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.

 

Expats are looking for more long-term stability

More expats with mortgages on UK properties are looking to lock in a longer fixed deal than ever before. Experts believe this situation has been brought about due to the Brexit uncertainty and what could happen to the mortgage market in the immediate future.

Popularity of longer-term deals had waned at the start of 2020 with expat borrowers opting to fix their mortgage for two years, according to the latest figures.

In the later part of last year demand for five-year fixed-rate re-mortgages went up 32%, representing half the market according to the report.

Lenders are eager to attract longer-term business which has created a competitive landscape for expats. This has ensured five-year average rates have remained relatively flat month-on-month.

Five-year fixed deals tend to be more popular amongst borrowers who are seeking stability. Expats will be opting for these deals to provide some certainty amid the potential economic and political upheavals in the next few years due to Brexit and now Coid-19

Currently over 71% of expats re-mortgaging expect a rise in the Bank of England (BoE) base rate this year. This compares to 35% in April 2020.

After hints of a rate increase earlier in the year, sluggish economic growth discouraged the BoE from raising the base rate. Yet more than three quarters of borrowers still believe another base rate increase will happen at some point in the next twelve months.

Independent brokers

It also emerged the number of expat borrowers using an independent broker to re-mortgage has also hit a record high in December/January.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our independent advisers will be happy to assist.

Expats want to hold onto UK property and increase if possible

Expats are in ever increasing numbers trying to either get on the ladder or increase their current UK holding. The majority of expats see property in the UK as a “pension fund or long-term investment” or a way of laying financial security for the future.

Bricks and mortar have always been a national obsession. The wisdom that property is fundamentally an exceptionally good long-term investment has been passed down from generation to generation.

Expat mortgage applications are currently at an all-time high and the outlook for 2021 remains incredibly positive. It would seem that the high property prices do not deter the investor.

According to recently released figures the UK property market has been the best performing in the whole of Western Europe. It is therefore not surprising that so many people want to invest in an ever-shrinking market.

Is it a good time to buy in the UK?

The very quick and simple answer is most certainly YES, if you have the funds for a deposit now would seem the right time to buy. The affordable properties that are available to purchase seem to be diminishing on an annual basis, which without doubt will mean higher prices to pay in the future.

Leaving the EU.

This is the one only unknown area that could affect the property market, if all the experts are correct it is unlikely to have any lasting long-term damage.

Need assistance?

If you require help with your current or new mortgage please call one of our experienced advisers who will be happy to assist.

Expats who have UK property did reap rewards

2020 proved to be a very strange year indeed with the pandemic capturing the headlines every day and the economic consequences of the lockdowns impinging on every aspect of daily life.

However following an initial hiatus in the Spring the housing market bounced back strongly – and somewhat surprisingly – as evidenced by the statistics provided by some agents, lenders, and the Land Registry.

It is worth taking a closer look at some of these statistics and what they might tell us about government policies in relation to the housing market and mortgage lending.

For example, it seems likely that in most parts of the country any savings purchasers made as a consequence of the Stamp Duty holiday were wiped out by the increased price they had to pay for the house.

Sources

The Land Registry recorded a 7.6% increase in average house prices (with all these statistics ‘houses’ include flats) with the average property price for the UK reaching £249,633 in November.

The Land Registry uses completed sales transactions so there is a time lag before its statistics are updated. The Nationwide index rose 7.3% to £230,920 in December. The Halifax index finished the year 6% up at £253,374.

The future.

So what has been going on? Conventional wisdom would suggest that in a period of economic uncertainly, rising unemployment, and eye-watering levels of government borrowing we would see a fall in property prices or at the very least a much-subdued market.

The Land Registry statistics are based on all completed sales many of which are cash sales that do not involve a mortgage.

The Halifax and Nationwide statistics are based only on transactions involving a mortgage. Typically about a third of sales are for cash and this proportion is even higher in retirement areas.

The Nationwide index is statistically weighted to compensate for this so we have the Land Registry said prices have risen 7.6% and Nationwide closely shadowing this saying 7.3%.

Halifax is much lower at 6% although the Halifax average price is higher than Nationwide’s.  What they all agree is that 2020 saw a significant increase in house prices.

Interest rates

The main factor driving the housing market is the current historically low level of interest rates and the fact that mortgage lenders were able to continue to support the market by lending throughout the pandemic.

These low interest rates will not last forever, but they do currently bolster affordability and borrowers who are fearful of an interest rate hike can currently opt for a fixed rate extending some years into the future.

 

This is a lot easier and could save thousands!

Thousands of expat borrowers could be missing out on a better mortgage deal by not speaking to an independent adviser, research has found.

The survey of over 1,200 expats revealed that 33% who went direct to a lender did not understand how an independent mortgage adviser could help with their search.

The findings also showed that 66% of borrowers who went straight to a lender hadn’t re-mortgaged in the last five years, while 74% stayed put because they felt they had a ‘good deal’.

Without seeking independent mortgage advice, individuals would have missed out on the extra mortgage deals that are only available through an independent mortgage adviser.

The analysis showed that the mortgage industry still needs to demonstrate the value of independent mortgage advice to expat borrowers – just 30% of those who went direct to the lender said that they would likely speak to a mortgage adviser next time.

