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.

Aside from investors there are a great number of enquiries from individuals looking to buy properties for their families to live in – frequently where children are involved the preference is for them to be schooled in the UK.

These are just some of the reasons expats want to buy a UK property, one thing is for sure more and more expats want the security of property in their homeland.

UK property prices increasing

The latest figures show house prices are on the rise again, May and June saw growth although not like years gone by but still very encouraging.

It is expected that house price increases will level out over the next year with a steady but reliable growth rate, again spelling good news all round for expats looking to invest.

At present the outlook for 2018/19 is very positive indeed, the signs are this will continue for the foreseeable future.

Finding the mortgage to suit your needs

Securing an expat mortgage doesn’t have to be difficult, it is always recommended to get expert professional help. Using a specialist expat broker will without doubt give you the edge as they will be experienced in this type of mortgage process.

Can we help?

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

 

House prices have hit a fresh record high in the UK, but property inflation has slowed to its lowest level since March 2017, according to official figures.

The average house price was up 3.9% in the year to £227,000 in the year to April, the ONS revealed today.

London house prices staged a surprise bounce in the month, rising 2.4%, with annual property inflation in the capital returning to positive territory at 1%

As a further reflection of that, prices of flats and maisonettes have been weakest over the past year – rising by just 1.7% in the year to April, to £202,000.

Their weak prices were driven by “negative annual growth in London for this property type” the capital accounting for a quarter of all flat and maisonette sales in the UK.

While flats and maisonettes struggle to command higher prices, the average price of a semi-detached house increased by the most, at 5.4%, to £315,000.

The price of terraced homes rose by 4.7% to an average of £184,304, while detached homes were up 3.95% to £342,154.

Annual house price inflation has been slowing since mid-2016, and, with the exception of October 2017, has stayed firmly under the 5% mark.

Despite that the cost of the average home rose by £19,000 in the two years from April 2016 to the same month this year.

In England, average property prices grew by 3.7% to around £244,000, while Wales saw an increase of 4.4% to £156,000.

As a result, the increase in house prices is more to do with the lack of supply of appropriate property in places where people most want to live rather than a marked improvement in confidence.

Help required?

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

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

Greater competition from lenders keen to lure in borrowers for longer terms and rate rises on five-year deals increasing far less than those of the two-year options has caused a shift.

In April this year demand for five-year fixed-rate re-mortgages went up 40%, representing half the market according to the report. In March they made up just 28% of this market.

It also emerged the number of expat borrowers using an independent broker to re-mortgage has also hit a record high in April and May increasing from 72% in March to 84%.

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.

Can we help?

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

Expat UK homeowners are collectively wasting millions a year by failing to re-mortgage before their current deal expires.

A third of expats whose fixed rate or tracker mortgage ended in 2017 ended up on their lender’s standard variable rate (SVR) for an average of six weeks.

Their failure to line up a new mortgage before their existing one expired cost them an average of £750 a year.

Why is this happening?

When fixed term mortgages come to an end, expat homeowners are automatically put on to their lender’s SVR, also known as a reversion rate.

The interest charged on SVRs is typically significantly higher than the rates available on new deals, meaning expats end up paying over the odds for their home loan until they switch to a new mortgage.

While it is not known exactly why expats are sitting on an SVR it is likely to be because they have failed to realise their mortgage term is coming to an end or have not left enough time to switch to a new deal before it expires.

Does this affect you?

Expat UK homeowners should start thinking about a new mortgage three to four months before their current deal expires.

The re-mortgage process typically takes between six and eight weeks. It is usually quicker if people are taking out a new mortgage with their current lender, while things tend to take longer if they are moving to a new lender.

New mortgage affordability rules were introduced in April 2014, so homeowners coming off five-year fixed rate deals may find the application process tougher than when they last applied.

The good news is that most lenders will allow you to secure a new mortgage deal three months before your existing one expires, enabling people to start the re-mortgage process well before their current deal runs out.

Background

Seven out of ten expats who took out a mortgage in 2017 opted for a fixed rate deal.

Fixed rate mortgages give borrowers the security of knowing exactly what their monthly repayments will be.

Help required?

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

Approvals for house purchases in the UK by expats increased towards the end of 2017 and 2018 has followed the same pattern according to the latest figures from the Bank of England.

The number of expat loan approvals for purchasing so far this year is up a massive 21% on the same period last year. Re-mortgaging saw an astonishing increase of 41% over the same period.

The next few months are likely to be less active, but at present we can confirm business is very active with the buy-to-let market surprisingly leading the way. This activity seems to be powered by the Brexit ongoing negotiations with expats feeling they want a property in the UK more now than ever before.

Re-mortgaging in the expat market continues to be very buoyant as homeowners look to lock in advantageous interest rates which are still currently on offer. These rates are likely to disappear as the year progresses if the experts are correct as a rate rise is expected.

Why re-mortgage?

There are many reasons you may wish to consider a re-mortgage and it is without any doubt something every expat homeowner should consider, especially if you are stuck on your current lenders standard variable rate. It is not always best advice as your current deal may have conditions that are not beneficial to re-mortgaging, but you should take time to review on a regular basis. So why re-mortgage?

• Secure a better rate of interest than you are currently paying.
• Change current deal to a fixed rate for long term security.
• Raising capital from equity within your property.

Need assistance?

Our professional team of fully qualified advisers are used to dealing with all types of expat re-mortgage/mortgage business. Please do call to discuss your requirements and we will be happy to help.