Many Brits looking to move to Australia are finding it harder to enter the property market due to their UK credit ratings not being recognised in Australia. This issue is creating significant barriers for potential homebuyers and renters, according to a new survey from CreditCardCompare.com.au.
Gareth Boyd, Head of Growth at CreditCardCompare.com.au, explains: “Our survey has shown that a growing number of Brits are struggling to secure mortgages or rental properties in Australia because their UK credit histories do not migrate with them. This lack of portability between the two countries’ credit systems is leaving many potential buyers and tenants at a disadvantage.”
The main issue, as highlighted by the survey, is the absence of a seamless system that allows credit ratings to be transferred between countries.
“While countries like the US and Canada have some mechanisms in place to recognise international credit ratings, Australia doesn’t currently have a system that automatically considers a UK credit score,” said Mr Boyd.
Of the respondents, 67% indicated that they were unable to secure a mortgage in Australia due to the issue of credit rating migration.
“This is a significant barrier for Brits, especially given the high costs of entering the property market in Australia. If someone’s UK credit score is good, they should not have to start from scratch when applying for a mortgage or rental contract,” Mr Boyd added.
Olivia Harper, a 32-year-old financial consultant from London, who recently moved to Melbourne with her husband, shares her experience.
“We’ve been living in Melbourne for six months now, and it feels like we’re starting from scratch when it comes to finances. My husband and I have both had great credit scores in the UK, but when we tried to secure a mortgage here, we were told our UK credit scores wouldn’t be recognised,” says Olivia.
“It felt like we were 18 again and building our credit from the ground up. We ended up renting for longer than planned because we couldn’t secure a loan right away.”
‘56% of survey respondents reporting difficulties in renting homes’
The issue is also affecting the rental market, with 56% of survey respondents reporting difficulties in renting homes due to their UK credit history.
“Many landlords and property managers rely on credit checks when deciding on tenants, and without a recognised credit score from the UK, they are often reluctant to offer leases,” explained Mr Boyd.
For many Brits, this leads to either delays in securing a property or the need to provide larger upfront deposits, adding an extra layer of financial pressure.
“These barriers are discouraging many people from making the move to Australia, despite their desire to live and work in the country,” Mr Boyd said.
James Elliott, a 28-year-old software developer from Birmingham, faced similar challenges when he moved to Sydney.
“The rental market here has been much harder than I anticipated. We found a lovely flat in Sydney but were told that the landlord wouldn’t approve our application without a local credit history,” James explained.
“We tried explaining that we had solid references from the UK and could provide evidence of our financial reliability, but it didn’t seem to matter. Thankfully, we have family friends in Sydney who were able to vouch for us to this landlord, which helped us secure the property. It’s frustrating because, in the UK, our credit history is spotless, but here, it feels like we’re starting over.”
Are there any solutions to this problem?
According to CreditCardCompare.com.au, a potential solution could be the introduction of a system that links credit histories across countries.
“If Australia could introduce a system that recognises international credit histories. The ability to access finance based on a pre-existing, reliable credit score would reduce many of the hurdles faced by expatriates,” Mr Boyd suggested.
The survey also indicated that 12% of Brits would be more inclined to move to Australia if there were easier ways to have their credit history recognised.
This number appears to be low due to so many Brits don’t even know that their credit rating stays in the UK.
“A system like this would not only support individuals in securing loans and rentals more easily but would also help stimulate Australia’s property market by attracting more foreign nationals,” Mr Boyd added.
Survey findings and methodology
Results: The survey focused on the challenges faced by UK expats with regards to credit history and its effect on securing home loans or rental properties in Australia.
Sample size: 5,500 UK expats that relocated to Australia within the last 12 months.
Survey period: Conducted from January to October 2024.