The UK buy-to-let market “may have turned an important corner” with major lenders launching lower rates for expat mortgages at less than 1% over the Bank of England base rate.
This coincides with property portals, Zoopla and Rightmove, saying that the supply of houses put on the market rose by 5.9% in January with asking prices lifting by 0.9% in the same period.
The bank base rate is currently 3.5% after a series of rises last year as the central bank bids to combat inflation at 10.5%. The Bank’s interest rate was 0.1% in November 2021.
Previously, Rightmove had noted UK house prices had fallen over the latter part of last year, following former Chancellor Kwasi Kwarteng’s tax-cutting September minibudget, which accelerated already rising mortgage rates. Action taken by current Chancellor Jeremy Hunt in October and in the November Autumn Statement calmed markets, although home loans remain elevated.
We are now seeing at least one lender offering UK mortgages for expats at a margin of less than 1% over the UK base rate. It is another signal that markets are returning to a new normal, with the UK base rate now expected to remain at a much higher level than was the case since the financial crash of 2008/2009.
The inevitable result of higher UK base rates is that lenders are having to trim margins to remain competitive.
House prices have remained solid in many parts of the UK, despite steeply rising mortgage rates, as the supply of homes for sale has been outstripped by demand for property.
If you need expat mortgage advice, please do make contact and one of our independent advisers will be happy to help.