Expat mortgage activity sees record high applications

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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.

 

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Expat buy-to-lets are increasing all the time

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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.

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Weaker pound encourages expats

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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.

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Expat surge in re-mortgaging shows signs of Instability

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Re-mortgaging has reached record levels and now accounts for 41.5% of all expat mortgages conducted according to recent research.

The proportion of expat re-mortgages has risen by nearly 13% over the last 12 months, as homeowners are increasingly switching mortgage companies to find more attractive rates.

The promise of increased interest rates has no doubt helped drive demand for re-mortgaging. More and more expats are re-mortgaging to save money but also raise capital which is locked in their properties.

Many expat homeowners and landlords who have been saddled with lenders on less than competitive interest rates or stuck on higher standard variable rates are switching to more attractive fixed term deals. Rising property prices has also had an impact on re-mortgage growth, especially in the Southeast of the UK.

It is expected the demand for re-mortgaging will continue to rise in 2022, especially if there are rate rises. There is likely to be a shift towards more consumers considering fixed rate deals as the risk of rate rises remain for the time being. Expat buy-to-let re-mortgaging has also risen and now represents 12.8% of all mortgages, up by 6% year on year.

As a general overview, if you are an expat and not locked into a penalty mortgage deal good advice would be to review it with a view to saving money.

Can we assist?

If you would like a new or re-mortgage, please do make contact and one of our fully trained independent advisers will be happy to help.

 

 

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Expats please take note

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Any Expats due to re-mortgage are being urged to take advantage of current low rates as soon as possible because the forecasts suggest mortgage rates will begin rising as soon as next year.

The figures from the Office for Budget Responsibility (OBR) were discovered in documents, released last week, providing more detail on the Budget which was delivered by Chancellor Rishi Sunak.

The public body, which provides independent forecasts on finance and the economy, said it expected mortgage interest costs to begin rising next year before hitting a 13% increase in 2023.

The figures showed Expat UK homeowners needed to be braced for a big leap in mortgage costs to 14% in the first three months of 2023. This would then climb to 14.8% in the second quarter, before dropping to 10.5% by the end of the year.

Why?

The reason for the rise is down to the Bank of England base rate, which is looking set to start climbing from its 0.1% low very soon.

Expat UK homeowners need to be aware that it’s a case of if, not when, for an interest rate rise now and the clock is ticking on the record low mortgage rates we’ve all become accustomed to.

Expats on a fixed-rate deal now could face much higher rates when they come to re-mortgage in the coming years.

Any Expat who signed up to a two-year fixed rate deal earlier this year, nabbing a record low rate, will face a stark rise when they come to re-mortgage in the first half of 2023.

In a consistently increasing rates environment, the longer you fix the longer you can lock in today’s low rates. However, homeowners need to be careful when thinking about any long-term fixes.

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Expat UK property owners see good increases 

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UK house prices rose by 1.7% in September, equating to an increase of £4,400 to the value of the average property, according to the latest Halifax House Price Index.

This means that UK house prices are now at a record high of £267,500.

This month-on-month rise is the strongest increase since February 2007 and ups year-on-year house price inflation up to 7.4%.

This also reversed the recent three-month downward trend in annual growth, which had peaked at an annual rate of 9.6% in May.

Wales continued to record the strongest house price inflation of any UK region or nation, with annual growth of 11.5% in September (average house price of £194,286).

Scotland also continues to outperform the UK national average, with growth of 8.3% (average house price of £188,525).

The Southwest remained the strongest performing region in England, with annual house price growth of 9.7% (average house price of £276,226).

The Northwest saw the next biggest increase, with house prices up by 9% year-on-year (average house price of £201,927), marginally ahead of Yorkshire and Humber at 8.9% (average house price of £186,815).

The weakest performing regions in terms of annual house price inflation are all to be found in the South and East of England, though these are also the areas with the highest average house prices.

Eastern England has seen annual growth of 7.2% (average house price of £310,664) while in the Southeast it is 7% (average house price of £360,795).

Greater London remains the outlier, with annual growth of just 1% (average house price of £510,515) and was again the only region or nation to record a fall in house prices over the latest rolling three-monthly period (0.1%).

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Expat mortgage applications are on the increase

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The last 9 months has seen a significant increase in expat applications and approved mortgages against figures just issued for 2020. The increase shows how restrictions are being lifted as expat lenders compete for every single bit of business, this coupled with lower interest rates in real terms is indeed good news for the expat property investor.

Lenders continue to hold down rates, this is giving the borrower more confidence as the future looks bright even if small rises in interest rates are imminent..

