Expats and the UK buy to let market

For UK nationals living abroad, expat buy-to-let mortgages offer a pathway to invest in the UK property market. These mortgages are designed for those seeking to purchase property for rental income while residing overseas.

However, they differ from standard buy-to-let mortgages due to the complexities of international finance.

Key considerations include if you are thinking of entering this type of investment

• Lender Criteria:
  • Lenders often have specific requirements regarding the applicant’s country of residence, income verification, and credit history.
  • Many lenders will have restrictions on the number of buy to let properties that one person can own.
  • It is common for lenders to require that the applicant hold a UK passport.
• Rental Income Coverage:
  • Lenders assess the property’s potential rental income to ensure it covers the mortgage repayments.
  • They often apply a “stress test,” calculating whether the rental income would still cover repayments if interest rates were to rise.
• Currency Fluctuations:
  • For those earning in foreign currencies, fluctuations can impact affordability. Lenders will factor this risk into their assessments.
• Tax Implications:
  • Expatriates must be aware of UK tax laws regarding rental income, as well as any tax implications in their country of residence.
• Property Location:
  • Lenders may have restrictions on where the property is located within the UK.

It’s crucial for expats to seek independent advice from specialist mortgage brokers who understand the intricacies of these mortgages.

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.

Are you an Expat thinking of entering the buy-to-Let or holiday let market in the UK?

 If you are then you need to proceed with caution!

 Firstly, seek advice on your tax position. Incorporation (Creating a limited company) could be right for you.

More and more expat investors are considering entering this market for various reasons. So, what can a buy-to-let investment offer you?

Interest only mortgages.

Good potential returns on capital invested.

Attractive mortgage interest rates.

Potentially better returns than on offer at high street banks.

Better return on capital invested.

You will generally need a deposit of at least 25% this varies from lender to lender but the bigger the deposit the better the deal and lower interest rates.

Expats are actively looking for buy-to-lets and holiday let properties as demand grows.

Overseas buyers and expats are sizing up the UK property market for potential bargains, taking advantage of the weaker pound, according to the latest figures released.

Investors are keen to capitalise on softening prices and are looking for discounts. This could fuel demand for UK property, alongside expats planning a return to the UK.

Mortgage assistance?

If you are contemplating entering this market or require assistance with a re-mortgage, please do contact us. We have experienced independent advisers who will find the correct deal for you.

Best Mortgage Deal For Expat Landlord. Firstly The latest data and analysis highlighted failing to switch mortgage issues. Lapsing onto their lender’s Standard Variable Rate (SVR) has seen the average landlord hit with £2000 a year in extra interest.

According to the study, which looked at 5 major expat UK lenders. As analysed the jump in interest charges from each provider’s best two-year fixed rate deal to their associated SVR. Which a borrower is typically transferred to once their introductory period comes to an end.

As of January, this year, the average landlord slipping onto their lenders SVR after the initial two-year fix. They faced an extra £2,100 a year in interest payments, equating to £175 a month.

A mortgage for an expat landlord is likely to be the most expensive monthly commitment and therefore vitally important to be cost effective.

If you are confused with the mortgage plan you have do get independent advice as soon as possible. Failure to do so could be costing you thousands.

Expats are using an independent broker more and more.

Expats are now using an independent broker more than ever before to secure their deals whether it be a new or re-mortgage.

A survey showed using a broker will reduce completion times. They are fully versed in the expat mortgage process and able to react to the lender’s requirements much quicker.

Why independent?

Very simple you will have a much bigger choice of deals as an independent is not tied to any one company.

Help required?

Finally If you would like to discuss your current mortgage or require a new or re-mortgage, please do make contact. One of our qualified independent advisers will be happy to assist.

I need an expat mortgage. Who needs an expat mortgage?

Firstly 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. Also perhaps to provide an income in retirement or even to live in upon their return. Expat holiday buy-to-lets are getting more profitable.

The rise in stay-cationing has fuelled an increase the use of properties as holiday lets. Expats are attracted by the potential returns and keen to diversify their portfolios. Existing expat buy-to-let landlords are expanding their portfolios into holiday let. As are would-be investors who dream of owning a holiday cottage that will pay for itself.
The result, lenders have witnessed a rise in mortgages for holiday let mortgages. Loans for properties that will be rented out on a short-term basis, for at least part of the year to tourists as a business.

Exchange rates when I need an expat mortgage.

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. Also 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. As such using a specialist expat broker will without doubt give you the edge. Brokers are experienced in this type of mortgage process.

Can we help?

Finally if you are looking for an expat new or re-mortgage, please do make contact. One of our fully qualified independent advisers will be happy to assist.

Can I get a better expat mortgage rate? Expats are advised to check their current mortgage deal!!

Firstly if you are one of the thousands of expats who have not re-mortgaged you may get a better rate. If you are still on a standard variable rate deal now is the time to review your circumstances. If the predictions are correct interest rates are due to rise early in the 2025 with further rises on the horizon.

Re-mortgaging numbers in particular have been rising month on month and continue to do so. So, can I get a better mortgage rate? Quite simply yes. Expats have recognised that interest rates could be due to increase in 2025. Many have already taken advantage of the fixed rate deals that are available.

The wise expat will move to re-mortgage now sooner rather than later.

Good news is there are still some very good fixed and discount deals on offer, but it’s likely they won’t be around for much longer.

Fixing the rate cheaper than betting against rate rises?

Fixed rate expat mortgages are now proving to be better value than the tracker type plans, particularly for lower loan-to-value borrowers. Low loan-to-value mortgages are now proving better value than their tracker equivalents at 2-, 3- and 5-year periods.

Even for fixed rate higher loan-to-value mortgages, the current cost of borrowing is only marginally higher than tracker products. Fixed rate plans are without doubt becoming more popular especially with the investor with multiple properties.

Note, usually the larger the deposit you have the better the deal, but there are still some very good deals available for expats with smaller deposits.

Due to the range of products available and your current/future plans it is important to get professional independent advice.

Independent brokers

It also emerged the number of expat borrowers using an independent broker to re-mortgage has also hit a record high in 2024 and this year continues in that vein.

Can we help?

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