The number of expats in Australia looking to invest in UK buy-to-let property has soared by 29 per cent over the last 12 months, despite tougher lending criteria.

European rules, introduced in 2016, demand that individuals paid in a foreign currency must be closely scrutinised when their applications are assessed by mortgage underwriters.

Options for mortgages on UK properties are rather limited for expats down under, partly because of Australian banking regulations and treaty arrangements with the UK, which technically preclude lending to each other’s residents.

Despite this, there are over 1.1 million Brits living in Australia and many wish to buy property back in the UK, either as an investment, or to live in upon their return.

Matthew Fleming-Duffy, managing director of Cherry Mortgage and Finance which analysed the data, said: “It would be good to see this change and following the joint press conference held by Theresa May and Australia's Prime Minister Malcolm Turnbull last year. This may indeed become a focus of renewed co-operation between our countries, as Australia is a key destination for many British expats.

“We receive a large volume of enquiries from expats in Australia and have a handful of lenders that will arrange buy-to-let loans for them.

“Typically, UK expats are looking to invest in buy-to-let property whilst living in Australia, perhaps as a way to provide an income in retirement, or even to live in upon their return.

“On the whole, we receive enquiries from people in all walks of life including white collar workers (e.g. lawyers, bankers, IT professionals, etc), teachers, engineers and those employed in the medical profession.

“It has got a lot harder to get a mortgage in the UK if you don't live there - even if you're a British expatriate. We saw a few lenders withdraw from expat lending last year, as a direct result of the EU Mortgage Credit Directive.

“If you are looking to purchase an investment property and have a 30 per cent deposit, earn over £45,000 sterling equivalent, work for a multi-national corporate, have an existing UK mortgage and are looking to purchase ‘vanilla’ properties, then you are in luck as you will have options.

“If your income is lower, or if you are self-employed, or if you are looking to purchase more unusual properties, then you may find that the product options being offered to you are expensive and your potential purchase becomes unfeasible, or indeed that you cannot even borrow.

“We have identified over a dozen lenders who are willing to provide buy-to-let mortgages to expats in Australia. Many mortgage lenders will only consider applications from them if they can meet certain specific criteria. Brokers are best placed to understand the nuances of criteria, and can be talking to the relevant lenders straight off the bat.”

“Whilst some lenders historically have had a requirement for potential mortgagors to leave Australia to sign documentation (we have also experienced a case where the lender insisted on the client visiting the UK and signing documents here, in front of their solicitor), we have found that more lenders have been developing a flexible approach to expats that live in Australia.”