Expat landlord incorporations hitting new heights

The number of UK and international landlords choosing to register as a limited company to manage their portfolios is on the rise.

A spike in international investors enquiring about forming a limited company, up 62% year-on-year.

 Last year, there were a total of 41,700 buy-to-let incorporations, an increase of 23% on 2019. The numbers have more than doubled since 2016, rising 128%, when tax changes for landlords were introduced.

Between the beginning of 2016 and the end of 2020 more companies were set up to hold buy-to-let properties than in the preceding 50 years combined. Companies set up to hold buy-to-let properties were the second most common company founded during 2020, with companies selling goods online or by mail order in first place.

More than a third (34%) of all companies set up to hold buy-to-let properties in 2020 were in London. Together, London and the South East accounted for almost half (47%) of all incorporations.

Advantages

If landlords hold property in a limited company, they have the ability to offset 100% of mortgage interest against profits, while those holding a property in their own name can offset just 20%. Investing in property through a company provides landlords with higher levels of tax relief and personal tax savings. Landlords can grow their BTL portfolio more quickly, as there is no income tax on the retained profit, thus allowing more cash to re-invest.

Although corporation tax is payable on trading profits, this is lower than the higher income tax rate. However, running a portfolio through a limited company is not right for everyone.

One of the main benefits of remaining a private landlord is that any post-tax profits can go straight into their pocket. Profits can be used then for anything they choose – all paid for by the tenants.

 

Expats lending expanding rapidly

February 2021 gross mortgage lending to expats has increased by 6.8% from the month before, this is the fourth month on the run. In addition to the month-on-month increases lending this year has increased 18.2% overall.

Experts believe these strong figures are down to Brexit. There is definitely less confidence in the property values of other European countries. Property continues to gain value in the UK at a steady rate and looks like continuing for the foreseeable future unlike the rest of Europe.

Covid-19 has had an effect on the market, but the majority of experts believe this will be very short lived.

One other factor that has contributed to this robust growth is the number of re-mortgages completed. Both expats and UK residents are living in the fear that interest rates are about to jump. These fears are justified as already a good many long-term fixed rate deals have been withdrawn from the market but there are still some extremely attractive deals on offer.

UK property offers really good long-term stability.

The UK property market without doubt still offers value for money if you own a property or can afford to buy one. Anybody who has owned a property in a good area of the UK over the last 10 years would have seen their investment grow substantially.

It is expected that house price increases will level out as the year goes on with a steady and reliable growth rate, again spelling good news all round.

To sum up – traditionally the UK property market has always offered excellent value long term investment potential and there is no reason to believe this will not continue.

Mortgage advice?

If you need assistance with a new or re-mortgage, then please contact our expert independent advisers who are waiting to help.

Expats are defiantly re-thinking their mortgage plans.

There was a surge in re-mortgage activity in February and March of this year, as expat borrowers look to lock into cheap deals ahead of an expected interest rate rise.

Since the financial crisis in 2008 mortgage rates have steadily fallen.

However, with the Bank of England hinting that it could raise interest rates in the near future and economists are predicting a hike could come as soon as July/August of this year.

Record low mortgage rates continue to sustain market activity, many of the Bank of England’s Monetary Policy Committee are now adding to the calls for an interest rate rise, this picture could very quickly change.

A “wait and see” approach is best avoided for existing expat UK homeowners considering re-mortgaging.

The number of expat mortgages approved also went up this year, suggesting the market is picking up steam now the Brexit outcome has been resolved.

Expats who avoid reviewing their current mortgage deal could well pay for this error in the long term as interest rates look to be going upwards. Not everybody will benefit from changing their mortgage, but it certainly makes sense to check how your existing deal stands up to the future.

Contact us.

If you would like to review your current mortgage please make contact and one of our independent advisers will be happy to help.

 

Europe’s uncertainty boosts expats buying in the UK.

The UK property market continues to grow at a rapid rate and offers better longer-term security. Expats are very keen to get a foothold in the UK property market and we have received a lot more enquiries of late.

We have also seen an increase of existing property owners adding to their portfolios, indicating client concern for the future.

With expat mortgages being offered at such advantageous rates it seems like the right time to be considering the future. There are some exceptionally good fixed and tracker deals on offer to the expat with fees being reduced and lenders competing for business.

Mortgage providers are making it easier for expats to enter the UK market which is good news so please contact us for details of what is available.

What you will need to apply

Contact details.

Deposit available

Mortgage required.

Certified proof of address

Certified ID (Passport)

Bank statements (Normally 3 months)

Wage slips (Normally 3 months)

These requirements vary from lender to lender and the above is just to give you a guide to help speed up the process. Contact us for any assistance you may require. 

Like to know more?

Please do not hesitate to call one of our independent advisers who are on hand to assist. We pride ourselves on attention to detail and speed of service, we look forward to hearing from you.

 

Expats want property in the UK more than before Brexit!

Since the end of last year, the expat mortgage market has seen much more activity in both new and re-mortgage applications.

The UK property market continues on an upward spiral albeit slower than years gone by and still offers potential longer-term growth and security. Expats are always keen to secure property in the UK and this year is no exception as applications for new mortgages are at an all-time high.

Most experts believe these high activity levels will remain for the foreseeable future, with all the uncertainty expats want a UK foothold.

Confidence in the UK market has grown again since the turn of the year due to interest rates still being held after the threat of increases.

What does the future hold in store for expats?

This is a difficult market to predict in the long term, but if the past is anything to go by then UK property will hold its own and increase in value. Whatever happens with the pandemic property values are more than likely to remain strong. Several factors control prices, the main ones are listed below:

  • Supply and demand currently supply only meets 47% of the demand.
  • Mortgage interest rates are low and affordable.
  • UK economic growth is currently strong, and the outlook is stable.

So looking at the key factors the housing market looks in good shape for the future. Of course, situations can change very quickly, not to mention Covid-19, but on the whole, the UK property market looks to be in a very healthy state especially if the supply does not increase.

Mortgage help?

Should you require any assistance with your new or re-mortgage please call one of our fully qualified independent consultants and we will be happy to assist.

Expat mortgage applications hit a new high

Expat successful mortgage applications are up from 2020, a new report has highlighted.

It also seems that expat first-time buyers are the ones with the most activity. Over two-thirds of mortgage applications by expat first-time buyers were successful in the last four months of 2020.

The average number of expat enquiries has also risen dramatically this financial year as expats looking to get a foothold on the UK property ladder.

Even with all the uncertainty around the world, the UK property market is still seen as one of the most lucrative. The majority of working expats living abroad always want to retain and add to their UK property portfolio as markets in other European countries simply do not return the same profits.

Rising levels of mortgage enquiries, applications, and completions show that a significant number of expat first-time buyers are still both willing and able to get a foot on the UK property ladder.

UK property values remain stable which is a testimony to the long-term potential growth this market offers. Even with all the uncertainty in Europe and the UK, the market remains resilient and profitable, which is why expats see this area as good financial security.

Mortgages are not as easy to obtain as in the past but there are still good options open to the new investor and people wanting to re-mortgage.

Can we help?

If you are looking to invest in the UK, please contact us, and one of our independent qualified advisers will be happy to assist.