on the Isles of Scilly can be challenging as the number of approachable lenders is far fewer than it would be on the UK mainland. This can make it difficult to find a deal that fits your needs, but there’s a simple way to tip the odds in your favour.

Speaking to a mortgage broker who specialises in arranging finance on the Isles of Scilly can help you ensure that you find the ideal lender, first time. The right advisor will know exactly which lenders operate on the archipelago and can negotiate the best rates with them.

Our free broker-matching service can help you find a mortgage advisor with this knowledge and expertise. Call 0808 189 2301 or make an enquiry so we can set up a free, no-obligation chat between you and a mortgage broker who specialises in the Scilly Isles today.

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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