Marketing No Comments

Fall in demand expected in UK property market from overseas buyers

THE downturn in house prices is likely to lead to a fall in demand from foreign buyers in the UK property market, a leading expert has predicted.
New data revealed earlier this month revealed that more than 70 per cent of ‘prime central London’ properties sold so far this year have been bought entirely in cash.
The report by estate agents Savills has fuelled concerns that rich overseas buyers are snapping up properties at the expense of working Londoners.

But Jonathan Rolande, from the National Association of Property Buyers, said demand from overseas investors was likely to become “subdued”.

He said: “London has continued to attract investment from the wealthy despite the downturn in prices in the last year. The minor fluctuations can be overlooked by those who still see the UK, and central London in particular as a safe place to leave their money. For many buyers, an inflation rate of 9% is nothing compared to rates in some countries.

Contact us today to discuss Expat Mortgages and how we can assist you.

Outlining what he thinks will happen next, he continued: “With the hope of substantial gains in the property sector fading fast, demand from foreign cash buyers will soon be more subdued. However, the trusted nature of Britain’s legal system around property means London will still be an attractive prospect for those who stand to lose more by leaving capital in their home country.

To redress the inequality felt by many Londoners, another increase in Stamp Duty for these buyers may well help to do so but the Government walks a tightrope. The huge wealth that these investors bring to the UK would be missed if taxes were set so high, and they were deterred from coming here in the first place.

Discover our Expat Mortgage Broker services.

Mr Rolande added: “It is therefore more likely that the general downturn in prices will serve as its own deterrent. Ironically, this also means that many locals will still be unable to afford a city property as mortgage lending rules tighten and higher interest rates make borrowing even more expensive, despite lower asking prices.”

A total of 71 per cent of prime central London have been bought mortgage-free in the seven months from January. That compares with about 35 per cent for the UK as a whole.

It comes as soaring inflation has led the Bank of England to push interest rates to a 13-year high of 5 per cent, which has in turn led banks to raise mortgage rates, making large home loans increasingly difficult to afford.

Source: Evesham Observer

Marketing No Comments

Hong Kong buyers dominating foreign homeownership in England & Wales

House hunters from Hong Kong have been found to be the most prolific overseas buyers operating in the nation’s residential market, accounting for over 13% of all foreign-owned homes in England and Wales, according to newly released market analysis.

London lettings and estate agent, Benham and Reeves, submitted a Freedom of Information request to the Land Registry to ascertain the 50 most prominent foreign nations represented among individual residential property owners in England & Wales, and how many properties they own.

According to the data, buyers from the 50 most represented foreign nations among owners of homes in England & Wales combine to own 187,275 properties.

Hong Kong buyers most prominent nation

Buyers from Hong Kong own the largest proportion of these properties, with 24,759 homes representing 13.2% of the aforementioned total.

Contact us today to discuss Expat Mortgages and how we can assist you.

Buyers from Singapore own 15,752 properties or 8.4% of the total; while buyers from the U.S. account for 6.4%.

Buyers from the UAE account for 5.7% of the total, while buyers from Ireland (5.3%), Malaysia (5.2%), China (4.6%), Australia (4.4%), Kuwait (4.3%), and France (3.7%) are also strongly represented on the national housing market.

Increase in foreign buyer numbers

These figures come after the total number of properties owned by buyers from the top 50 foreign nations increased by 3.8% between January 2022 and January 2023.

Ownership for Chinese buyers has increased the most in the past year, rising by 18.8% to own 8,736 properties.

Discover our Expat Mortgage Broker services.

Hong Kong nationals have increased their presence by 11.6% since 2022, and Israeli buyers have increased their footprint on the national housing market by 9.8%.

Significant increases have also been recorded among buyers from Gibraltar (6.7%), Austria (6.7%), Turkey (6.7%), Egypt (6.3%), Norway (5.1%), Germany (4.8%), and Sweden (4.7%).

Among the top 50 most represented nations in England & Wales’ housing market, three have actually seen their ownership proportion decline in the past year.

Buyers from Ireland now own -3.5% less property, buyers from Taiwan have reduced ownership by -3.3%, and Russian buyers now own -0.5% less property than they did at the start of 2022.

