Weaker pound encourages expats

New research reveals that expats and foreign nationals are snapping up UK property, while the pound is weak and prices remain very affordable outside London and the South East.

The new figures show that there has been a 20% year on year increase in expats and foreign nationals investing in UK property. These buyers are investing in both buy-to-lets and first, or second homes.

The research also reveals that in 2020, 60% of expats and foreign nationals buying property in the UK, opted for the Manchester area, while 25% choose Birmingham.  However, London has seen a 60% drop in buyers, this is the result of high property prices and poor rental yields, compared with other regions of the UK.

What may surprise many is that in real terms, property prices in the UK have fallen compared with a decade ago and there is a huge North-South divide. In London, the average property value has risen by nearly 70% in 10 years, whereas some other areas have fallen as much as 40%.

This growth in investors is partly down to the availability of a wider selection of mortgages designed for working expats and foreign nationals. Investors are also attracted by the UK’s robust legal system for property acquisition, which makes it one of the easiest places in the world to buy property.

Can we help?

If you would like to know more about the range of mortgages available to expats, both new and re-mortgage please do make contact. We have a fully experienced and qualified team waiting to assist you.

Expat surge in re-mortgaging shows signs of Instability

Re-mortgaging has reached record levels and now accounts for 41.5% of all expat mortgages conducted according to recent research.

The proportion of expat re-mortgages has risen by nearly 13% over the last 12 months, as homeowners are increasingly switching mortgage companies to find more attractive rates.

The promise of increased interest rates has no doubt helped drive demand for re-mortgaging. More and more expats are re-mortgaging to save money but also raise capital which is locked in their properties.

Many expat homeowners and landlords who have been saddled with lenders on less than competitive interest rates or stuck on higher standard variable rates are switching to more attractive fixed term deals. Rising property prices has also had an impact on re-mortgage growth, especially in the Southeast of the UK.

It is expected the demand for re-mortgaging will continue to rise in 2022, especially if there are rate rises. There is likely to be a shift towards more consumers considering fixed rate deals as the risk of rate rises remain for the time being. Expat buy-to-let re-mortgaging has also risen and now represents 12.8% of all mortgages, up by 6% year on year.

As a general overview, if you are an expat and not locked into a penalty mortgage deal good advice would be to review it with a view to saving money.

Can we assist?

If you would like a new or re-mortgage, please do make contact and one of our fully trained independent advisers will be happy to help.

 

 

Expats please take note

Any Expats due to re-mortgage are being urged to take advantage of current low rates as soon as possible because the forecasts suggest mortgage rates will begin rising as soon as next year.

The figures from the Office for Budget Responsibility (OBR) were discovered in documents, released last week, providing more detail on the Budget which was delivered by Chancellor Rishi Sunak.

The public body, which provides independent forecasts on finance and the economy, said it expected mortgage interest costs to begin rising next year before hitting a 13% increase in 2023.

The figures showed Expat UK homeowners needed to be braced for a big leap in mortgage costs to 14% in the first three months of 2023. This would then climb to 14.8% in the second quarter, before dropping to 10.5% by the end of the year.

Why?

The reason for the rise is down to the Bank of England base rate, which is looking set to start climbing from its 0.1% low very soon.

Expat UK homeowners need to be aware that it’s a case of if, not when, for an interest rate rise now and the clock is ticking on the record low mortgage rates we’ve all become accustomed to.

Expats on a fixed-rate deal now could face much higher rates when they come to re-mortgage in the coming years.

Any Expat who signed up to a two-year fixed rate deal earlier this year, nabbing a record low rate, will face a stark rise when they come to re-mortgage in the first half of 2023.

In a consistently increasing rates environment, the longer you fix the longer you can lock in today’s low rates. However, homeowners need to be careful when thinking about any long-term fixes.