The market so far has been largely unmoved by Brexit. Lenders have continued to drop interest rates across the board since last summer which indicates a lack of concern currently.

There seems to still be a large appetite for banks to lend. The rates are very competitive and there are still plenty of high loan-to-value mortgages available to consumers.

If anything is to bring this to halt then it would be the Bank of England base rate rising. If the bank were to raise rates from 0.25 per cent to 0.5 per cent, the impact would be greater than just a rise in mortgage repayment, because inevitably confidence will take a hit. Yet so far, there have not been any firm indications that this is the way the Bank of England wants things to go.

If you are an expat with a mortgaged property in the UK now is a great time to lock in a new deal for the next few years and make the most of the low rates on offer.

Expats re-mortgaging to secure the future

Expat re-mortgaging levels have soared to an eight-year high in September as borrowers take advantage of lower monthly repayments the latest figures have revealed.

The value of re-mortgaging fell due to a drop in the average loan size, but with overall mortgage activity down it still accounted for two-fifths of total lending in June this year.

Expats who have not reviewed their current mortgage deal recently would be well advised to do so as rates are expected to rise in the future.

Help required?

If you would like to review your current mortgage please do make contact and one of our fully experienced independent advisers will be happy to assist.

Now more than ever expats are looking for ways to reduce their monthly outgoings, one of the biggest expenses most people have every month is the mortgage payment.

As an expat there is a lot of uncertainty at the moment with poor exchange rates and the Brexit situation taking time to settle. It may be a very prudent move to review your current mortgage to establish if it is still the best deal for you, and you are not paying more than you need to.

This will not be the case for everybody, your current deal may well be exceptionally good, but it is most certainly worth checking as the wrong deal could be costing you thousands extra every year.

Expats have an excellent choice of mortgage deals currently available, so it is a particularly good time to check you are not paying more than you need to.

If you decide to re-mortgage this may an opportune moment to review any expensive loans and credit cards you may have. It is likely the UK property has gained in value giving you a larger equity which could be used to reduce the expensive debt.

Reasons to re-mortgage

• To save money.
• Raise extra cash for a project you have planned.
• Your current deal is ending soon
• You want to pay more to clear the loan earlier and the lender will not permit this.

Can we help?

If you would like to review your current expat mortgage do make contact and one of our fully qualified independent advisers will be happy to assist.

Property prices rose 1.8% in May to reach a new record average price of £242,832, according to Nationwide.

The building society said prices are up £23,930 over the past 12 months alone, an annual growth rate of 10.9% and the highest recorded in seven years.

The market has seen a complete turnaround over the past twelve months. A year ago, activity collapsed in the wake of the first lockdown with housing transactions falling to a record low of 42,000 in April 2020. But activity surged towards the end of last year and into 2021, reaching a record high of 183,000 in March.

While March’s spike in transactions was driven by the original end date of the stamp duty holiday, a lot of momentum has been maintained. Research indicates that the extension to the stamp duty holiday is not the key factor, though it is clearly impacting the timing of transactions.

Amongst homeowners surveyed at the end of April that were either moving home or considering a move, more than two thirds (68%) said this would have been the case even if the stamp duty holiday had not been extended. It is shifting housing preferences which is continuing to drive activity, with people reassessing their needs in the wake of the pandemic.

The frenzy to snap up a property at the tail end of a pandemic is showing no signs of stopping, with double digit growth in house prices throughout May – the highest we have seen in the best part of a decade.

It is still crucial that prospective buyers go into the process with a sound understanding of the market and what they want from a new property.

As demand in the market increases, the extra competition creates a fear of missing out that can distract buyers from the fundamentals. It’s important not to let the current property frenzy draw attention away from what you are really looking for.

The number of UK and international landlords choosing to register as a limited company to manage their portfolios is on the rise.

A spike in international investors enquiring about forming a limited company, up 62% year-on-year.

 Last year, there were a total of 41,700 buy-to-let incorporations, an increase of 23% on 2019. The numbers have more than doubled since 2016, rising 128%, when tax changes for landlords were introduced.

Between the beginning of 2016 and the end of 2020 more companies were set up to hold buy-to-let properties than in the preceding 50 years combined. Companies set up to hold buy-to-let properties were the second most common company founded during 2020, with companies selling goods online or by mail order in first place.

More than a third (34%) of all companies set up to hold buy-to-let properties in 2020 were in London. Together, London and the South East accounted for almost half (47%) of all incorporations.

Advantages

If landlords hold property in a limited company, they have the ability to offset 100% of mortgage interest against profits, while those holding a property in their own name can offset just 20%. Investing in property through a company provides landlords with higher levels of tax relief and personal tax savings. Landlords can grow their BTL portfolio more quickly, as there is no income tax on the retained profit, thus allowing more cash to re-invest.

Although corporation tax is payable on trading profits, this is lower than the higher income tax rate. However, running a portfolio through a limited company is not right for everyone.

One of the main benefits of remaining a private landlord is that any post-tax profits can go straight into their pocket. Profits can be used then for anything they choose – all paid for by the tenants.

There was a surge in re-mortgage activity in February and March of this year, as expat borrowers look to lock into cheap deals ahead of an expected interest rate rise.

Since the financial crisis in 2008 mortgage rates have steadily fallen.

However, with the Bank of England hinting that it could raise interest rates in the near future and economists are predicting a hike could come as soon as July/August of this year.

Record low mortgage rates continue to sustain market activity, many of the Bank of England’s Monetary Policy Committee are now adding to the calls for an interest rate rise, this picture could very quickly change.

A “wait and see” approach is best avoided for existing expat UK homeowners considering re-mortgaging.

The number of expat mortgages approved also went up this year, suggesting the market is picking up steam now the Brexit outcome has been resolved.

Expats who avoid reviewing their current mortgage deal could well pay for this error in the long term as interest rates look to be going upwards. Not everybody will benefit from changing their mortgage, but it certainly makes sense to check how your existing deal stands up to the future.

Contact us.

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