Appropriate for expats with a current mortgage to re-mortgage?

Interest rates are most certainly in the borrower’s favour at present but there is always a lot of debate of how long these rates will last. All of this in mind it could be a very shrewd move to consider your own mortgage position. It is very commonplace for expat clients with a mortgage to just leave it as they are not aware of the savings that could be achieved with a re-mortgage.

There are many pros and cons to re-mortgaging all aspects need to be very carefully considered. It is not always best advice to re-mortgage to save money in the short term so please be sure to contact a professional independent adviser, they will give you an unbiased opinion of your situation.

If the time is right to change your current deal you might like to re-structure the borrowing you have in total. Mortgages offer much lower interest rates than store or credit cards, so equity in the property could be used to address this, again this is NOT always best advice.

Like to know more?

Please feel free to contact one of our expert independent advisers for any assistance you may require. We look forward to being of assistance to you soon.

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Expats look to lock in deals for financial stability

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Eight in 10 expat borrowers searching for mortgages in August were looking at fixed-rate deals, according to new analysis.

Fixed-rate mortgages are, as the name suggests, deals in which the interest rate remains the same for the term of the deal. Borrowers can choose deals in which they fix their rate for two, five-years or even 10 years.

While 80.1% were searching for the availability of fixed-rate deals, just under 20% were looking for variable rates – which offer interest rates based on external factors, such as the Bank of England base rate.

Currently the Bank of England has set rates at a low of 0.1% but there are some fears this could be increased, particularly as inflation is currently high.

Moneyfacts said in these times of economic uncertainty, it would seem the majority of borrowers had decided it would be easier to budget by protecting themselves from future interest rate volatility in the shelter of a fixed deal.

The data demonstrated a vast majority of potential new mortgage holders may be more risk-averse in the current economic climate.

Nearly 87% of the deals in the ‘fixed rate’ mortgage market were two or five-year products. Meanwhile, a third of borrowers were looking for a two-year deal whilst just over a quarter were searching for a five-year deal.

Longer term financial stability may also be in the forefront of consumers’ minds as the economy moves forwards.

Like to know more?

If you require help with your new or re-mortgage please do contact one of our fully qualified independent advisers who will be happy to assist.

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Expats are seeking UK property

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Overseas buyers and expats are sizing up the UK property market for potential bargains, taking advantage of the weak pound and the political uncertainty over Brexit which continues, according to the latest figures released

The property portal found that searches for UK property by overseas buyers have grown steadily this year. They now account for 6.2% of all activity on the portal in the first three months of this year, compared to just 3.6% three years ago, an increase of 72%.

It said some investors are keen to capitalise on softening prices and a weak pound and are looking for discounts. This could fuel demand for UK property, alongside expats planning a return to the UK amid uncertainty.

Areas with the most interest

London is in strong demand as the third most sought-after location, but the UK’s regional cities could benefit the most from interest from overseas buyers, with Glasgow and Birmingham the most popular search locations, followed by Manchester and Leicester.

Greatest interest is from?

US house hunters are watching the market most closely, accounting for nearly 50,000 searches in the third quarter of this year, as shown by the list below of the top 3 countries/areas where buyers are searching from:

  1. USA
  2. France
  3. Asia

Owning property in the UK is a goal of many overseas property investors including expats, it’s clear a rise in the proportion of searches for UK property which are taking place overseas since June 2018.

Can we assist you?

If you are looking for a new or re-mortgage do get in contact and one of our qualified independent advisers will be happy to help.

 

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Question – I’m an Expat can I get a mortgage on a UK property?

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Scenario

I want to get a residential mortgage and have a deposit of about £75,000. I am self-employed, a UK resident and earn – and pay tax on – all of my earnings in the UK.

However, I am currently in Asia and am mostly paid by US-based organisations.

Is there any hope for me?

Answer

It is perfectly possible for you to get a mortgage while working abroad.

You just need to use a mortgage adviser who is familiar with what are called expat mortgages. These are mortgages for UK nationals who, like you, are working abroad but want to buy property in the UK, whether it’s on a residential or buy-to-let basis.

UK expats do find it harder to get a mortgage than Britons on the mainland. Harder, yes, but not impossible, especially when you use a specialist expat broker who knows which lenders are likely to lend to you and which will do so on the best terms for your personal circumstances.

A specialist should be able to help with interest-only mortgages, financing for the self-employed, buy to let, unusually constructed properties and unusual mortgage terms.

Like to know more?

If you require help with your new or re-mortgage please do contact one of our fully qualified independent advisers who will be happy to assist.