Expat mortgage business growing fast

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This financial year has seen more new expat mortgage business being conducted than this time last year and applications are still rising as the year progresses.

Mortgage rates are at a record low fuelling the increase in business being done in all sectors of the mortgage market. Even with the recent base rate rise there are still excellent deals to be had.

September and October has seen a record number of re-mortgages as clients look to release equity built up over the years within their properties. The released equity is being used for assorted reasons including expensive debt consolidation. Expats are also re-mortgaging to fix the rate of their loan over a longer term as more base rate increases are expected in the new year.

Confidence is sky high within the expat community at present especially with those who own a property in the UK. This is due to the ever-increasing property prices.

If you are considering taking out a mortgage or re-mortgaging, please call us and one of our advisers will be happy to assist.

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 2018 is very positive indeed, the signs are this will continue for the foreseeable future.

Can we help?

As expat mortgage specialists we offer a much-valued service to our client so please make contact if we can assist you.

Expats going for longer deals

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Two-fifths of expats (42%) re-mortgagors opted for a five-year fix in October, the third month in a row that the percentage of re-mortgagors fixing for 3 plus years has grown.

Reason for the surge in demand is fears of more rises in interest rates with 56% of September’s re-mortgagors anticipating the Bank of England increasing base rate, and they were correct.

This is a considerable increase from the previous month when 45% of borrowers said they were expecting an imminent rate rise, and is in stark contrast to September 2016, when this number was only 10%.

With average mortgage rates increasing, expat borrowers are capitalising on this benign lending environment by locking-in to fixed deals and securing rates for the medium to longer-term. This is without doubt a very wise move as the UK economy continues to be unstable. The Brexit talks uncertainty is not helping either.

Annual repayment figures for re-mortgagors has fallen to 12.4% of total income – an all-time low. In October alone, the number of expat re-mortgagors increased by 19%, while the value of re-mortgaging increased by 16%.

These figures go to show the wise expat is acting rather than “sitting tight and hoping” which is a very wise move if your mortgage is “stuck” on a variable rate.

Can we help?

If you would like to review your current mortgage please make contact and our fully qualified advisers will be happy to assist.

 

 

Expats very keen on UK properties

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We have seen a significant increase from expats wanting to secure property in the UK due to falling house prices in the majority of European countries. Since the Brexit vote interest as increased substantially as expats want to secure a foothold in their native country.  Expats living in France and Belgium, for example, have seen property values drop by as much as 15% over the last 5 years. Spanish owners have also seen tough times over the last few years but there are signs the market is beginning to level out at last.

The UK property market continues to be on an upward spiral even after the recent events and offers security in the longer term. Mortgage lenders are still offering good rates to attract new customers on long and short-term deals, so overall now seems an appropriate time to invest in the UK.

Expats who have existing properties in the UK are also getting very wise to the re-mortgage market as their current deals come to an end. With the likelihood of a rate rise soon, now would be a very good time to review your mortgage if you have one.

Re-mortgaging to get the best rates of interest and save money

When taking out a new mortgage it is normal to get an introductory rate, for example, it may be a low fixed or discounted rate or a low tracker rate for the first few years.

Introductory deals normally last for between 2 to 5 years but some are only months. Once the deal comes to an end it is likely the mortgage reverts to the standard variable rate which can then start to cost you extra money.

It is advisable when your deal ends to contact us to review your needs, we will search the marketplace for the best deal to suit your current needs.

Help required?

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

Expats need to get ready

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An interest rate rise from the Bank of England in the near future is being described as a “near certainty” as inflation hits 3%. The Office of National Statistics said that in the year to September inflation had risen to 3%, the highest annual rate since March 2012.

The announcement makes an interest rate rise in November a near certainty as the Monetary Policy Committee takes action to show they are keeping inflation under control.

It would seem the age of record low interest rates is coming to an end, anybody with a mortgage should get prepared sooner rather than later.