Director of Benham and Reeves, Marc von Grundherr, commented:

“It’s no secret that England & Wales is a hugely attractive market for overseas property buyers, with London being a particularly desirable location. The stability of our property market offers reliably a profitable space for investment buyers, and our country, with its rich history and culture, has long held great appeal for people looking to buy outside of their home countries.

“Many experts believed that Brexit would result in there being fewer overseas owners as access to the EU was reduced and the anticipated economic struggles removed some of the profitability of investing in our great nation. Our exclusive research reveals that none of this has come to fruition and that, in fact, our market has only become more popular.

“While this popularity isn’t limited to one single nation, it’s certainly being driven by Hong Kong buyers who continue to be the most prominent foreign nations operating within our bricks and mortar market.

“This is certainly no new trend and Benham and Reeves has had a local Hong Kong office since 1995, helping those who are looking to purchase in England and Wales. However, it’s fair to say that our team of experts in Hong Kong have never been busier and we expect this to remain the case going forward.”

Source: Property Reporter

Marketing No Comments

Time to buy – UK house prices & lower expat mortgage rates

Volumes are up and interest rates stable in the UK housing market

UK-based buy-to-let mortgage broker Offshoreonline has reported its best figures for expat mortgage enquiries in March 2023 since before the pandemic. In fact, volumes are now equalling pre-pandemic levels.

“In a very short space of time, the main structural issue with the UK housing market, a lack of supply, seems to have been turned around,” says Guy Stephenson from Offshoreonline.org. “If anything, we’re now seeing an excess of supply over demand. This makes UK house prices attractive for expat home buyers. They have more choice, and sellers will be more likely to take a good offer, given the shortage of UK buyers as a result of a rise in UK mortgage rates.”

Property portals such as Zoopla and Rightmove are reporting the supply of houses put on the market is increasing month on month. The trend started in January 2023, when listings rose by 5.9%. It then continued in February with the figures rising 28%. Now, in March, the listings recorded by estate agents are up a further 17%, according to Rightmove.

Contact us today to discuss Expat Mortgages and how we can assist you.

Decline and recovery

Highlighting the sometimes contradictory picture in the UK housing market, Guy says, “The Bank of England began pushing the UK base rate sharply higher, mainly from August 2022. Therefore, UK mortgage rates inevitably rose steeply too. This caused a market shock, and housing demand declined rapidly in late 2022.

“Despite the headlines suggesting a demand collapse, the UK house price reports such as those produced by Halifax, Nationwide and the UK government reveal that, over time, UK house prices in the better quality areas have stood up, mainly because supply has been so limited. With strong demand chasing a very limited supply, house prices in the UK have remained firm in these areas.”

If you’re someone who held off on a buying decision, now could be a very good time to make a move. The supply of houses for sale has shown a rapid recovery, increasing choice and making the UK housing market very attractive for buyers. At the same time, major mortgage lenders have released lower expat mortgages rates in the UK.

The Birmingham Bounce

Offshoreonline quotes the example of a client based in Singapore who, having spent months searching for an investment apartment, finally reluctantly put an offer on one in Birmingham at just over £200,000. The flat came with a tenant in situ, but when the service and ground rent costs were factored in, eventually they concluded it didn’t make financial sense.

Having spent most of 2022 house hunting, they therefore withdrew from the purchase in March this year. Within one week, they found a larger, more suitable terraced house at just below £200,000 with no service charges, which transformed the financial case for investing. The whole deal, from search through to offer and acceptance, was completed in under eight days.

Discover our Expat Mortgage Broker services.

What do Singapore-based expat buyers need to get a UK mortgage?

According to Offshoreonline, there’s not only a wide choice of expat mortgage lender, but the application process is also simple. Buyers will need a deposit of at least 25% of the sale price. They’ll also need to confirm their employment status and where they live in Singapore, perhaps with a local utility bill. Apart from that, the property’s rental potential will be a key factor. Houses need to generate a minimum of £510 monthly rent for every £100,000 borrowed.

Are UK mortgage rates going up or down?

