Expat mortgage approvals rising fast

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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.

 

Very good news for expat UK property owners

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UK house prices hit a new record high last month as they saw the biggest monthly rise since August last year, new figures show. The average price of a UK property rose by 1.5% in March compared to February to hit £228,000 – the highest figure on record.

Prices in the first three months of 2018 were down by 0.1% compared to the previous quarter – the second consecutive quarterly decline.

Price growth and activity levels in general had softened compared with a year ago.

The annual pace of growth accelerated to 2.8% from 1.85% in February – but is down from 3.8% in March last year.

House prices in the three months to March were largely unchanged compared with the previous quarter. The annual rate of growth continues to be in a narrow range of under 3%; though the average price of £228,000 is a new high. House sales stalled at the beginning of 2018 and mortgage approvals were down on last year, with activity remaining very subdued.

In the coming months it is expected that price growth will remain close to the expert’s prediction of 3% despite the very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale will also support price growth.

In many respects, a report suggesting that house price growth is mainly unchanged represents a “no news is good news” result for the property market, as given the current challenges of low available stock levels, impending interest rate increases and ongoing Brexit uncertainty.

Mortgage help?

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

 

Expat lending still rising and will continue to do so

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Expat mortgage lending is forecast to reach the highest level since the financial crash of 2007 despite Brexit uncertainties, according to the latest annual market review.

If all the predictions are correct, 2018 will see the eighth year of expat mortgage lending growth.

A great deal of this growth will be driven by re-mortgage activity, figures would suggest the expat has become a great deal wiser of late and making the most of lower interest rates.

Expats buy-to-let lending looks like recovering in 2018 and 2019 despite the adverse tax changes for landlords. Again, this growth is likely to be driven by a strong re-mortgage market and an improvement in house purchase lending brought about by a higher level of “churning” in the market.

Lending via intermediaries/brokers is also expected to increase again as expats look for help in securing their mortgages. Broker activity has grown rapidly over the last 3 years as tighter lending rules have come into force.

The forecasts are based on an analysis of current trends within the housing market.

Despite the recovery of the housing market and the availability of mortgage finance since the last recession, stricter affordability rules are limiting activity which makes the figures and predictions even more promising.

UK property values in 2018

According to the latest figures house prices are still on the rise, January and February saw an average 2.3% increase (except London) as the UK economy continues to strengthen even with the Brexit situation.

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.

Is the future bright for UK property?

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Expats with UK property holdings will be encouraged by the recent predictions various experts have expressed on the UK housing market. This is the predicted general outlook for 2018 and beyond but who knows how accurate this will be with the Brexit situation. It would seem a deal is close, and this could have a very positive slant on the predictions.

2017 saw annual house price inflation slow down considerably from the previous 5 years but increases were good and stable.

House prices could rise by 2-5% this year as the number of transactions stabilise – that is the prediction from various prominent Chartered Surveyors.

Property values will rise in each region of the UK this year, with East Anglia, the North West and West Midlands recording higher gains than the national average. Central London is likely to stabilise after recent declines, with support provided by the much weaker exchange rate encouraging foreign buyers.

Although recent announcements by the Government on housing are very welcome, the ongoing shortfall of stock across much of the sales and lettings markets is set to continue to underpin prices and rents.

Meanwhile the lack of existing inventory in the market is impacting the ability of households to move home and will contribute toward transaction activity over the whole of 2018.

Summing up the findings, generally the outlook for expat UK property owner seems bright and will still represents a sound long-term investment.

Can we help?

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

Expat business is very brisk

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Business in the expat sector continues to increase year on year, even with all the recent Brexit news and negativity. One expat we spoke to said, “the spare cash I had left over has been invested in a UK property as leaving it in the bank was not an option due to the interest rates on offer”. “I now let the property which gives me a little income after tax and interest payments, but mainly I am interested in the increased property value”. “Currently if I was to achieve the full sale price I will have made a very good profit on the deal even after any capital gains taxation due”.

Expats have an excellent choice of mortgage deals available and there should be one to suit most needs. It is vital when you are taking out a mortgage that you ensure the deal you are getting is right for you, it is recommended to seek specialist expat broker advice as this is a complex market.

Why use an expat specialist broker?

There’s an awful lot to think about when choosing the right mortgage. It’s not as simple as just opting for the cheapest fixed or tracker rate mortgage you can find.

Mortgage brokers must be qualified to give you mortgage advice, whereas you may not get that kind of guarantee if you ring up a lender’s call centre.

On your side

An independent mortgage broker will look for the best mortgage for you. They aren’t on the lender’s side, they’re on yours, and they’ll give you access to far more products than if you went direct. You’d get unbiased advice and would be able to choose from a range of lenders and subsequent products.

Need some assistance?

If you require any help with your mortgage or re-mortgage, please call one of our fully qualified advisers and we will be pleased to assist.

Expats set re-mortgaging record

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It seems that expat homeowners have taken our frequent warnings about upcoming mortgage rate rises to heart, as January and February saw a record number of re-mortgages completed. This month is the highest number of re-mortgages since October 2008. January’s figure also marks an increase of 21.3% year-on-year and an impressive monthly increase of 53%.

