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.

How will the new lockdown affect the market? What impact for Expats?

As we enter 2021 and into national lockdown, many expats are speculating on what the coming year has in store for the property market.

The government has confirmed that the housing market will remain open during the new national lockdown.

For many homebuyers and sellers, this is positive news, with thousands of transactions currently underway.

While the news that home moves can still take place has been well received, there are strict guidelines to be followed. Viewings are still allowed to take place where relevant social distancing and PPE measures are adhered to.

Removal firms can still enter properties, but it is advised that those outside of an individual bubble do not help with the move. Guidelines are being updated regularly and it is advised to follow updates from the Ministry of Housing, Communities and Local Government if you have a move underway.

Calls to extend the stamp duty holiday are still being heard

The market continues to react to the news that there are no plans for an extension, or tapering, of the stamp duty holiday.

Following the statement issued by the Treasury, many homebuyers feel concerned about the progress of their transactions.

With reports that almost a third of buyers will pull out if they miss the deadline, the effect that this could have on the market is uncertain.

However, calls for an extension, or tapering, of the planned stamp duty deadline, are still being heard.

Many are looking to the Chancellor to allow more transactions to benefit from the tax savings, through either an extension or tapering of the deadline. These calls look set to continue into the new year as the 31 March deadline draws ever close.

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

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 very good time to check you are not paying more than you need to. Read more

Expat landlords will be confident

It has been an extremely hard year for landlords up and down the UK and also those living abroad.

The good news is that, despite all the recent changes rewards for landlords can still be exceptionally good. Demand for good quality rental property continues to rise year on year due prospective first-time buyers not being able to get onto the so called “property ladder”.

Rents are at an all-time high and will be rising later this year if the experts are correct.

The Brexit deal has been done and at first sight seems to be in the Expats favour. The hope now is the pound will now strengthen to assist all round.

Expat landlords remain confident that the future is good, and they have every right to do so as property in the UK continues to increase in value consistently. Last year alone the property owner in the UK saw their investment rise between 2-4% and you simply cannot earn this if your money is invested in a high street bank.

If you are looking to enter the expat buy-to-let market consider these points:

  • Target your tenant – Students, young professionals, or families.
  • Purchase the right sized property – Vast majority of tenants want 1-2 bedrooms.
  • Location – Key to any success, near schools, shops, and local businesses.
  • Equip your property – Ask local agents, furnished or unfurnished.
  • Property – Should be clean, well decorated and meets government regulations.

Following these very simple tips will ensure you have maximised your long-term potential profitability.

Expats buy-to-let mortgages.

If you require assistance in choosing your new or re-mortgage do give one of our fully qualified independent advisers a call and we will be happy to help.

Expat mortgage approvals rising steadily

Approvals for house purchases in the UK by expats increased towards the end of 2020 and 2021 has followed the same pattern according to the latest figures from the Bank of England.

The number of expat loan approvals for purchasing in the last 3 months is up a massive 21% on the same period last year. Re-mortgaging saw an astonishing increase of 41% over the same period. These high figures are most likely are due to the Brexit conclusion.

The next few months are likely to be less active, but at present we can confirm business is highly active with the buy-to-let market surprisingly leading the way.

Re-mortgaging in the expat market continues to be very buoyant as homeowners look to lock in advantageous interest rates which are still currently on offer. These rates are likely to disappear as the year progresses if the experts are correct as a rate rise is expected.

Why re-mortgage?

There are many reasons you may wish to consider a re-mortgage and it is without any doubt something every expat homeowner should consider, especially if you are stuck on your current lenders standard variable rate. It is not always best advice as your current deal may have conditions that are not beneficial to re-mortgaging, but you should take time to review on a regular basis. So why re-mortgage?

1) Secure a better rate of interest than you are currently paying.
2) Change current deal to a fixed rate for long term security.
3) Raising capital from equity within your property.

Need assistance?

Our professional team of fully qualified independent advisers are used to dealing with all types of expat re-mortgage/mortgage business. Please do call to discuss your requirements and we will be happy to help.

Expats are choosing independent broker assistance for mortgages

The number of expat mortgages coming through brokers has risen steeply over the last 2 years, this figure now stands at 74.3% from 64% in the last 12 months

Need for help

Brokers believe the increase in regulation and complexities of the market are the driving factors. Affordability calculations and lender criteria have become harder for consumers to understand.

It is not surprising that more and more clients are choosing to obtain their mortgage via an independent broker as lenders require more detail than ever before.

This is not to say it is more difficult to obtain an expat mortgage just far more complex. For the majority of expat clients who reside abroad communicating with a lender in the UK can be very time consuming and confusing.

