A recent report has shown a large increase in expat buy-to-let business, figures show expats are increasing their portfolios as quickly as they can. This year has seen a surge of first time buy-to-let applications.

A new survey shows more than 50% of existing expat landlords are looking to increase their portfolios as they see particularly good profits in the long term. Brexit may be playing a part in expats thinking as well.

At this present time all is in the favour of the landlord with low mortgage interest rates and stable rental incomes.  It has become much easier in the last 12 months for expats to be able to secure a mortgage if the required deposit levels are available.

Lenders are without doubt seeing this marketplace as a growth area and more and more deals are becoming available on a daily basis. If you are thinking of going into this area of investment call us and we will be pleased to talk over your options.

Buy to let mortgages

UK and expat landlords are reaping rewards from lower mortgage charges and longer fixed rate deals. We always recommend talking to a professional independent adviser as some deals are not quite what they seem.

Competition in the marketplace is forcing lenders to reduce charges and fees as well as offering longer fixed rate deals.

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If we can help with your new mortgage please call one of our fully experienced independent advisers, we are here to help!

Mortgages with five-year fixed rates have undergone a surge in popularity within the expat community, nearly half of the completed deals recently have been for 5 years or more.

Mortgage brokers think the fact the Bank of England base rate is currently low, coupled with fears over future rate rises, is main driver behind the soaring popularity of five-year deals, which allow customers to lock into a specified rate for a longer term.

Potential pitfalls of five-year deals

While they provide a certain amount of security, five-year fixes aren’t necessarily for everyone. Indeed, several of those questioned in the survey of 200 mortgage intermediaries raised concerns.

They stressed that products with a longer term initial fixed period might only be suitable for customers who expected to retain their current property for an extended period. This was because Expats considering a house sale might have to pay early redemption penalties which could outweigh the benefits of a longer-term deal.

Low interest rates, economic uncertainty around Brexit and now Covid-19, a reduction in home-mover transactions and more re-mortgaging means that five-year products have become a viable option for a much larger proportion of Expats but do get advice before proceeding.

Outlook

Going forward, the brokers questioned, did not see any reason for five-year fixed rates to fall out of favour. Brexit and now the Coronavirus could well keep interest rates stable for the time being.

In need of some guidance?

Can we be of assistance with your new mortgage/re-mortgage we have fully qualified independent advisers waiting to help you.

The market so far has been largely unmoved by Brexit and now the Covid-19 pandemic. Lenders have continued to drop interest rates across the board since last summer which indicates a lack of concern currently.

There seems to still be a large appetite for banks to lend. The rates are extremely competitive and there are still plenty of high loan-to-value mortgages available to expat consumers.

If you are an expat with a mortgaged property in the UK now is a great time to lock in a new deal for the next few years and make the most of the low rates on offer.

Expats re-mortgaging for value

Expat re-mortgaging levels have soared to an eight-year high in last 3 months as borrowers take advantage of lower monthly repayments the latest figures have revealed.

The value of re-mortgaging fell due to a drop in the average loan size, but with overall mortgage activity down it still accounted for two-fifths of total lending in the last 3 months.

Expat borrowing activity has been fuelled by the lower rates on offer, rates currently are the lowest they have been for the last 7 years.

Expats who have not reviewed their current mortgage deal recently would be well advised to do so as rates are expected to rise in the future.

Help required?

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

Almost five million Britons live or work outside the UK and many of them don’t want to give up property ownership in the UK. Over the past 10 years expat mortgages have grown in stature as more Brits see owning a property in the UK as a very good long-term investment.

It’s no secret that most European properties do not give the sort of investment returns that one in the UK does, so it’s little wonder expats look to secure property in their homeland.

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.

Value for money

The UK property market still offers really good value for money if you own a property or can afford to buy one. Anybody who has owned a property in a good area of the UK over the last 10 years would have seen their investment grow substantially.

Traditionally the UK property market has always offered good value long term investment potential and there is no reason to believe this will not continue long into the future. The only unknown factor is what will happen after Brexit has concluded and how any deal will affect the housing market.

Mortgage advice?

If you need assistance with a mortgage then call our expert independent advisers who are waiting to help.

The stamp duty cut announced in the recent budget will also apply to those buying second homes and buy-to-let properties.

Government documents published following the Chancellor’s speech state that the tax relief for properties worth up to £500,000 will apply for those buying a first or subsequent property.

However, the 3% surcharge for buying additional properties will apply in addition to the new standard rates.

Therefore, for purchases in addition to a first home, just 3% will be paid for properties valued at up to £500,000, as opposed to the 5% paid before the adjustment.

After that, rates will apply as follows:

The relief will also be applicable for properties to which inheritance tax applies.

The government says: Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15 per cent SDLT charge.

Can we help?

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