If you are an expat with a mortgage get it reviewed quickly to ensure it will meet the upcoming pressures. Acting now could save individuals literally thousands per year.

Expats with a UK mortgage on a variable rate will see repayments increase, but this can be avoided if a switch is made to a more beneficial rate.

What can you do?

Well, the first thing is to check out your current deal and find out if you have any early repayment penalties. You may already have a very advantageous mortgage deal and if this is the case leave well alone. You should seek professional advice when it comes to mortgages as the wrong move now could cost you thousands.

You may wish at this review to raise some cash from your re-mortgage to pay off expensive credit cards. The other alternative is to go for a longer-term fixed rate, so you can budget over the coming years. These are very important times coming up and you should not sit still and ignore this hoping it will all go away.

Can we assist?

If you want to review your mortgage call one of our experts and we will be happy to assist you in your future planning.

Expats could earn a pay rise?

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More than a fifth of expat mortgage payers won’t shift to a new lender, no matter how good a new deal they are offered, according to research. Mortgage experts say staying with your existing mortgage provider could be the equivalent of turning down a pay rise.

According to the new data, more than a third of expat borrowers haven’t changed their mortgage in the past five years, despite better deals on offer. This means that homeowners could be unnecessarily overpaying by thousands of pounds a year. Just ask yourself, when was the last time you reviewed your mortgage?

Most at risk of overpaying are expat homeowners whose deals have ended and have moved to their provider’s standard variable rate (SVR).

Now is the time to consider re-mortgaging as rates are likely to rise in the very near future. Borrowers on a SVR could save the equivalent of a monthly pay rise or an annual family holiday.

Mortgage rates plummeted again this year but this is about to end if you believe what Mr Carney is saying. Rates could start to rise as early as next month so if you are on a SVR mortgage get it reviewed urgently.

Could you give yourself the equivalent of a hefty pay rise by re-mortgaging?

The simple answer to this question is YES! If you have a current deal with no penalties to change It is strongly advised you to contact us to see what is available.

Your mortgage is likely your biggest financial obligation; don’t let it be your biggest blind spot.

Can we assist?

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

Bank rate rising?

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A leading economic research consultancy has warned that mortgage rates are set to rise, putting a brake on house price inflation.

According to expert’s mortgage rates are set move back above 3% by the end of the year.

Economists have suggested that the first interest rate increase for a decade could come as early as November after the Bank of England warned a hike was likely in the coming months if the economy evolves broadly in line with its expectations. Thus, Interest rates could rise by the end of 2019 to an expected 1.75%.

Accordingly, it seems almost certain that mortgage interest rates are now approaching a turning point. It would seem that sound advice for expats with a mortgage is to review it as soon as possible to ensure it meets future demands.

Higher borrowing costs will represent a major change for the housing market, mortgage interest rates will without doubt increase as they are doing slowly at present. Despite the inevitable rise in mortgage rates, it is unlikely that to trigger another downturn in house prices as supply and demand seem to rule the day.

It is very clear, much will depend on how the economy evolves, but most economists and financial market pricing suggest that a small rise of 0.25% is likely at the Monetary Policy Committee’s next meeting in November, which would take Bank Rate to 0.5%.

A modest rise in the Bank Rate, by itself, will have only a modest impact on economic activity. Indeed, if rates are raised to 0.5%, monetary policy settings will still be a little more supportive than they were before Bank Rate was lowered to 0.25% in August 2016.

Need to review?

If you would like to review your current mortgage or indeed require a new one please make contact and one of our advisers will be happy to help.

Expats are catching on

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There was a surge in re-mortgage activity in August, 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 for the first time in a decade in order to curb inflation, economists are predicting a hike could come as soon as November this year. Record low mortgage rates continue to sustain market activity, but given even the most dovish members 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 August for the second month in a row, suggesting the market is picking up steam following the Brexit vote.

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 advisers will be happy to help.