Expats seem to value a personal service which is often missing from the high street banks email service, this is particularly the case with expats re-mortgaging.

Buying a home in the UK is a challenging task if done from afar so making the mortgage application as pain free as possible is obviously a huge advantage for the expat.

It is very clear that expats appreciate the value of a broker who can guide them through the process and provide quality advice on the best options available to them.

Independent broker benefits

  • Full range of mortgage choices
  • Industry qualified advisers
  • UK based for easy communication
  • Fully automated service
  • Faster completion

Assistance required

If you would like help with your new or re-mortgage, please make contact and one of our advisers will be happy to help.

What mortgage type do you need as an Expat?

If you are looking to buy a property with an expat residential mortgage, you or a member of your family must live in it – either now or in the near future. Essentially, it’s a home.

However, as a foreign national, a UK residential mortgage isn’t straightforward. Residential mortgages are regulated by the Financial Conduct Authority (FCA) so lenders who want to provide mortgages to overseas customers have stricter criteria. And what this translates to is fewer options. As a result, many non-UK buyers tend to use buy-to-let mortgages to buy their property.

The buy-to-let product offers buyers greater flexibility as the property owner can rent the property to a tenant or a family member as well as live in it themselves. Overseas buyers in territories such as Hong Kong, Singapore, and the USA have continued to make buy-to-let mortgages the preferred product choice.

Buying a UK property with a buy-to-let mortgage is a great option for non-UK expats. While you live and work elsewhere, you can get another stream of revenue from renting your property to a tenant in the UK. In the future, you can sell this property as part of a retirement fund or you could even move into it.

If your child wants to study in the UK, owning a property is a great opportunity for them to have a UK base. A UK property can also serve as a great starting point for a larger investment portfolio. In short, a buy-to-let mortgage offers breadth of choice and it facilitates adaptation to changing circumstances.

Buy-to-let mortgages are also more flexible than residential mortgages. For example, you can move into a home bought on a buy-to-let mortgage. However, you cannot rent out a home bought on a residential mortgage without getting permission from your mortgage provider and switching your mortgage to a buy-to-let which, in some cases, can be expensive and not always guaranteed by your current lender.

Help required?

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

Outlook steady despite all the uncertainty – Expats take comfort

The Bank of England has held interest rates at the historic low of 0.1% in its latest base rate decision, saying the UK’s economic outlook is ‘unusually uncertain’.

The Monetary Policy Committee (MPC) voted unanimously to keep the base rate, which acts as a guideline for banks and lenders when they set their interest rates, at the level it’s been since March.

Normally the Bank holding rates isn’t surprising, but this comes after speculation that the interest rate would fall to 0% or even into negative figures.

Reports emerged in October that the Bank had written to the chief executives of several firms to ask whether their companies would be ready for a negative base rate, and it’s known that the Bank is actively exploring the option of setting a negative rate.

Why the base rate matters?

The Bank of England base rate influences how much banks and other lenders charge customers to borrow money, and the amount of interest they pay on savings.

A lower base rate generally means lower interest on savings, so your pot will grow a little more slowly. But mortgage and loan interest rates are likely to drop, too, making it cheaper to borrow.

Higher base rates usually mean that savings interest grows faster, but mortgages and loans become more expensive.

The Bank of England changes the rate to help keep inflation at around 2%, which is considered a sustainable level, raising and lowering it in line with current events. It kept the rate the same for years after the 2008 crash, but Brexit – and now coronavirus – have forced the Bank to make quick and dramatic changes.

Expats need to get moving

Brokers with expat and foreign investor customers buying property in the UK, need to secure completion before 31 March next year or face the risk of customers paying a large surcharge.

That is the warning from the expat mortgage markets, which explains that expats who miss the deadline will face higher stamp duty levies than residents.

Lenders, who are involved in the expat sector, are concerned that the current focus is on domestic borrowers beating the re-establishment of stamp duty on 1 April, but the 2020 budget announcement also included an extra 2% levy on property bought and completed by expats after 31 March.

With all the other news surrounding Covid-19, it would be easy to forget that the 2020 Budget also stated that the 3% levy on second homes will also apply to expat purchases after the 31st March, so that overall, completing from April 1st, expats will be paying 5% more than the standard rates. A double blow.

The property market is booming at present and expats are keen to maintain and establish a property foothold, even if they do not intend to live in the UK at present.

Advisers whose expat customers complete before the 31st March benefit from the postponement of the standard rate of stamp duty in the same way as everyone else, but now is the time to act before what could be up to an extra 5% levy is introduced in April.