Are you an Expat with a mortgage on a UK property?

Experts are predicting interest rate increases

There is a lot of evidence to suggest interest rates are going to be rising sooner rather than later. Facts are a sizable number of expats have already transferred to a fixed rate mortgage deal; we have seen a significant increase in re-mortgaging since the turn of the year.

Base rates may well be on hold at present and mortgage rates are at the lowest they have been for many years. One thing is for sure if the bank base rate rises then mortgage interest rates will very soon follow suit.

A recent survey of expats showed that if this happens over 45% are not prepared for the increase in expenditure. The survey also revealed the majority of people have taken for granted the current low interest rates and that they will remain for a good many years to come. This may well be a very dangerous attitude to adopt as things can change very quickly in the world of finance.

It is widely expected in financial circles that interest rates will start to increase in the not-too-distant future, keeping this in mind if you are an expat with a mortgage it would be very wise to review it as soon as possible.

The future

With all the above considered it could be a very good time to look more closely at your current mortgage deal. By acting now you could save a great deal of money now and in the future.

Every expat has unique needs and objectives but one thing we all have in common is saving money. If your current mortgage deal has no exit penalty or is coming to the end of its deal period, you may wish to look at a fixed rate deal. There are currently some very advantages rates on offer so now could be a very good time to act.

Can we help?

If you require assistance or would like to talk over your current mortgage, please do call one of our fully qualified advisers and we will be pleased to assist.

Expats are using the equity in their properties to raise funds

The expat new and re-mortgage market last year saw increased activity especially towards the latter part of the year. Applications for re-mortgages rose by37% over 2020 and have to date continued in the same vein into 2022.

With the value of UK property still on the rise month on month expats have seen this as an opportunity to raise capital for alternative ventures.

It is expected that property values will continue to rise over the next few years albeit at a lesser pace. The Brexit negotiations are completed, and the markets seem totally unaffected with the outcome.

The chancellor is predicting interest rate rises in the future but at a “steady” pace.

All these factors are giving expats confidence in the future and capital raising seems to be the order of the day.

Lenders have responded to this activity and increased the number of mortgages available to the expat. Expats now have a good range of products to choose from with competitive rates on offer.

If you are thinking of re-mortgaging there are many pros and cons and all aspects need to be carefully considered before any decision is made. It is recommended that you seek professional advice as to whether this suits your needs both in the short and longer term.

Will rates increase?

I guess this is the “million dollar” question, if all the predictions for the long term are to be believed it is likely we will see rate increases later in the year. It is most likely these increases (if any) will be on a small scale as the Chancellor said in November last year.

Need some help?

If you are thinking of re-mortgaging or want advice on a new mortgage please do call and one of our fully qualified advisers who will be happy to assist.

 

 

Expats, using a professional broker can save money – fact

A recent survey has claimed that thousands of expat borrowers could be missing out on a better deal by not speaking to an independent mortgage adviser when looking for a mortgage.

Its survey of over 1,500 expats found that 31% of consumers who went direct to a lender didn’t understand how a mortgage adviser could help with their search.

The findings also showed that 69% of borrowers who went straight to a lender hadn’t re-mortgaged in the last five years and 74% stayed put because they felt they had ‘a good deal’. However, without seeking independent mortgage advice, these individuals would have missed out on mortgages deals that are only available through an independent mortgage adviser.

There are plans to use the research to tackle the misperceptions about independent mortgage advisers and raise awareness about how they can help borrowers to find the right mortgage for their needs.

Borrowers going through an independent mortgage adviser have access to many more mortgages than those going direct to the lender, including specialist mortgages for the self-employed and later life lending solutions such as lifetime mortgages..

Homeowners 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 19% of those who went direct. 

Borrowers who used a mortgage adviser were also overwhelmingly in favour of doing so again. 98% said that they found the support of a mortgage adviser ‘valuable’ and a further 95% said they would recommend using a mortgage adviser to family or friends.

Help required?

