Analysis

November 28, 2024

The tech helping people buy property abroad

Buying a property abroad can be complicated, but fintechs like Upscore are streamlining the process.


Sarah Drumm

4 min read

In partnership with

Upscore

While fintechs have long focused on the digital nomad class — offering everything from multi-currency accounts to insurance products that cater to frequent fliers — it’s not so easy to actually set roots abroad.  

And with almost half of UK IT sector workers considering moving abroad in the next five years, according to a new study by Currencies Direct, more people may be in for a shock.  

A small number of fintechs have set their sights on this problem. In October, US open banking startup Nova Credit struck a deal with HSBC UK to help it facilitate international mortgage applications. Its tech helps the bank access a customer’s past financial data from their previous countries of residence. Redpin is another UK company which focuses on connecting buyers with service providers like estate agents and lawyers.

Advertisement

Upscore, a UK-based fintech startup that recently secured a £1m seed round, however, has a different strategy. Its platform sets users up with a “Finance Passport™”, where prospective property buyers upload their financial data to find out which mortgages they qualify for in different countries around the world. The startup is regulated by the Financial Conduct Authority (FCA) and the Bank of Spain as a credit broker, connecting buyers with banks, and earns a commission from the latter if a loan is taken out.

“Our ultimate vision is to contribute to a more globalised mortgage and financial system, where individuals can seamlessly control and ‘passport’ their financial data across borders with minimal friction,” says Marcelo Barreneche, Upscore’s cofounder, adding the idea for the service came about when he faced challenges using his financial profile abroad. Having lived in London, Barreneche now lives in Barcelona. 

What makes buying a property abroad tricky?

Nicholas Mendes, a mortgage industry expert and the head of marketing at UK mortgage broker John Charcol, says that buyer profiles in the property market have been diversifying over the years, as more people pursue self-employment or move abroad for work.

This makes it tricky when it comes to purchasing a property — banks generally prefer to lend to candidates who are in full-time employment, or who can provide several years of accounts showing uninterrupted earnings. 

It’s possible for sophisticated buyers to negotiate directly with banks — but the process is complex.

Buying property abroad introduces further complexities. Buyers will need to pay to translate and notarise documents, while application forms designed for residents (and asking for local ID or tax documents) can be extremely time-consuming to navigate. Other risks, such as fluctuating exchange rates, are also present.

Upscore’s plan is to become a one-stop shop for people looking to move or make investments in properties abroad.

The startup negotiates directly with banks to make it possible for non-resident borrowers to apply, using its purchasing power to make international lending more attractive to local banks. It also makes sure the documents required are streamlined across all the countries users can secure a mortgage in.  

“It’s possible for sophisticated buyers to negotiate directly with banks — but the process is complex,” says Tom Colvin, Upscore’s cofounder, adding that Upscore allows non-resident buyers “access to services and terms that may otherwise be difficult or impossible to secure without extensive local knowledge or assistance.”

Upscore’s platform helps buyers access mortgages in nine countries including Spain, Italy, Portugal, the UK, the US and Australia. The Finance Passport™ gathers financial data such as income, credit history and debt obligations, but Upscore will only access information shared by users. 

“There are more and more people now who are not restricted by a location of work,” says Mendez. “So these sorts of solutions will certainly become more relevant as time goes on.”

Advertisement

A ripe opportunity 

Today, Upscore says it is facilitating around €2m-worth of mortgages per month, up from around €500k at the beginning of this year. The founders say that 40% of its users are buying properties as investment, while 30% are looking for a second home and 30% are acquiring a permanent residence. 

The ability to use AI to translate documents will be more useful, and likewise the ability to use technology to source a property for you as well.

According to a survey from UHY Hacker Young, property investments are growing in popularity, with the number of Gen Z landlords in the UK having risen by 20% since 2018, up from 582,000 to 696,000.

Still, few fintechs are currently targeting this market, making it ripe for opportunities, says Mendes.

“There’s so much technology could do — when we look at it from the client’s point of view, the ability to use AI to translate documents will be more useful, and likewise the ability to use technology to source a property for you as well,” he says. “Rather than going to an estate agent first, it’s going to be the other way around.”

Upscore says it has tailored its tool for any buyers — particularly digital nomads, remote workers, and entrepreneurs — and its upcoming features will include “on-demand” services around the property transaction, such as FX, insurance, decoration and home renovations.