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Who needs an expat mortgage and what are the typical reasons? 

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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.

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

Selecting a 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.

UK property prices increasing

According to the latest figures house prices are on the rise again, September and October saw good 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.

So, at present the outlook for 2022 is very positive indeed, the signs are this will continue for the foreseeable future.

Can we help?

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

 

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Expat ownership triples in 10 years

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The number of properties in England and Wales owned by foreign citizens has tripled from 88,000 in 2010 to nearly 250,000, according to new analysis by the Centre for Public Data.

Over 247,000 residential properties across England and Wales are now registered to individuals with an overseas correspondence address, nearly 1% of all registered titles compared to 0.4% in 2010.

The data was obtained from HM Land Registry on the number of property titles owned by individuals with an overseas correspondence address.

Three-quarters are registered to individuals with addresses in just 20 countries, with the main groups being the Crown dependencies and British Overseas Territories, namely Jersey, Guernsey, Isle of Man and the British Virgin Islands, and also more recently South-East Asia and the Middle East, and English-speaking countries.

This is borne out by the current statistics from Guernsey-licensed bank, Skipton International, which specialises in buy-to-let mortgages for non-UK residents.

At the end of October 2021, 35% of their mortgage pipeline was from Hong Kong residents, with Singapore and the UAE also featuring heavily.

The growth in interest in cities such as Newcastle, Manchester, Liverpool and Leeds has also been notable, particularly since 2016.

Skipton mortgage manager Lorraine McLean says: “The UK is viewed by many as a solid, stable jurisdiction and many global investors are looking to the UK residential market.

“In 2019 we extended our UK mortgage proposition to include applications from overseas non-UK nationals and we are now seeing interest from a range of nationalities resident in countries around the globe.”

 

Expat mortgage activity sees record high applications

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Expat first-time buyer activity reached a 2 year high at the end of October this year after soaring more than 40% on the same period in 2020. In October alone the expat mortgage industry saw an increase in applications for new mortgages rise by 38%. These figures go to prove that expat’s still see property in the UK as their number one investment, and it is little wonder when you see the growth the market has shown over the last 10 years.

The UK housing market keeps going from strength to strength even with the Brexit setbacks which now seem to be coming to a head. This growth is likely to continue due to the chronic shortage of quality homes for sale. If this continues to be the case in the future property prices will remain high and increase accordingly.

Estate agents around the country are reporting a high demand for low end quality properties with first-time expat buyers being very active.

The UK property market continues on an upward spiral and offers longer term growth and security. Mortgage lenders are still reducing interest rates to attract new business, so if you are contemplating investing now would seem a good time to buy in the UK.

There is little doubt the attractive mortgage interest rates currently on offer have played a key role in driving these figures. Expat borrowers have taken advantage of the current low rates and used a re-mortgage in particular to their benefit.

Can we assist you?

If you are looking for help with your new or re-mortgage please contact one of our fully qualified independent advisers and they will be happy to guide you.

 

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Expat buy-to-lets are increasing all the time

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There seems to be no stopping the buy-to-let expat market, applications for the first 6 months of this year were up again on this time last year. Expats seem to be determined to get a foothold in the UK property market and existing expat landlords are not shy to increase their portfolios either.

Even with all the new legislation including tax changes doesn’t seem to dampen expats enthusiasm for the buy-to-let market.

The general consensus of opinion is that UK property still offers good long-term potential. One expat landlord commented “our UK property returns a good rental income annually even with the new tax laws and the value since we bought it has increase by £51,000, so it’s not all bad”.

Buy-to-lets may well be in for a rocky ride over the next few years but the general feeling is that in the long-term potential is still very good.

Are good interest rates for expats still available on buy-to-lets?

Well, the simple answer to that is yes! if you have a sizable deposit then rates are even better. Mortgage lenders are currently fighting to secure your business in a very competitive marketplace.

We have seen an increase in longer term fixed rate mortgages recently as clients want to set their outgoings of their investment property. There is also talk of rate rises later this year so this route would seem a very sensible one to consider.

