Expats, does your mortgage need reviewing?

Best advice is to get it reviewed to ensure you are on the best deal.

The low rates on offer will NOT last forever – act now and save.

A former Bank of England Monetary Policy Committee member has predicted that interest rates could rise significantly in the next few years.

Inflation has now caught up with wage growth causing a sharp consumer slowdown and the weak pound has also squeezed consumers and the expectation is that households will adjust their spending downwards.

More and more expats are looking for ways to reduce their monthly outgoings. One of the biggest expenses most people have every month is their mortgage payment.  Keeping this in mind it would be a wise move to review your current mortgage to ensure you are on the best deal possible.

This will not be the case for everybody, your current deal may well be particularly good, but it is most certainly worth checking before the end of the year.

It is highly recommended to seek professional independent advice as to what new deal could suit your current situation.

Reasons to consider a re-mortgage.

  • To save money.
  • Raise extra cash for a project you have planned.
  • Your current deal is ending soon
  • Transfer to a fixed medium/long term deal

Help required?

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

Expats who do not review their mortgage could be paying 1000’s more!!

Now more than ever expats are looking for ways to reduce their monthly outgoings, one of the biggest expenses most people have every month is the mortgage payment.

As an expat there is a lot of uncertainty at the moment with poor exchange rates and the Brexit situation taking time to settle. It may be a very prudent move to review your current mortgage to establish if it is still the best deal for you, and you are not paying more than you need to.

This will not be the case for everybody, your current deal may well be exceptionally good, but it is most certainly worth checking as the wrong deal could be costing you thousands extra every year.

Expats have an excellent choice of mortgage deals currently available, so it is a particularly good time to check you are not paying more than you need to.

If you decide to re-mortgage this may an opportune moment to review any expensive loans and credit cards you may have. It is likely the UK property has gained in value giving you a larger equity which could be used to reduce the expensive debt.

Reasons to re-mortgage

  • To save money.
  • Raise extra cash for a project you have planned.
  • Your current deal is ending soon
  • You want to pay more to clear the loan earlier and the lender will not permit this.

Can we help?

If you would like to review your current expat mortgage do make contact and one of our fully qualified independent advisers will be happy to assist.

 

Stamp Duty Did You Know?

The current stamp duty holiday on properties valued up to £500,000 comes to an end on 30th June but did you know that you can still enjoy a stamp duty holiday on properties valued up to £250,000 when your purchase completes by 30th September.  The additional SDLT for second homes and expats remains in place, but there are still 3 months left to take advantage of the buoyant UK housing market and make your purchase with considerable saving.  If you have been considering a new purchase in the UK with an expat mortgage, please get in touch so we can provide you with indicative quotes tailored to your needs.

 

Great news for Expats with property in the UK

Property prices rose 1.8% in May to reach a new record average price of £242,832, according to Nationwide.

The building society said prices are up £23,930 over the past 12 months alone, an annual growth rate of 10.9% and the highest recorded in seven years.

The market has seen a complete turnaround over the past twelve months. A year ago, activity collapsed in the wake of the first lockdown with housing transactions falling to a record low of 42,000 in April 2020. But activity surged towards the end of last year and into 2021, reaching a record high of 183,000 in March.

While March’s spike in transactions was driven by the original end date of the stamp duty holiday, a lot of momentum has been maintained. Research indicates that the extension to the stamp duty holiday is not the key factor, though it is clearly impacting the timing of transactions.

Amongst homeowners surveyed at the end of April that were either moving home or considering a move, more than two thirds (68%) said this would have been the case even if the stamp duty holiday had not been extended. It is shifting housing preferences which is continuing to drive activity, with people reassessing their needs in the wake of the pandemic.

The frenzy to snap up a property at the tail end of a pandemic is showing no signs of stopping, with double digit growth in house prices throughout May – the highest we have seen in the best part of a decade.

It is still crucial that prospective buyers go into the process with a sound understanding of the market and what they want from a new property.

As demand in the market increases, the extra competition creates a fear of missing out that can distract buyers from the fundamentals. It’s important not to let the current property frenzy draw attention away from what you are really looking for.

Expats, looking to lock in longer deals

Mortgages with five-year fixed rates have undergone a surge in popularity within the expat community, nearly half of the completed deals recently have been for 5 years or more.

Data revealed 49% of expats are now choosing an initial fixed rate period of five years compared to only 25% back in 2015.

Meanwhile, mortgages with rates fixed for two years have experienced a plunge in popularity with 36% of customers choosing the shorter-term fixes compared to more than half in 2015.

Brokers think the fact the Bank of England base rate is currently low, coupled with fears over future rate rises, is main driver behind the soaring popularity of five-year deals, which allow customers to lock into a specified rate for a longer term.

Potential pitfalls of five-year deals

While they provide a certain amount of security, five-year fixes aren’t necessarily for everyone. Indeed, several of those questioned in the survey of 200 mortgage intermediaries raised concerns.

They stressed that products with a longer term initial fixed period might only be suitable for customers who expected to stay in their current home for an extended period. This was because anyone considering a house move might have to pay early redemption penalties which could outweigh the benefits of a longer-term deal.

Low interest rates, economic uncertainty around Brexit, a reduction in home-mover transactions and more re-mortgaging means that five-year products have become a viable option for a much larger proportion of customers.

Outlook

Going forward, the brokers questioned, did not see any reason for five-year fixed rates to fall out of favour.

However, many said a stable economic climate post Brexit, which could lead to an interest rate rise, was the most likely cause of any reduction in the attractiveness of the five-year fix.

In need of some guidance?

Can we be of assistance with your new mortgage/re-mortgage we have fully qualified independent advisers waiting to help you.

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.