Expats are in ever increasing numbers trying to either get on the ladder or increase their current UK property holding. The majority of expats see property in the UK as a “pension fund” or a way of laying financial security for the long-term future.

Bricks and mortar have always been a national obsession. The wisdom that property is fundamentally a very good long-term investment has been passed down from generation to generation.

Brexit

This is the one unknown area that could affect the property market, if all the experts are correct it is unlikely to have any lasting long-term damage. Facts are whatever happens the UK property market is very likely to remain strong and positive,

Applications

Expat mortgage applications are currently at an all-time high and the outlook for 2019/20 remains positive. It would seem that the high property prices do not deter the investor. Expats seem to have the attitude that investing in savings accounts are a lost cause and property offers far better returns in the long run.

According to recently released figures the UK property market has been the best performing in the whole of Western Europe. It is therefore not surprising that so many people want to invest in an ever-shrinking market.

Need assistance?

If you require help with your current or new mortgage please contact one of our experienced independent advisers who will be happy to assist.

Brokers are reporting the largest number of buy-to-let mortgage applications from expats than ever before. This is not a surprise, in general the buy-to-let market is currently booming for all kinds of reasons.

Expats see this market as value for money, bank interest rates are low and there is real potential for capital growth on any re-sale and a better income than the banks are offering.

Interest in the UK property market has seen an up surge in viewings since the turn of the year. Estate agents up and down the country are reporting an increased interest in property at the lower end of the market from expats living abroad.

Are good deals for expats available?

Well, the simple answer to that is most certainly yes. Expats are always surprised at the very good rates that are available to them. Mortgage lenders currently are fighting to secure business in a very competitive marketplace, reducing both interest rates and fees.

Brokers have seen an increase in longer term fixed rate mortgages recently as clients want to know the outgoings of their investment property. Many other types of plans are on offer and it is prudent to consider all options before deciding.

It is commonly known with buy-to-let mortgages that the larger the deposit you can put down a lower interest rate can be achieved.

Need assistance?

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

The Bank of England’s monetary policy committee has voted unanimously to keep the base rate at 0.75%.

The rate has now been at this level for nearly a year, having been raised from 0.50% on 2 August 2018. The minutes reveal that the MPC has cut UK growth expectations for 2019 from 1.5% to 1.3%, and for 2020, from 1.6% to 1.3%. The MPC also believes that a no-deal Brexit would result in the sterling falling lower than its current levels along with CPI inflation increases and GBP growth slowing down.

Noting that core CPI inflation came in at 1.8% in June, the minutes add that if a “smooth” Brexit occurs and there is some global growth recovery, the committee “judges that increases in interest rates, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target.”

It adds that sterling would also rise in this situation.

In the accompanying inflation report for August, the bank revised several targets upwards for Q3 2019 – Q1 2020, namely that: expected mortgage approvals for house purchases was changed from 60,000 per month to 65,000 per month, the prediction that the UK house price index would fall by 1.25% in 2019 changed to rising by “just over” 2% in the year to Q1 2020, and that housing investment would fall by 0.50% per quarter would now fall by 0.25% per quarter.

Facts are we might have a new prime minister but the fundamentals in the UK remain the same, so this wait and see approach makes sense. The country is experiencing enough uncertainty and drama, with Boris Johnson reaffirming the threat of a hard Brexit, and the potential of a general election in the coming months.

The real worry is the strength of the pound, which has now reached a 31-month low. Regardless of the Bank of England’s actions, there will still be a downward pressure on sterling. A lower pound rate will benefit UK exporters, but will also raise the consumer price for imported items such as food and fuel. And since the UK is a net-importer, the poor exchange rate is going to be felt across the board.

Expat mortgages

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

There was a surge in re-mortgage activity in April, May and June 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. The Bank of England cut interest rates in August 2016 from 0.50% to 0.25% – the lowest on record and the first interest rate cut since 2009 when the financial crisis was at its peak. This led to a number of lenders slashing their rates and competition in the mortgage market heating up.

However, with the Bank of England hinting that it could raise interest rates in the near future as Brexit fears take a grip, economists are predicting a hike could come as soon as November 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 in May and June, suggesting the market is picking up steam before the Brexit outcome is decided..

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.

EA 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 1,000 expats found that 31% 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 69% 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.

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.