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.

 

 

 

 

 

Recent figures show that an estimated 220,000 expats own property in the UK and the vast majority let their properties out to achieve extra income.

Expat landlords could be looking at reduced profitability on two fronts, firstly taxation and secondly an interest rate rise which looks likely.

One client of ours we recently spoke to said “as an expat with 3 rental properties I am returning to the UK for a meeting with my accountant to review the new tax laws on buy-to-lets”. “I am also currently reviewing my mortgages with a view to fixing a rate for as long as possible”.

Looking at the immediate future it would seem to be very good advice if you are an expat landlord to review all aspects of your UK property.

In the last 3 weeks we have seen a big increase of enquiries into buy-to-let fixed rate deals. Good news is there are still some very good deals to be had which could assist you protecting your profitability.

Way forward as an Expat Landlord

Firstly, get in touch with an accountant and see what can be done to reduce the effect of the new tax laws coming into force since Brexit. Secondly completely review your current mortgage deal to make absolutely sure the deal you have meets your needs now and 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.

By just completing these two simple tasks you could very well save yourself thousands of pounds over the next few 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.