After the chaos of the mini budget in late 2022, happily, markets have settled. The UK economy is still performing well. It has avoided recession and retail sales are still stronger than most people expected. So, Offshoreonline expects the UK base rate to stay at current levels for a while.

“We’re not going to get back to the unnaturally low UK base levels seen over the last 10 years as ultimately these were due to the Bank of England intervening to offset the dramatic impact firstly of the financial crash in 2008 and subsequently the pandemic.

Whilst forecasting interest rates is virtually impossible, our view is that the long-term average for the UK now is probably a UK base rate in a range somewhere between 2.5% to 4%, or perhaps a little more, with mortgage rates around 1% above these figures. We currently have a range of lenders offering expat mortgages from 4.99% to 5.40%. So there’s a good amount of choice,” says Guy.

By Kaur Harsharan

Source: Expat Living

Marketing No Comments

Less Affluent Areas Driving Rental Growth for UK Expat and Foreign National Investors

Huge Rise in the Number of Rental Households.
With fewer young people buying a home, the number of privately rented households has grown by 1.12 million or 29% in the last decade. This is compared to only a 6% increase in the number of households generally. Clearly then, there is a disproportionate rise in the number of people renting compared to the general growth of households. ‘This rise in rental demand and consequential growth in the rental sector has led to huge profits for UK expat and foreign national landlords over the years’ says Stuart Marshall of Liquid Expat Mortgages.

‘But recent data from real estate agent, Hamptons International, suggests that understanding the causes of this rise in the number of privately rented households might be key to making a profitable investment in 2023.’

Contact us today to discuss Expat Mortgages and how we can assist you.

Less Affluent Areas Seeing Bigger Increases in Rental Households.
Much of the reason for the rise in the number of rental homes is to do with the tighter lending criteria introduced in the aftermath of the global financial crash. These tighter criteria put homeownership out of reach for many people with either low deposits or below average incomes. As a result, home ownership has become most difficult in less affluent areas.

This is supported by Hamptons’ data which shows that the growth in the number of privately rented households between 2011 and 2021 was highest in the most deprived 10% of areas in the country. Accordingly, 23% of households in this poorest 10% now rent their home privately – an increase of 5% from 10 years ago. Expanding the focus further shows that 60% of privately rented homes are in the bottom 50% of affluent areas.

Less Affluent Areas to Drive Rental Growth.
‘But why should this matter for UK expat and foreign national investors? Well, choosing the right area is one of the most important parts of an investment journey and will go a great way to determining the success or failure of the investment venture. With rents rising so much in recent years, choosing an area with high rental demand will be incredibly important and lead to big profits for UK expat and foreign national investors. If less affluent areas are performing better when it comes to rental demand, then UK expat and foreign national investors would be wise to look in these areas when buying a property as they are more likely to make a larger profit.

To put in perspective how profitable these less affluent areas are from an investment standpoint, rents paid in the 10% of most deprived areas have doubled between 2012 and 2022, to 5.4bn. Because of these factors, it’s likely that the less affluent areas of the UK will continue to drive rental growth throughout 2023 and become the ‘investment hotspots’ of the future.’

Discover our Expat Mortgage Broker services.

Properties in Less Affluent Areas Accessible with UK Expat and Foreign National Mortgage Products.
‘Further, properties in these less affluent areas are far more affordable than in many other areas of the country and are more likely to turn a profit more quickly than properties in other areas’ adds Stuart Marshall. ‘This can prove to be incredibly fruitful for UK expat and foreign national investors and is especially true for UK expat and foreign national investors utilising UK expat and foreign national mortgage products. These products can help investors to spread the cost of their investment and with property prices skewing lower in the less affluent areas, UK expat and foreign national mortgage products can be incredibly powerful, even enabling discerning investors to buy a portfolio of properties.’

‘Less affluent areas are also becoming more popular for buyers as high mortgage rates push people to look to more affordable areas and towards smaller properties. This means that UK expat and foreign national investments made in these areas are also likely to see big capital gains alongside high rental profits. This comes at a great time for UK expat and foreign national investors as buy-to-let mortgage choice is at its highest since before former Chancellor Kwasi Kwarteng’s mini-budget. The market is also commonly seeing improved choice for buyers while sellers are accepting average discounts of 4.5% or £14,100 off their asking prices.’

