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Expats are choosing independent broker assistance for mortgages

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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.

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What mortgage type do you need as an Expat?

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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.

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Outlook steady despite all the uncertainty – Expats take comfort

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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.

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Expats need to get moving

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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.

 

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Expat mortgages

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As an expat whatever reasons you may have for considering purchasing a house or flat in the UK, the good news is that there are lenders who are more than willing to offer expats a mortgage. Many providers don’t even advertise the fact.

Brexit has not deterred expats from buying in the UK, in fact since the vote activity has increase by 13%.

The expat mortgage market is very complex, and you should seek professional advice as to what product best meets your needs.

Items you will need to apply

  • Deposit available
  • Certified proof of address
  • Certified ID (Passport)
  • Bank statements (Normally 6 months)
  • Wage slips (Normally 6 months)
  • Certified accounts if self-employed.

These requirements vary from lender to lender and the above is just to give you a guide to help speed up the process. Contact us for any assistance you may require.

Applications

Expat mortgage applications are currently at an all-time high and the outlook for 2021 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.

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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Expats are actively looking for 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, 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.

Popular areas

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.

Who is looking?

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 where buyers are searching from:

  1. USA
  2. Spain
  3. Ireland

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 advisers will be happy to help.

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Expats are defiantly taking note!

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There was a surge in re-mortgage activity in September and October of this year, as expat borrowers look to lock into cheap deals ahead of an expected interest rate rise.

Since the financial crisis in 2008 mortgage rates have steadily fallen.

However, with the Bank of England hinting that it could raise interest rates in the near future as Brexit fears take a grip, economists are predicting a hike could come as soon as January/February of next year.

Record low mortgage rates continue to sustain market activity, many of the Bank of England’s Monetary Policy Committee are now adding to the calls for an interest rate rise, this picture could very quickly change.

A “wait and see” approach is best avoided for existing expat UK homeowners considering re-mortgaging.

The number of expat mortgages approved also went up this year, suggesting the market is picking up steam before the Brexit outcome is decided..

Expats who avoid reviewing their current mortgage deal could well pay for this error in the long term as interest rates look to be going upwards. Not everybody will benefit from changing their mortgage, but it certainly makes sense to check how your existing deal stands up to the future.

Contact us.

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

 

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Expats want UK property

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Since the end of last year the expat mortgage market has seen much more activity in both new and re-mortgage applications.

The UK property market continues on an upward spiral albeit slower than years gone by and still offers potential longer-term growth and security.

Expats are always keen to secure property in the UK and this year is no exception as applications for new mortgages are at an all-time high. Most experts believe these high activity levels will remain until the Brexit deal is finalised, with all the uncertainty expats want a UK foothold.

Confidence in the UK market has grown again since the turn of the year due to interest rates still being held after the threat of increases.

What does the future hold in store?

This is a very difficult market to predict in the long term, but if the past is anything to go by then UK property will hold its own and increase in value. Whatever happens with the Brexit deal property values are more than likely to remain strong. There are several factors that control prices, the main ones are listed below:

  • Supply and demand currently supply only meets 38% of the demand.
  • Mortgage interest rates are low and affordable.

So looking at the key factors the housing market looks in good shape for the future. Of course situations can change very quickly, not to mention Brexit, but on the whole the UK property market looks to be in a very healthy state especially if the supply does not increase.

Mortgage help?

Should you require any assistance with your new or re-mortgage please do call one of our fully qualified independent consultants and we will be happy to assist.

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Expats, does your mortgage need reviewing before 01 January 2021?

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A former Bank of England Monetary Policy Committee member has predicted that interest rates could rise significantly in the next few years.

Inflation has now caught up with wage growth causing a sharp consumer slowdown and the weak pound has also squeezed consumers and the expectation is that households will adjust their spending downwards.

More and more expats are looking for ways to reduce their monthly outgoings. One of the biggest expenses most people have every month is their mortgage payment.  Keeping this in mind it would be a wise move to review your current mortgage to ensure you are on the best deal possible.

This will not be the case for everybody, your current deal may well be particularly good, but it is most certainly worth checking before the end of the year.

With all the uncertainty the Brexit situation is having on the UK currently a prudent move may be to fix a term for your current mortgage, this would take out all the uncertainty over that period.

It is highly recommended to seek professional independent advice as to what new deal could suit your current situation.

Reasons to re-mortgage

  • To save money.
  • Raise extra cash for a project you have planned.
  • Your current deal is ending soon
  • Transfer to a fixed medium/long term deal

Help required?

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

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Expats are using specialised brokers on a regular basis

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Expats looking for a mortgage or re-mortgage on a property in the UK now have a wider choice of loans than years gone by, so it makes sense to select the best one to suit your needs.

About five million UK nationals live overseas, and many are keen to hold on to a property in the UK, or to invest in a buy-to-let. As for a buy-to-let mortgage options are quite restricted – and in most cases you will need to get a specialist landlord mortgage.

It is possible to secure a standard residential home loan as an expat, but it is tricky to arrange, lenders will want to see evidence that close family are living in the house. Since most expats work abroad and cannot live in two places, for the majority, a buy-to-let is the more appropriate solution.

You will typically need to seek out a specialist lender and this is where the expat broker can assist you in making the correct choice and in turn save you time and money.

It can be a difficult process to secure a mortgage when clients are overseas, especially with the time difference and tighter lending criteria.

Another factor is the European Mortgage Credit Directive, introduced in 2016, which means individuals paid in a foreign currency now come under closer scrutiny when their loan applications are assessed. The underwriting process needs to take account of possible exchange-rate fluctuations, as well as looking at a borrower’s overall financial position.

What a broker will do for you?

The broker will take control of the mortgage process, therefore relieving you of the stress and paperwork. They will be able to deal with the mortgage company supplying the loan and answer any queries they may have, saving you time and money.

Help required?

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