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

 

Expat landlord or would you like to buy in the UK?

With the new tax changes that have come into force recently, expats are strongly advised to seek advice from an accountant on what can be done to maximise profitability.

Expat landlords could be looking at reduced profitability due to the tax relief on mortgage interest paid being changed. There is also a new stamp duty level that has been introduced so any expat contemplating a purchase needs to be fully informed.

Looking at the immediate future it would seem to be very good advice if you are an expat landlord to seek professional assistance as to the options available.

A local accountant we spoke to said, “We are getting more and more expats than ever before coming to us to seek advice on incorporation or more general tax advice”.

The way forward

Firstly, get in touch with an accountant and see what can be done to reduce the effect of the new tax laws that have come into force.

It is likely the accountant will recommend setting up a limited company to enable more tax advantages. Good news for expats is you can have a limited company registered in the UK whilst living overseas.

Secondly, completely review your current mortgage deal to make absolutely sure the current mortgage you have meets your needs now and in the longer term. It may very well be you currently have the correct mortgage, but it won’t do any harm to check it out.

It could be a very good time to consider re-mortgaging to release capital if required. By just completing these two simple tasks you could make huge savings over the coming years.

Need some mortgage advice?

If you wish to review your current mortgage please do contact one of our qualitied independent advisers and we will be pleased to help.

 

Expats increasing their portfolios rapidly

September this year has seen a record level of expat buy-to-let mortgage approvals as landlords look to increase their portfolios. Our recent survey of expat landlords clearly reveals they are in the market to increase their holdings as quickly as possible. The reasons are numerous for this trend, but landlords are very encouraged by the demand for rental property plus rents are increasing annually.

The survey revealed that over 50% of current expat landlords are achieving net returns of between 6.5% and 8.75% on their current portfolios. This is obviously a much larger return than any traditional savings account can currently offer.

With house values still on the increase year on year landlords are also seeing the equity within their properties increasing at a very good rate. So with all this positivity it is little wonder buy-to-let mortgages are increasing rapidly.

Home ownership in the UK has fallen to its lowest level for over 25 years which may well shock some people. When you look at the overall cost of buying a property in the UK perhaps it is not quite so surprising.

Buy-to-let mortgages

UK and expat landlords are reaping the rewards of lower mortgage interest rates and set up fees. With so much competition in the marketplace lenders are being forced to make very attractive offers to lure clients towards their product.

We always recommend being very selective before deciding on what mortgage best suits your needs. With so many deals on offer it always pays to look at all the options, for example a long-fixed rate deal may be very prudent with the fear of a rate rise looming.

Need some help?

If you need assistance when choosing your next mortgage call one of our experienced independent advisers and we will be pleased to assist.

 

Who needs an expat mortgage and what are the typical reasons? 

Britons living abroad, either temporarily or permanently, will need to obtain a mortgage from a lender that has chosen to lend to expats.

Typically, expats are looking to invest in buy-to-let property whilst living overseas, perhaps to provide an income in retirement or even to live in upon their return.

Whilst fluctuating exchange rates can, at times, provide a good opportunity for investors, it is also true to say that many expats earn better salaries abroad than they would do here in the UK. A lower cost of living means they have more disposable income and want to invest in UK property.

Aside from investors enquiries from individuals looking to buy properties for their families to live in – frequently where children are involved and the preference is for them to be schooled in the UK.

Selecting a mortgage to suit your needs

Securing an expat mortgage doesn’t have to be difficult, it is always recommended to get expert professional help. Using a specialist expat broker will without doubt give you the edge as they will be experienced in this type of mortgage process.

UK property prices increasing

According to the latest figures house prices are on the rise again, September and October saw good growth although not like years gone by but still very encouraging.

It is expected that house price increases will level out over the next year with a steady but reliable growth rate, again spelling good news all round.

So, at present the outlook for 2022 is very positive indeed, the signs are this will continue for the foreseeable future.

Can we help?