Source: EIN News

Marketing No Comments

Tumultuous year for UK property market presents opportunity for foreign buyers

The war in Ukraine and the mini-budget of former Prime Minister Liz Truss last year had caused a jump in interest rates which left domestic buyers struggling.

The property market in the United Kingdom is becoming increasingly attractive for foreign buyers, but it is widening the divide between richer homeowners and high-interest mortgage holders.

The war in Ukraine which started in February last year, along with the mini-budget of former Prime Minister Liz Truss in September last year, had caused a jump in interest rates which left domestic buyers struggling.

However, house prices have since cooled and mortgage offers are on their way down, along with a weakening of the British pound.

Contact us today to discuss Expat Mortgages and how we can assist you.

UNDER PRESSURE

The UK property market has repeatedly proven its resilience, but every period of economic hardship puts it under pressure, said observers.

Soaring costs of living and the subsequent raising of interest rates in a tumultuous 2022 have created a challenge for home buyers and homeowners.

Trade association UK Finance’s director of mortgages Charles Roe said: “As a result of that volatility in the financial markets and particularly in the hedging market, the futures market for interest rate swaps, what we found is that some lenders couldn’t price their products, so they withdrew the products from the market.”

The situation has since stabilised. It is making the market particularly attractive to overseas buyers and helping to prevent a dramatic house price slump in the capital.

Mr Ed Lewis, head of residential development at Savills, said: “I know what the hurdles are for, particularly the younger age group, getting into the property ladder.”

He added: “But London doesn’t work without it being an international city. And London doesn’t get built without international investment.”

Discover our Expat Mortgage Broker services.

THE BUYERS FROM ABROAD

Prices at the top end of the market have seen little change, and that is widening the gap between richer homeowners and those with high-interest mortgages.

The rising interest rates signalled the end of a long era of cheap borrowing.

The last time the base rate of interest was as high as the current rate was in 2008, with the average UK property price having risen 72 per cent since then.

Foreign buyers, many from Asia and the Middle East, have contributed to the jump.

Dr Filipa Sa, a senior economics lecturer at King’s College London, said: “If we keep foreign investment constant at the level of the year 2000, we see that in 2019, house prices would have been about 17 per cent lower.

“I look at the effect on the price to income ratio, which is a measure of affordability, and I see also that foreign investment increases the price to income ratio. The effect is also quite big and statistically significant.”

While foreign investors tend to buy at the top-end of the market, researchers said that there is a knock-on effect driving prices up overall.

An additional 2 per cent tax is levied on foreign buyers, but estate agents noted that it has not dented the demand, due in no small part to the UK’s limited housing supply.

That is the greatest challenge for the market currently, but there remains no consensus on how to solve it, said observers.

By Fabian Koh

Source: CNA

Marketing No Comments

Foreign homebuyers sheilded from rising property prices due to weakening pound

Despite house prices climbing considerably over the last year, buyers from overseas currently looking for UK property are saving huge sums due to the weaker pound with discounts as high as £40,000.

The latest research by lettings and estate agent, Benham and Reeves, looked at current property market values and how they compare to this time last year, with the research showing that since February 2022, the average UK sold price has increased by 7.8% to £294,329 today.

Even in a slower London market, the average value of a home has increased by 4.8%, commanding £543,099 in current market conditions.

However, while domestic homebuyers have had to contend with the increasing cost of climbing the ladder, exchange rate fluctuations and a weakening British Pound compared to some currencies have presented an opportunity for foreign buyers to secure a saving.

In February of last year, the average UK house price of £273,066 would have required a buyer from the United States of America to spend $369,459. Today, however, the higher average UK house price of £294,329 would see them spend just $355,079, a saving of $14,381 (3.9%) or £12,161, despite the increased value of UK bricks and mortar.

This saving is even higher in a more inflated London market, where purchasing at the current London average of £543,099 would require them to spend $655,195 versus the $700,993 they would have spent in February of last year, a difference of $45,799 or £38,730.

Contact us today to discuss Expat Mortgages and how we can assist you.