While an increase in re-mortgaging is expected in the New Year as homeowners put their household finances in order, this strong growth is above the seasonal fluctuations you normally see at this time of year.

This increase is also partly due to a number of fixed rate mortgages coming to an end while borrowers locked into attractive deals amid expectations of further interest rate rises a few years ago. Given that standard variable rates have been moving upwards, it’s hardly surprising that expat borrowers coming to the end of a fixed rate deal will look to re-mortgage rather than see their monthly repayments go up considerably. But it’s not only re-mortgagors that were active in January and February.

Expat first timers

The number of new expat first-time buyers also increased in the last quarter which is somewhat surprising given the Brexit negotiations. It would seem expats want to get a foot on the ladder in the UK so to speak perhaps as a backup.

Even with the general slow down in property prices the UK still represents good long term potential growth.

Mortgages

Expats currently have an excellent choice of new and re-mortgages available at advantageous rates, best advice is to act sooner rather than later as these rates are expected to increase.

Can we help?

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

Expats and UK property after Brexit?

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The triggering of Article 50 has been well telegraphed, so for the housing market, it’s more about how the subsequent negotiations go. To date we are all getting very mixed messages as to the general outcome of the talks. One thing is very clear, the expats living overseas currently are not panicking in the slightest as expat mortgage business is very buoyant indeed.

A recent poll taken of expats found that 72% have no concerns as to the outcome of the Brexit negotiations. The poll also revealed expat UK property owners are confident their UK holdings will be generally unaffected by Brexit.

What about the mortgage market?

The market so far has been largely unmoved by Brexit. Lenders have continued to maintain good interest rates across the board since last summer which indicates a lack of concern currently. The rates are very competitive and there are still plenty of high loan-to-value mortgages available to expat consumers.

UK property values after Brexit

The property market in the UK is currently slowing down compared to a few years ago, but it must be said values are still increasing albeit at a slower rate. If you are an expat who has invested or looking to invest in the UK property market you can draw strength from the historical figures. It is very unlikely in the next 20 years we will see things change drastically due to the demand still being as strong as ever for quality UK property.

The way forward

As an expat living overseas with property and a mortgage in the UK it would be very advisable to get your current mortgage checked to ensure it will meet the ongoing needs.

Assistance?

If you would like to discuss your mortgage requirements, please do make contact and one of our qualified advisers will be happy to help.

Expats lending on an upward trend

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March’s gross mortgage lending to expats has increased by 4.8% from last month, this is the fourth month on the run. In addition to the month on month increases lending this year has increased 14% 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.

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 very 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 2018 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.

Expats and buy-to-lets

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The reduction in buy-to-let mortgage tax relief may cause more people to emigrate abroad and invest in UK buy-to-let from overseas.

Those lenders not already operating in the expat marketplace will have to start thinking about tapping into it because of more people leaving the UK and becoming expats than ever before. With the Brexit situation, people are realizing there’s a big world out there and they can experience more cultures.

If you are already an expat there’s genuinely never been a better time to take out mortgage finance. The mortgage tax relief changes, phased in over four years, mean 75% of finance costs are deductible from rental income from 2017 to 2018. The year after it will be 50%, the year after that 25% and from 2020 none.

Expats can earn a certain amount in the UK before paying tax and property purchasing may not take them over that amount, meaning they wouldn’t be affected by these tax changes.

The expat current marketplace lenders are more cautious when lending, always looking at affordability and there’s more underwriting as well. This should not deter the long-term expat investor as the rewards can be very worthwhile. Using a UK based broker will without doubt help reduce the administration as they are fully experienced on what will be required.

The expat marketplace for lenders is as competitive as ever and new entrants are likely as Brexit presses on. Expats currently have an excellent choice of new or re-mortgage buy-to-let products.

Can we help?

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

Base rate on hold

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Expats with a mortgage in the UK will be pleased with this news.

The Bank of England has kept its base rate on hold, but a May rise is still widely predicted

The Bank of England’s Monetary Policy Committee (MPC) has voted by a majority of 7-2 to maintain Bank Rate at 0.5%.

Following an increase from 0.25% in November 2017, the Bank Rate has been held at its current 0.5%.

But it may not stay that way for long – with many experts predicting an increase in interest rates in May.

The Bank’s own report admitted that an ongoing tightening of monetary policy over the forecast period will be appropriate to return inflation sustainably to its target. Inflation is currently 2.7%, against a 2% target.

The MPC added that “all members agree that any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent”.

How this may affect borrowers

If the Bank of England does hike rates in the coming months, expat borrowers could see their monthly mortgage repayments rise.

The Bank of England may have opted to sit tight now, but it’s likely that they’ll lift rates in the next couple of months. This would impact all consumers, but particularly homeowners who’ll see mortgage rates rise to their highest level in a decade.

Good advice for expats

If you have a mortgage on a property in the UK it would be sound advice to get it reviewed as soon as possible. If all the predictions are correct switching to a fixed deal if you have no redemption penalties could save you a lot of money in the future.

Can we help?

If you are looking for a new or wish to review your current mortgage, please do make contact and one of our advisers will be happy to assist.