It is commonly known with buy-to-let mortgages the larger the deposit you can put down the better the deal that can be secured.

Need assistance?

Our professional independent advisers are used to dealing with all types of buy-to-let mortgages, they have vast experience in this area. Please do call to discuss your requirements and we will be happy to help.

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Weaker pound encourages expats

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New research reveals that expats and foreign nationals are snapping up UK property, while the pound is weak and prices remain very affordable outside London and the South East.

The new figures show that there has been a 20% year on year increase in expats and foreign nationals investing in UK property. These buyers are investing in both buy-to-lets and first, or second homes.

The research also reveals that in 2020, 60% of expats and foreign nationals buying property in the UK, opted for the Manchester area, while 25% choose Birmingham.  However, London has seen a 60% drop in buyers, this is the result of high property prices and poor rental yields, compared with other regions of the UK.

What may surprise many is that in real terms, property prices in the UK have fallen compared with a decade ago and there is a huge North-South divide. In London, the average property value has risen by nearly 70% in 10 years, whereas some other areas have fallen as much as 40%.

This growth in investors is partly down to the availability of a wider selection of mortgages designed for working expats and foreign nationals. Investors are also attracted by the UK’s robust legal system for property acquisition, which makes it one of the easiest places in the world to buy property.

Can we help?

If you would like to know more about the range of mortgages available to expats, both new and re-mortgage please do make contact. We have a fully experienced and qualified team waiting to assist you.

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Expat surge in re-mortgaging shows signs of Instability

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Re-mortgaging has reached record levels and now accounts for 41.5% of all expat mortgages conducted according to recent research.

The proportion of expat re-mortgages has risen by nearly 13% over the last 12 months, as homeowners are increasingly switching mortgage companies to find more attractive rates.

The promise of increased interest rates has no doubt helped drive demand for re-mortgaging. More and more expats are re-mortgaging to save money but also raise capital which is locked in their properties.

Many expat homeowners and landlords who have been saddled with lenders on less than competitive interest rates or stuck on higher standard variable rates are switching to more attractive fixed term deals. Rising property prices has also had an impact on re-mortgage growth, especially in the Southeast of the UK.

It is expected the demand for re-mortgaging will continue to rise in 2022, especially if there are rate rises. There is likely to be a shift towards more consumers considering fixed rate deals as the risk of rate rises remain for the time being. Expat buy-to-let re-mortgaging has also risen and now represents 12.8% of all mortgages, up by 6% year on year.

As a general overview, if you are an expat and not locked into a penalty mortgage deal good advice would be to review it with a view to saving money.

Can we assist?

If you would like a new or re-mortgage, please do make contact and one of our fully trained independent advisers will be happy to help.

 

 

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Expats please take note

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Any Expats due to re-mortgage are being urged to take advantage of current low rates as soon as possible because the forecasts suggest mortgage rates will begin rising as soon as next year.

The figures from the Office for Budget Responsibility (OBR) were discovered in documents, released last week, providing more detail on the Budget which was delivered by Chancellor Rishi Sunak.

The public body, which provides independent forecasts on finance and the economy, said it expected mortgage interest costs to begin rising next year before hitting a 13% increase in 2023.

The figures showed Expat UK homeowners needed to be braced for a big leap in mortgage costs to 14% in the first three months of 2023. This would then climb to 14.8% in the second quarter, before dropping to 10.5% by the end of the year.

Why?

The reason for the rise is down to the Bank of England base rate, which is looking set to start climbing from its 0.1% low very soon.

Expat UK homeowners need to be aware that it’s a case of if, not when, for an interest rate rise now and the clock is ticking on the record low mortgage rates we’ve all become accustomed to.

Expats on a fixed-rate deal now could face much higher rates when they come to re-mortgage in the coming years.

Any Expat who signed up to a two-year fixed rate deal earlier this year, nabbing a record low rate, will face a stark rise when they come to re-mortgage in the first half of 2023.

In a consistently increasing rates environment, the longer you fix the longer you can lock in today’s low rates. However, homeowners need to be careful when thinking about any long-term fixes.