Buyers from the UAE have also benefited to the same extent, saving -3.9% or AED 52,717 on their purchase, climbing to AED 167,986 (-6.5%) in London. That’s the equivalent of £12,142 saved on the average UK home or £38,690 on the average London home.

The UK continues to be a popular destination of choice for Hong Kong homebuyers and they too have seen the cost of purchasing a UK home fall, down by -3.3% when compared to this time last year, a saving of HK$95,145 or £10,254.

Again, in London, Hong Kong nationals are enjoying savings as high as 6% on the average cost of a home in the capital, reducing their purchase price by HK$325,801 or £35,111.

However, not all foreign buyers are benefiting to the same extent. The Euro has failed to provide a discount on the average UK house price, with European buyers paying 1.9% more today versus a year ago, while those looking to London are seeing a marginal saving (-0.9%).

Foreign buyers from China are paying the equivalent of £10,868 more today versus a year ago on the average UK home, With Japanese buyers also paying the equivalent of £5,391 more today.

Discover our Expat Mortgage Broker services.

Marc von Grundherr, Director of Benham and Reeves, commented: “We’re yet to see any notable reduction in house prices and, in fact, the latest sold price figures show that they have continued to climb across both London and the UK as a whole. This demonstrates the tenacity of the property market even during times of economic uncertainty and highlights why so many foreign buyers look to the UK when investing in bricks and mortar.

“We’ve seen a steady stream of foreign interest returning to the market, particularly across London, pretty much since Covid travel restrictions were lifted. However, a weakening pound has enticed them to an even greater extent, as many are now enjoying a substantial discount when purchasing versus the price they would have paid a year ago when property values were lower.”

Source: Property Reporter

Marketing No Comments

Suffolk BS enhances expat and buy-to-let criteria

Suffolk Building Society has announced a series of product and criteria changes to help brokers place more complex cases for their landlord and expat clients.

Expats and non-UK nationals

Suffolk Building Society will accept applications from first-time buyer expat landlords who are working and residing abroad and who have not owned a property before but who wish to purchase a rental property in the UK.

The Society will no longer require returning expats to spend a set amount of time in the UK before applying for a mortgage. It’s common for lenders to require anything up to two years on home soil but this change allows expats to apply as soon as they return. This applies to both employed and retired applicants.

Non-UK nationals will also be accepted on a joint application where one applicant is a UK national. This means that the non-UK partner can now be named on the mortgage. However, brokers should be aware that affordability will be based solely on the UK national applicant’s income only and they will be required to meet all relevant criteria.

Contact us today to discuss Expat Mortgages and how we can assist you.

Support for UK landlords

As well as accepting first time-buyer expat landlords, Suffolk Building Society will now consider applications for first-time buyer buy-to-let properties in England and Wales. Full buy-to-let criteria will be applied including interest cover ratio (ICR) and minimum income. The Society will also run a background affordability assessment.

Landlords wishing to purchase or remortgage their own residential property will now be considered regardless of how many buy-to-let properties they have in the background, as long as the buy-to-let portfolio is self-financing. Previously, the Society had a limit of 10 buy-to-lets in the background but this criterion has now been removed to help landlords.

Discover our Expat Mortgage Broker services.

Charlotte Grimshaw, head of intermediary relations at Suffolk Building Society, said: “We know our niches extremely well and have a very good understanding of the issues facing brokers in these markets at the moment. It matters to us that we’re there to support those whose circumstances means they need a specialist lender on their side – particularly as everyone faces the uncertainty of the current economic climate.”

By ROZI JONES

Source: Financial Reporter

Marketing No Comments

Capricorn’s Jeremy Law on overseas investment in the UK property market

Following a turbulent 2022, it is reassuring that an upward turn is already being evidenced this year, with many indications that we are getting back on track. But what of international interest in UK property?

The good news is that current market conditions mean there’s a lot to be optimistic about on that front, too.

The UK’s economic struggles continue to see many face a challenging time – but the weaker pound makes UK property investment a particularly attractive prospect. This is especially the case when considering the ability to purchase ‘forward contracts’, enabling buyers to secure a future sum at today’s exchange rate. Indeed, international investors can capitalise on current exchange rates, using currency to their advantage to make the cost of a deposit far lower than at other times.