Expats looking at rate hike!

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The Bank of England has hinted that it could raise interest rates for the first time in a decade to curb inflation, with economists predicting a hike could come as soon as November this year.

In the minutes of its latest Monetary Policy Committee meeting, the Bank said: “A majority of MPC members judge that, if the economy continues to follow a path consistent with the prospect of a continued erosion of slack and a gradual rise in underlying inflationary pressure then some withdrawal of monetary stimulus is likely to be appropriate over the coming months to return inflation sustainably to target”.

Members of the MPC voted by a majority of 7-2 to maintain interest rates at 0.25%.
However, the Bank said that the decision to raise rates would not only depend on inflation but also on the continued strength of the economy. Today’s decision comes after the Office for National Statistics revealed that that inflation rose by 2.9% in August, up from 2.6% in July – equalling the four-year high hit in May this year.

In August, the MPC forecast two rate hikes over the next three years, with the first not until the third quarter of 2018. Today’s announcement suggests there could be a hike far sooner than this.

This all means for the expat mortgagee that interest rates are very likely to increase sooner rather than later. So, very good advice would be to review your current mortgage deal to ensure it is right for your long-term future.

Review assistance

If you would like to talk to an adviser about your current mortgage or indeed require a new mortgage please make contact and we will be happy to help.

Property values rise again – still a great investment.

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House prices are 3.4% higher than they were a year ago, according to the latest figures just released. The annual growth rate in the three months to August was higher than the 2.7% annual growth recorded in July.

The average UK house price is now £222,000 after property values climbed 1.3% between July and August. But house price growth is down from its peak of 10% recorded in March 2016. When you consider all that has happened in the last two years it is little wonder. For the expat investor, the reduced growth still represents good value as general savings accounts offer very little return on your money.

Prices were boosted last year amid a flurry of transactions ahead of the introduction of new stamp duty and tax changes to buy-to-let and second homes. While unemployment is at a 42-year low, experts say growth is being held back by low wage growth and rising inflation, which is putting pressure on household finances.

Expats are still flocking to buy in the UK with mortgage transaction numbers at their highest level since March 2016.

The lack of supply of homes for sale has constrained market activity and helped maintain prices. Stock levels on estate agents’ books are near an all-time low and new instructions have fallen for the 17th month in a row. Experts say house prices should continue to be supported by low mortgage rates and a continuing shortage of properties over the coming months. However, some experts are warning interest rates could start to increase at the turn of the year.

Expat mortgages.

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 help.

Expat mortgage market changing

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The mortgage market in Britain is experiencing a notable change as the reasons why expats re-mortgage evolves. Expat UK home owners are moving away from short term deals and variable rates onto five-year fixes at low rates in moves to guarantee certainty and financial security, according to the latest reports.

Just 18% of expat owners re-mortgaged to lower their monthly repayments in July compared to 21% in June. 15% re-mortgaged to increase the size of their overall loan in July, a fall from 19% in June.

The analysis suggests that instead of re-mortgaging to lower monthly repayments or borrow extra money, home owners appear to be nervous about interest rates increasing and re-mortgaged onto long term deals for certainty and financial security. Just 2% of re-mortgagors predict interest rates to fall in the next year, with the remaining 98% expecting rates to either stay the same or rise.

Over a third, some 37% fixed onto a longer-term deal in July, the greatest since numbers were first tracked, and a significant increase from 7% who previously had a fixed five-year product.

This is a meaningful change in expat behaviour when re-mortgaging. Typically, over the last year, people were re-mortgaging to save on their monthly repayments or borrow additional funds. Instead, with rates low and expectations of a rate rise high, expats are fixing for longer for added financial security.

Expats it would seem are taking shelter from future rate rises and preparing for potentially turbulent times to come. The way people borrow is changing, there is a significant decline in interest-only and variable rate deals, and fixing for longer appears to be the top priority.

Can we help?

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