Meanwhile, 60% who didn’t seek advice when they took out their last mortgage didn’t know mortgage advisers were there to help the borrower, and just over a third (34%) thought an independent mortgage adviser was there to support the lender.

What is more, borrowers going through an independent mortgage adviser have access to far more mortgages than those going direct to the lender.

Expats who benefitted from a mortgage adviser searching the market for the best mortgage deal were more likely to have switched in the last five years (29%), compared to just one in five (19%) of those who went direct.

Expats who used a mortgage adviser were also in favour of doing so again. Nearly all (98%) said that they found the support of a mortgage adviser ‘valuable’ and a further 95% said they would recommend using an independent mortgage adviser to family or friends.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our fully independent advisers will be happy to assist.

Expats are re-mortgaging for value

Expat re-mortgaging levels have soared to an eight-year high as borrowers take advantage of lower monthly repayments, figures have revealed.

The number of expats re-mortgaging in December and January increased by more than a third year-on-year to almost 3,300 – the highest number since January 2011.

The value of re-mortgaging fell due to a drop in the average loan size, but with overall mortgage activity down it still accounted for two-fifths of total lending in December and January alone.

Expat borrowing activity has been fuelled by the lower rates on offer, rates currently are the lowest they have been for the last 7 years. However, there are fears the boom may not last, amid a fall in affordability and expectations of a rise in interest rates.

In January, the repayment as a percentage of total income rose month-on-month from 17% to 18%, while 54% of those surveyed in February expect a rate rise within the next year.

Expats who have not reviewed their current mortgage deal recently would be well advised to do so as rates are expected to rise later this year.

Help required?

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

No wonder expats want more UK property

A major shift in housing needs driven by the pandemic and lockdown has pushed house prices up to their highest levels ever, Nationwide has reported today.

According to the building society’s latest house price index, prices grew by 6.9% annually in February.

This followed a slight slowdown in January when annual prices climbed by 6.4% and prices dipped compared to the previous month.

But February experienced something of a rebound according to Nationwide, with month-on-month growth of 0.3% which ‘more than erased’/ the small decline experienced in January.

It means the average house price in the UK in February was £231,061 which, according to the building society, is the highest on record.

This rise has indeed been a surprise, it seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase. While the stamp duty holiday is not due to expire until the end of March, activity and price growth would be expected to weaken well before that, given that the purchase process typically takes several months.

Changing housing preferences

The shift in housing preferences might be responsible for this increase in demand.

Indeed, the lockdown and increasing numbers of people who have begun working remotely, has prompted a shift in preference towards more spacious properties in less densely populated areas.

Far from surrendering its gains, the housing market has launched a surprise attack on previous highs, aided by armies of people who still want to shed the home they discovered was too small for them during repeated lockdowns.

Record high agreed sale prices are a sign that the market is still being buffeted by the unshakeable desire of many to move to larger, more spacious, and more expensive homes.

 

Expats are keeping active after Brexit.

Expats are in ever increasing numbers trying to either get on the ladder or increase their current UK property holding. The majority of expats see property in the UK as a “pension fund” or a way of laying financial security for the long-term future.

Bricks and mortar have always been a national obsession. The wisdom that property is fundamentally an exceptionally good long-term investment has been passed down from generation to generation.

Brexit

This is the one area that could affect the property market, if all the experts are correct it is unlikely to have any lasting long-term damage. Facts are whatever happens the UK property market is highly likely to remain strong and positive.

Applications

Expat mortgage applications are currently at an all-time high and the outlook for 2021/22 remains positive. It would seem that the high property prices do not deter the investor. Expats seem to have the attitude that investing in savings accounts are a lost cause and property offers far better returns in the long run.

According to recently released figures the UK property market has been the best performing in the whole of Western Europe. It is therefore not surprising that so many people want to invest in an ever-shrinking market.

Need assistance?

If you require help with your current or new mortgage please contact one of our experienced independent advisers who will be happy to assist.

 

Expats – How will your investment perform in 2021?

House prices will rise between 3% & 5% across the UK next year, according to figures released by one of the major high street banks.

If these figures are achieved it follows the trend of this year, the report states increases in values could be stifled by the possibility of interest rate rises. Another factor that could possibly slow growth down is first time buyers being unable to get onto the property ladder.

As an expat with property in the UK if you compare this annual growth to what could be achieve from an investment in any high street bank, property looks a particularly good bet indeed.

Interestingly the report states they expect growth to slow slightly more in central London than elsewhere. The reason for this is the sheer lack of earnings to meet the rising costs of property. People looking to move into London and the surrounding areas just cannot get jobs that pay enough to support any form of mortgage.

Property in short supply

There has been and still is a shortage of supply which constrains activity in the housing market and levels of house building remain low.

It is believed due to the shortage of property available that house prices will remain stable for the foreseeable future which spells good news for expats with property in the UK.

Mortgages

Expat mortgages remain relatively easy to obtain with a good selection of products available. This is expected to remain constant for the coming year with the prospect of two new lenders entering the market.

Need some help?

If you require any assistance with your new or existing mortgage please do call one of our fully qualified independent advisers who will be happy to help.