Added to this, with some domestically choosing to defer a property purchase until we are sailing in calmer economic waters, rental yields are on the rise. Suggestions are that rents are up 15% to 20% year on year, which makes for a good investment case when buying to let from abroad. It is true that mortgage costs may have gone up – but these are being more than balanced out by higher rents, meaning earning potential in this area is now considerable.

Contact us today to discuss Expat Mortgages and how we can assist you.

Meanwhile, November marked a turning point for fixed mortgage rates, which began to fall. This is not to say they are back at the levels enjoyed before, but they are moving in that direction. The market is normalising, meaning rates will go up and down, and we are back in a position where buyers can take advantage of current offers, which remain lower than historic averages.

Another advantage of the unprecedented events of last year is that some lenders have reduced the margin on their tracker products, making them a more attractive long-term play. In general, lenders have been forced to innovate and there are now a variety of options in terms of mortgage deals to suit different needs, with brokers playing an increasingly important role in helping customers find the best products for them – especially when looking from abroad, where the right lender options can be more challenging to find.

Added to this is the fact that there are many more lenders in the market than there were just a year ago. This has the effect of keeping competition healthy, encouraging further innovation of products and policies – including, for example, offset products and products that offer greater flexibility. There is also an additional incentive for lenders to keep prices low (or at least lower than the competition).

Discover our Expat Mortgage Broker services.

There are a number of factors that mean international interest in UK property is on the rise – a final one being that lenders are marketing to Chinese buyers again. With China opening up again following its zero-Covid policy, more Chinese property investors are likely to be able to travel to the UK to visit properties, along with their Far East neighbours – naturally increasing potential for investment.

There is no doubt that the last 12 months have been something of a rollercoaster ride for the market – but the fallout has undoubtedly created fertile ground for overseas investment in UK property, and this is a reason for positivity.

By Jeremy Law

Source: Property Week

Marketing No Comments

Double stamp duty surcharge for overseas buyers to ‘level’ UK property market for locals, urges lobby group

The UK government should double the stamp duty surcharge overseas buyers must pay when purchasing a property in England, an industry lobby group has said.

The National Association of Property Buyers (NAPB) said doubling the stamp duty surcharge would “level the playing field” amid an influx of “wealthy foreign buyers”.

Under current rules, overseas buyers must pay an extra two per cent surcharge for a house they are going to live in, and an extra five per cent for any property that will not be their main home.

Contact us today to discuss Expat Mortgages and how we can assist you.

However, the lobby group urged the government to double the two per cent surcharge, in arguing foreign buyers from “high income and low tax locations” are pushing up UK property prices.

The group added that the “collapse in sterling” after Liz Truss’ mini-budget created a “huge discount” for overseas buyers as it warned an increase in the surcharge is needed to fix housing “inequalities”.

Jonathan Rolande, a spokesperson for the NAPB said: “Foreign ownership is reducing available stock in the sales and rental sector and pushing up prices”.

He noted that hiking the surcharge would also “bring in additional funds for the treasury” as he said the UK government needs to “think bigger” in their approach to the housing market.

The calls come as figures show almost 250,000 UK properties worth a combined sum of £90.7bn are currently owned by overseas nationals.

Discover our Expat Mortgage Broker services.

London continues to be the top destination for foreign buyers, with 85,451 properties in the UK’s capital owned by those from overseas.

Inside London, Westminster remains the top destination for overseas buyers, with £1.8bn worth of homes owned by foreign owners, while Kensington & Chelsea took second place with £10.7bn.

By Louis Goss

Source: CITY A.M.

Marketing No Comments

The Perfect Rental Storm Continues for UK Expat and Foreign National Investors

A shortage of rental homes and huge numbers of renters in the market are combining to create the perfect rental storm for UK Expat Investors.

The ‘Perfect Rental Storm’ continues for UK expat and foreign national investors in 2023 as a shortage of rental homes combine with huge numbers in the rental market to make for a very profitable rental landscape.

Shortage of Rental Homes

There are currently less than half the normal number of homes available to rent at the moment and this is contributing to fast-rising rents. This equates to the typical estate agent having only 8 available rental properties. The pre-pandemic average was 16, which shows how much rental availability has suffered in recent years.

