Figures very pleasing for expat property owners

House prices in the three months to April were 5% higher than in the same three months a year earlier, a robust and surprise increase in a market that had been considered muted.

The average UK house price now stands at £236,619.

On a monthly basis house prices were up by 1.1% in April, compared to a fall of 1.3% in March.

Are buyers throwing off the Brexit shackles, or is the recent volatility in the monthly data indicative of something else?

Skewing the figures

This month’s figures were driven by a higher volume of London sales and more expensive new build properties.

In a market where stock and overall transactions are lower, any change within the make-up of the data can have a disproportionate effect and skew the figures.

The index has already come under scrutiny this year after months of erratic monthly growth figures. These can be sprightlier than the smoothed annual and quarterly numbers, but even so, they’ve been turning heads with the extremes with which they have been moving.

By this measure for April, the housing market is still comfortably making money for homeowners in real terms.

One explanation for ricocheting growth figures like this is persistently low stock levels. In sought after areas, this can lead to demand being supercharged one minute and gone the next, with price rises coming in waves as brief competitions for limited numbers of homes come and go.

Long-term growth

What is reliable is the longer-term growth trend. It’s now 10 years since the lowest point of the house price index in the wake of the financial crisis in April 2009 – and average prices have bounced back. Over the past decade annual house price growth has seen the average price increase by £81,956, or an average rise of 4.3% each year.

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.

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.

Data revealed 49% of expats are now choosing an initial fixed rate period of five years compared to only 25% back in 2013.

Meanwhile, mortgages with rates fixed for two years have experienced a plunge in popularity with 37% of customers choosing the shorter-term fixes compared to more than half in 2013.

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 suitable for customers who expected to stay in their current home for an extended period. This was because anyone considering a house move might have to pay early redemption penalties which could outweigh the benefits of a longer-term deal.

Low interest rates, economic uncertainty around Brexit, 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 customers.

Outlook

Going forward, the brokers questioned, did not see any reason for five-year fixed rates to fall out of favour.

However, many said a stable economic climate post Brexit, which could lead to an interest rate rise, was the most likely cause of any reduction in the attractiveness of the five-year fix.

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.

Mortgage rates are unlikely to improve in the near future so now is the ideal time for borrowers to secure a fixed-rate deal on their mortgage. Borrowers who are on a standard variable rate (SVR) or coming to the end of their term have the potential to save themselves thousands of pounds on their mortgage

The savings can be substantial and could easily pay for home improvements or that much longed-for family holiday.

The near all-time low rates will not last forever, the wise expat should look to secure a deal and speak to an independent broker straight away.

Independent brokers

Not only can brokers offer a far wider range of products and options for consumers which they may otherwise not have access to, or the time to find, but their invaluable expertise will be able to help you secure a great deal on your mortgage.

What does a mortgage broker do for expats?

Essentially, they are there to help expats find the best mortgage deals in the UK. They aim to make that as simple and stress-free as possible, looking at each person’s situation and finding the best product to match their needs.

The mortgage product minefield

There are many expat residential and buy-to-let mortgage products currently available in the UK. This number is increasing every year, highlighting the sheer number of options out there. That is a big minefield to navigate if someone wants to investigate all of those without help. Combine all those options with infinitely-varied personal and income circumstances, plus the variety of property types and how they can impact a buyer’s options… the value of obtaining correct advice has never been higher.

Need assistance

If you are an expat looking to secure a mortgage in the UK, please do make contact and one of our qualified independent advisers will be pleased to help.

EOverseas 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 since before the EU referendum. 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 over their rights, pensions and healthcare.

Where are they looking?

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.

Below are the top 5 most popular UK locations with overseas buyers:

1. Glasgow
2. Birmingham
3. London
4. Manchester
5. Leicester

Who is looking?

US house hunters are watching the market most closely, accounting for nearly 50,000 searches in the first 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 2016. Foreign buyers view the impact of Brexit chaos on house prices and the value of sterling as a rare opportunity to buy into the market at favourable prices, with a long-term view.

Uncertainty over the rights of British expats living in Europe as well as access to healthcare and pensions, is also likely to be prompting many expats to consider a return to the UK, driving demand for property.

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.

EMore expats with mortgages on UK properties are looking to lock in a longer fixed deal than ever before. Experts believe this situation has been brought about due to the Brexit uncertainty and what could happen to the mortgage market.

Popularity of longer-term deals had waned at the start of 2018 with expat borrowers opting to fix their mortgage for two years, according to the latest figures.

In the later part of last year demand for five-year fixed-rate re-mortgages went up 40%, representing half the market according to the report.

Lenders are eager to attract longer-term business which has created a competitive landscape for expats. This has ensured five-year average rates have remained relatively flat month-on-month.

Five-year fixed deals tend to be more popular amongst borrowers who are seeking stability. Expats will be opting for these deals to provide some certainty amid the potential economic and political upheavals in the next few years due to Brexit.

Currently over 77% of expats re-mortgaging expect a rise in the Bank of England (BoE) base rate this year. This compares to 35% in April 2017.

After hints of a rate increase earlier in the year, sluggish economic growth discouraged the BoE from raising the base rate. Yet more than three quarters of borrowers still believe another base rate increase will happen at some point in the next twelve months.

Independent brokers

It also emerged the number of expat borrowers using an independent broker to re-mortgage has also hit a record high in November increasing from 60% in March this year to 84%.

Can we help?

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