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.

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.

Overseas 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 which continues, according to the latest figures released

The property portal found that searches for UK property by overseas buyers have grown steadily this year. 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.

Areas with the most interest

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.

Greatest interest is from?

US house hunters are watching the market most closely, accounting for nearly 50,000 searches in the third quarter of this year, as shown by the list below of the top 3 countries/areas where buyers are searching from:

1. USA
2. France
3. Asia

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 2018.

Can we assist you?

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

 

Expats living overseas are very keen to purchase property in the UK as the market continues to show good growth.

Mortgages are easier to come by than they were 2 years ago plus interest rates are at an all-time low.

Expats who own property abroad have had a worrying time of late as property prices in some European countries have fallen at alarming rates. The uncertainty in Europe is without doubt down to the weak Euro and poor economies of some countries.

First time buyers looking to break into the UK market are finding it very difficult as property prices continue to rise. A recent survey conducted for major high street estate agents shows lower end market properties are being snapped up by buy-to-let investors. It is no secret that the UK property market is currently under siege from the buy-to-let investor and looks set to continue for the foreseeable future.

What to do?

Suitable first-time purchases are almost impossible in the London and South-eastern areas so prospective buyers are looking further afield.

A major estate agent chain recently commented “It is still possible to buy a reasonably priced property in the London commuter belt if you look hard enough”. “Clients who are prepared to look outside the box are having a great deal of success”.

This coupled with some extremely good mortgage deals available have given expats a “window of opportunity” it would seem. The message that seems to come from all this is to act as quickly as possible before this avenue closes.

Mortgage advice?

If you require any assistance with your first time or re-mortgage please do not hesitate to contact one of our fully trained independent advisers who will be happy to help.

A recent survey has claimed that thousands of expat borrowers could be missing out on a better deal by not speaking to an independent mortgage adviser when looking for a mortgage.

Its survey of over 2,000 expats found that 33% of consumers who went direct to a lender didn’t understand how a mortgage adviser could help with their search.

The findings also showed that 67% of borrowers who went straight to a lender hadn’t re-mortgaged in the last five years and 74% stayed put because they felt they had ‘a good deal’. However, without seeking independent mortgage advice, these individuals would have missed out on mortgages deals that are only available through an independent mortgage adviser.

There are plans to use the research to tackle the misperceptions about independent mortgage advisers and raise awareness about how they can help borrowers to find the right mortgage for their needs.

Far more choice and much quicker

Borrowers going through an independent mortgage adviser have access to many more mortgages than those going direct to the lender, including specialist mortgages for the self-employed and later life lending solutions such as lifetime mortgages..

Homeowners who benefitted from a mortgage adviser searching the market for the best mortgage deal were more likely to have switched in the last five years (29%), compared to just 19% of those who went direct.

Borrowers who used a mortgage adviser were also overwhelmingly in favour of doing so again. 98% said that they found the support of a mortgage adviser ‘valuable’ and a further 95% said they would recommend using a mortgage adviser to family or friends.

Help required?

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