The low number of rental homes is being driven by high consumer demand and high mortgage rates, which mean that prospective buyers are struggling to get onto the property ladder and are consequently stuck in the rental market. This situation means that rental prices are rising quickly amidst fierce competition. In practice, the average rents for those starting a new tenancy have risen by 12% in the last year.

With cities proving even more popular in the rental market, places like Manchester, Birmingham, and Cardiff have risen as much as 15%. Even renters who are choosing to stay put are facing increases of around 4%. This is largely because many existing renters are in fixed-period rental contracts and landlords aren’t looking to increase prices in a bid to maintain tenancies. Because of the much lower price-increases for renters who stay put, many renters are choosing to stay where they are to avoid risking higher rents. According to data from the English Housing Survey, the average length a renter stays in a property has now risen to 4.4 years, which is up from only 2.7 years in 2012. This means that the flow of available homes into the market is very slow and is further exasperating supply constraints.

Contact us today to discuss Expat Mortgages and how we can assist you.

Sky High Rental Numbers

In addition to the shortage of rental homes, there are also sky high numbers of people in the rental market, with the proportion of people in the private rental sector jumping by 28% in the last ten years. According to the government’s latest housing census, 5 million households are now renting their home in the private sector. This is likely a result of affordability constraints caused by house price growth and lower first-time buyer numbers, as well as many of the factors mentioned above. Crucially, the number of households has also increased, with the number of new properties being built not matching this increase.

The huge numbers of households renting at the moment is good news for UK expat and foreign national investors, as the shortage of rental homes is being further exasperated by ever-increasing numbers of renters. These factors will both contribute to constant increases in rental incomes and rental yields, meaning big profits for UK expat and foreign national investors with the right property.

Discover our Expat Mortgage Broker services.

What Does This Mean for UK Expat and Foreign National Investors?

‘The problem of high rents and low rental availability is unlikely to go anywhere as a huge increase in rental supply will be difficult as a result of higher borrowing costs and regulatory changes’ says Stuart Marshall, CEO of Liquid Expat Mortgages. ‘But for those who do manage to invest in property, the rewards are likely to be huge. The number of households in the rental market has grown massively over the last ten years and it’s likely to keep growing, with the number of new homes being built continually falling short. Rental demand is consequently bound to stay high, and this will feed big profits for UK expat and foreign national landlords.’

‘Competition is also lower for UK expat and foreign national landlords who choose to invest in UK property now. This is due to new tax and regulatory changes in the buy-to-let sector which have impacted landlords’ bottom lines and contributed to lower levels of investment into the rental sector. In turn, this has contributed to landlords selling their existing rental properties as investors look to cash in on capital growth profits, especially given the massive price rises in the last few years.’

‘While there are obvious difficulties for UK expat and foreign national investors to navigate when investing in UK property, things are not as difficult as they once were’ says Stuart Marshall. ‘The advent of specialist UK expat and foreign national mortgage brokers has been a hugely positive change for many UK expat and foreign national investors as these brokers can help investors to navigate the inherent difficulties of investing in UK property. Not only will they help to smooth the process and make completion as quick as possible, but they can also help to advise UK expat and foreign national investors in the process of choosing a property for their specific investment goals.’

To maximise the quality of the investment, UK expat and foreign national investors should keep abreast of the popular types of property and what is appealing to renters at the moment. In the most recent housing census, it’s clear that the popularity of flats has seen a huge increase over the last few years, with 500,000 more households living in flats compared to ten years ago. This demand for flats also lines up with the popular properties for UK expat and foreign national investors at the moment. Namely, energy efficient properties with lower management and running costs because they can assure a stability of rental income. In fact, much of the recent focus for UK expat and foreign national investors is shifting away from capital growth and back to solid rental incomes. This is because the rental market is booming but huge rises in property value over the last few years have contributed to low capital growth potential. City centres have also become incredibly popular for renters, which again favours flats in the rental market. Flats are also highly mortgageable, which is good news for UK expat and foreign national investors, as there are a range of excellent UK expat and foreign national mortgage products available at the moment.

Source: EIN News