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

 

Expat ownership triples in 10 years

The number of properties in England and Wales owned by foreign citizens has tripled from 88,000 in 2010 to nearly 250,000, according to new analysis by the Centre for Public Data.

Over 247,000 residential properties across England and Wales are now registered to individuals with an overseas correspondence address, nearly 1% of all registered titles compared to 0.4% in 2010.

The data was obtained from HM Land Registry on the number of property titles owned by individuals with an overseas correspondence address.

Three-quarters are registered to individuals with addresses in just 20 countries, with the main groups being the Crown dependencies and British Overseas Territories, namely Jersey, Guernsey, Isle of Man and the British Virgin Islands, and also more recently South-East Asia and the Middle East, and English-speaking countries.

This is borne out by the current statistics from Guernsey-licensed bank, Skipton International, which specialises in buy-to-let mortgages for non-UK residents.

At the end of October 2021, 35% of their mortgage pipeline was from Hong Kong residents, with Singapore and the UAE also featuring heavily.

The growth in interest in cities such as Newcastle, Manchester, Liverpool and Leeds has also been notable, particularly since 2016.

Skipton mortgage manager Lorraine McLean says: “The UK is viewed by many as a solid, stable jurisdiction and many global investors are looking to the UK residential market.

“In 2019 we extended our UK mortgage proposition to include applications from overseas non-UK nationals and we are now seeing interest from a range of nationalities resident in countries around the globe.”

 

Expat mortgage activity sees record high applications

Expat first-time buyer activity reached a 2 year high at the end of October this year after soaring more than 40% on the same period in 2020. In October alone the expat mortgage industry saw an increase in applications for new mortgages rise by 38%. These figures go to prove that expat’s still see property in the UK as their number one investment, and it is little wonder when you see the growth the market has shown over the last 10 years.

The UK housing market keeps going from strength to strength even with the Brexit setbacks which now seem to be coming to a head. This growth is likely to continue due to the chronic shortage of quality homes for sale. If this continues to be the case in the future property prices will remain high and increase accordingly.

Estate agents around the country are reporting a high demand for low end quality properties with first-time expat buyers being very active.

The UK property market continues on an upward spiral and offers longer term growth and security. Mortgage lenders are still reducing interest rates to attract new business, so if you are contemplating investing now would seem a good time to buy in the UK.

There is little doubt the attractive mortgage interest rates currently on offer have played a key role in driving these figures. Expat borrowers have taken advantage of the current low rates and used a re-mortgage in particular to their benefit.

Can we assist you?

If you are looking for help with your new or re-mortgage please contact one of our fully qualified independent advisers and they will be happy to guide you.

 

Expat buy-to-lets are increasing all the time

There seems to be no stopping the buy-to-let expat market, applications for the first 6 months of this year were up again on this time last year. Expats seem to be determined to get a foothold in the UK property market and existing expat landlords are not shy to increase their portfolios either.

Even with all the new legislation including tax changes doesn’t seem to dampen expats enthusiasm for the buy-to-let market.

The general consensus of opinion is that UK property still offers good long-term potential. One expat landlord commented “our UK property returns a good rental income annually even with the new tax laws and the value since we bought it has increase by £51,000, so it’s not all bad”.

Buy-to-lets may well be in for a rocky ride over the next few years but the general feeling is that in the long-term potential is still very good.

Are good interest rates for expats still available on buy-to-lets?

Well, the simple answer to that is yes! if you have a sizable deposit then rates are even better. Mortgage lenders are currently fighting to secure your business in a very competitive marketplace.

We have seen an increase in longer term fixed rate mortgages recently as clients want to set their outgoings of their investment property. There is also talk of rate rises later this year so this route would seem a very sensible one to consider.

It is commonly known with buy-to-let mortgages the larger the deposit you can put down the better the deal that can be secured.

Need assistance?

Our professional independent advisers are used to dealing with all types of buy-to-let mortgages, they have vast experience in this area. Please do call to discuss your requirements and we will be happy to help.

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.