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Expat UK property owners see good increases 

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UK house prices rose by 1.7% in September, equating to an increase of £4,400 to the value of the average property, according to the latest Halifax House Price Index.

This means that UK house prices are now at a record high of £267,500.

This month-on-month rise is the strongest increase since February 2007 and ups year-on-year house price inflation up to 7.4%.

This also reversed the recent three-month downward trend in annual growth, which had peaked at an annual rate of 9.6% in May.

Wales continued to record the strongest house price inflation of any UK region or nation, with annual growth of 11.5% in September (average house price of £194,286).

Scotland also continues to outperform the UK national average, with growth of 8.3% (average house price of £188,525).

The Southwest remained the strongest performing region in England, with annual house price growth of 9.7% (average house price of £276,226).

The Northwest saw the next biggest increase, with house prices up by 9% year-on-year (average house price of £201,927), marginally ahead of Yorkshire and Humber at 8.9% (average house price of £186,815).

The weakest performing regions in terms of annual house price inflation are all to be found in the South and East of England, though these are also the areas with the highest average house prices.

Eastern England has seen annual growth of 7.2% (average house price of £310,664) while in the Southeast it is 7% (average house price of £360,795).

Greater London remains the outlier, with annual growth of just 1% (average house price of £510,515) and was again the only region or nation to record a fall in house prices over the latest rolling three-monthly period (0.1%).

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Expat mortgage applications are on the increase

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The last 9 months has seen a significant increase in expat applications and approved mortgages against figures just issued for 2020. The increase shows how restrictions are being lifted as expat lenders compete for every single bit of business, this coupled with lower interest rates in real terms is indeed good news for the expat property investor.

Lenders continue to hold down rates, this is giving the borrower more confidence as the future looks bright even if small rises in interest rates are imminent..

Appropriate for expats with a current mortgage to re-mortgage?

Interest rates are most certainly in the borrower’s favour at present but there is always a lot of debate of how long these rates will last. All of this in mind it could be a very shrewd move to consider your own mortgage position. It is very commonplace for expat clients with a mortgage to just leave it as they are not aware of the savings that could be achieved with a re-mortgage.

There are many pros and cons to re-mortgaging all aspects need to be very carefully considered. It is not always best advice to re-mortgage to save money in the short term so please be sure to contact a professional independent adviser, they will give you an unbiased opinion of your situation.

If the time is right to change your current deal you might like to re-structure the borrowing you have in total. Mortgages offer much lower interest rates than store or credit cards, so equity in the property could be used to address this, again this is NOT always best advice.

Like to know more?

Please feel free to contact one of our expert independent advisers for any assistance you may require. We look forward to being of assistance to you soon.

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Expats look to lock in deals for financial stability

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Eight in 10 expat borrowers searching for mortgages in August were looking at fixed-rate deals, according to new analysis.

Fixed-rate mortgages are, as the name suggests, deals in which the interest rate remains the same for the term of the deal. Borrowers can choose deals in which they fix their rate for two, five-years or even 10 years.

While 80.1% were searching for the availability of fixed-rate deals, just under 20% were looking for variable rates – which offer interest rates based on external factors, such as the Bank of England base rate.

Currently the Bank of England has set rates at a low of 0.1% but there are some fears this could be increased, particularly as inflation is currently high.

Moneyfacts said in these times of economic uncertainty, it would seem the majority of borrowers had decided it would be easier to budget by protecting themselves from future interest rate volatility in the shelter of a fixed deal.

The data demonstrated a vast majority of potential new mortgage holders may be more risk-averse in the current economic climate.

Nearly 87% of the deals in the ‘fixed rate’ mortgage market were two or five-year products. Meanwhile, a third of borrowers were looking for a two-year deal whilst just over a quarter were searching for a five-year deal.

Longer term financial stability may also be in the forefront of consumers’ minds as the economy moves forwards.

Like to know more?

If you require help with your new or re-mortgage please do contact one of our fully qualified independent advisers who will be happy to assist.