Political uncertainty in Hong Kong is one of the factors driving an increase in enquiries from non-UK residents.

Data showed ‘visas’ was the most searched for term by advisers in the last week of July, and searches for ‘non-UK residents’ were also on the rise.

The tool, which helps advisers determine whether a particular lender might consider an application from their client, also showed buy-to-let searches for applicants on a visa had also risen by 146%. This has been since the announcement of a 2% stamp duty surcharge for overseas buyers, which will come in effect in April 2021. But the stamp duty holiday, announced by the chancellor last month, was also cited as one of the other reasons for the interest from overseas buyers.

Hong Kong buyers

The rise in visa-related enquiries coincides with increased interest from Hong Kong-based buyers as they turn their attention to the UK housing market amidst growing political uncertainty in the territory.

Recent industry data revealed a surge in demand from Hong Kong-based buyers. It said this was likely to grow further following the government’s announcement on 22nd July of a new route to citizenship for 300,000 British National Overseas (BNO) passport holders.

Britain’s housing market is bucking the trend and has faced unprecedented levels of demand since reopening in May, and now figures show that a growing number of overseas buyers are also taking a very keen interest in UK property.”

Lending criteria is changing every day in the mortgage market at the moment, and advisers will be key in helping borrowers and others to cut through the red tape and find the best product for their particular circumstances.

Can we help?

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

There is little doubt within the expat mortgage market that this year is the year of the expat re-mortgage. You only need look at the rates being offered by lenders – particularly in the lower Loan to Value (LTV) bands. The rates currently on offer are not going to stay this low for much longer so if you are an expat and have a current variable rate mortgage review it sooner rather than later.

Research confirms that over 50% of all expat borrowers who move to their lender’s standard variable rate after their initial deal terminates do not re-mortgage or product transfer for 3-5 years.

Also the report shows a quarter of re-mortgagors said they find the whole re-mortgage process difficult, with 47% saying they didn’t have time to shop around.

The “shopping around” mentality is clearly far more embedded in the UK consumer than ever before; however this doesn’t always translate to mortgage borrowers, even when the savings that can be achieved are substantial.

Expats need to get the message that re-mortgaging is where significant savings can be made – especially with rates as they are now. Rates are unlikely to remain this low for much longer so acting now could save thousand in the future. If you are an expat on a standard rate mortgage would you like to save upwards of £2300 PER YEAR? These savings are of course dependent on the size of mortgage you have but surely it is worth checking.

Warning – A re-mortgage is not always suitable for everybody as your existing deal may well have penalties attached to change within the discounted period. It is always recommended to seek professional help as to what is best advice to suit your needs.

Can we help?

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

March 2020 gross mortgage lending to expats has increased by 5.1% from the month before, this is the fourth month on the run. In addition to the month on month increases lending this year has increased 16.2% overall.

Experts believe these strong figures are down to the Brexit negotiations progressing albeit slowly but positively. There is definitely less confidence in the property values of other European countries. Property continues to gain value in the UK at a steady rate and looks like continuing for the foreseeable future unlike the rest of Europe. Covid-19 has had an effect on the market but the majority of experts believe this will be very short lived.

One other factor that has contributed to this robust growth is the number of re-mortgages completed. Both expats and UK residents are living in the fear that interest rates are about to jump. These fears are justified as already a good many long-term fixed rate deals have been withdrawn from the market but there are still some extremely attractive deals on offer.

UK property offers stability

The UK property market without doubt still offers 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.

It is expected that house price increases will level out as the year goes on with a steady and reliable growth rate, again spelling good news all round.

At present the outlook for 2020 and beyond is very positive within the UK property market, the signs are this will continue for the foreseeable future.

To sum up – traditionally the UK property market has always offered excellent value long term investment potential and there is no reason to believe this won’t continue.

Mortgage advice?

If you are in need of assistance with a new or re-mortgage, then please contact our expert advisers who are waiting to help.

There has been a marked increase in the number of enquiries from expats into      buying-to-let in the UK a recent report has highlighted. This activity has increased since the UK left the EEC on 31^st January 2020.

The report from financial intermediaries revealed that 70% of respondents had seen a rise in enquiries from British expats about buy-to-let mortgages for UK property.

These findings reflect the growing demand for buy-to-let mortgages from overseas investors; due partly to the strength of foreign currency against the pound – attributed to the ‘Brexit effect’ – which has created an investment opportunity.

Following Brexit, the pound has weakened against most major currencies including the dollar and euro. Brits living in countries where the currency is pegged to the USA’s, such as Hong Kong have been attracted to investing in property back in their home country.

It was a concern for some that the new rules from the Prudential Regulation Authority (PRA) introduced early this year, which limited the amount expat landlords could borrow and tougher lending tests, would impact demand, but the report would suggest this hasn’t been the case.

What is happening is investors, including expats, are still buying-to-let in Britain, but perhaps focusing on lower loan-to-values and using larger deposits to take the various changes into account, as well as adapting their portfolios and business models to maintain their profitability: for example by looking at up-and-coming areas across the UK instead of the more traditional rental hotspots like London.

Given the strong rental market in the UK and interest rates at an historic low, it appears that expats are still keen to keep a foothold on their home property ladder, and whilst the buy-to-let market has faced a number of challenges recently, those taking a long-term view seem undeterred.

Like to talk over your needs?

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

Data released today for May revealed expat re-mortgages were up by 11% while refinancing with additional borrowing increased by 6.4%.

The spike in expat re-mortgaging has been attributed the uncertainty after the coronavirus struck fear into borrowers.

Future stability

It is not surprising that re-mortgaging numbers have increased, pressing home the message that expats simply want or have stability in uncertain market conditions generated by firstly Brexit then Covid-19.

Competition

Others thought the rise was also attributable to strong competition between lenders who were keen to attract business. Re-mortgaging is also consistent with borrowers opting for cheap fixed rates in the main.

Lenders are keen to lend and hardly a day goes by without another cutting its rates to attract business. Strong expat mortgage figures are mainly down to the re-mortgage market, with competition between lenders aiming to attract as much business as possible underpinning performance.

Expat buy-to-let

The data also provided further evidence of the challenges facing the expat buy-to-let market, with this area of lending being the only sector in which figures fell during May.
UK Finance revealed 3.5% fewer buy-to-let home purchases took place during May compared to the same month in 2019.

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