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Hong Kong Residents Are Buying More Houses To Rent

Hong Kong residents are buying more houses and apartments to lease out for income in Britain, property agents say, a trend that coincides with what many expect to be a wave of emigration after China passed a national security law last year.

Hong Kongers became the fifth largest foreign investors in central London as of last August and have been driving up prices in some popular districts outside the UK capital.

But the new wave of buying also includes some Hong Kong residents who are pooling money to invest, a trend property agents expect to continue as more middle-class Hong Kong residents consider leaving for Britain and look to establish a source of revenue in advance.

“It’s become much more of a trend in the past six months or so,” Guy Bradshaw, head of London Residential at Sotheby’s International Realty told Reuters. “I’ve certainly been involved in a lot more conversations and Zoom calls with people in Hong Kong and funds in Hong Kong.”

The UK government is offering a new visa to Hong Kong holders of British National Overseas (BNO) passports that gives them a chance to become British citizens – a change it made after China’s national security law for Hong Kong.

A steady rental income would be useful in applying for the citizenship, as the BNO holders need to prove they can provide financial support for themselves for at least six months.

London estimates that over 300,000 Hong Kong residents could emigrate over the next five years, and Bank of America expects Hong Kong residents moving to Britain could trigger capital outflows of $36 billion in 2021.

While Hong Kong residents have long been active buyers of homes in Britain, real estate agents say more recently there has been increasing interest in older apartments and houses as rental assets.

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Hong Kongers have an affinity for real estate investment, with property prices in the Asian financial hub among the most expensive in the world.

Alan Wan, 38, who owns 13 residential properties in Britain, launched classes in Hong Kong two years ago – at the height of anti-government protests in Hong Kong – aimed at potential investors in properties in and around Manchester.

So far, his “UK Property Owner Association” class has attracted around 1,500 students. Enrolment spiked in the second half of last year after Beijing imposed the national security law.

One of Wan’s students, 30-year old Isla Kwok, who moved to Manchester in late January waiting to start a degree, is using the rental income she receives from a terraced house bought in 2019 to finance the cost of renting a smaller flat and mortgage payments.

She plans to re-mortgage her first property to buy a second one this year after getting a residence permit, as mortgage interest rates will be much lower.

“Once you’ve started your first property, it’s much easier to create more income to ease the financial pressure of living here,” Kwok said.

Wan said most of his students bought their properties individually, but he also had some who pooled money to buy in London.

Marc von Grundherr, director at realtor Benham and Reeves in London, said he has seen the same trend.

“I’ve had a few clients come to us and say, ‘Look, my son or my friend is wanting to invest in property because they’re thinking about coming (to Britain), but they can’t afford to do it on their own or they want to buy something slightly different – is it okay with two or three or four of them buying together?”

“That’s a change. Obviously you always had larger investment companies who bought large amounts of stock, but we’re talking not the very, very, very wealthy,” von Grundherr said.

Reporting by Clare Jim in Hong Kong and William James in London

Source: Reuters

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UK Property Market Still a Great Prospect for UK Expats

Many UK expats and foreign nationals are still looking to invest in UK property. And this is not surprising with the UK rental market predicted to keep growing.

Despite the turbulent times and the impending closure of the UK’s stamp duty holiday, UK expat mortgages and foreign national mortgages are still available for those looking to invest in UK property. And investing in UK property is one of the best financial decisions you could make.

An Appetite to Invest Amongst UK Expats and Foreign Nationals.

The extremely busy UK property market in 2020 has continued throughout the start of 2021. According to Rightmove, the UK’s number one property portal, 2021 saw the busiest ever start to a year in the property market (30% up from the start of 2020). Rightmove also predicts that the 2021 housing market will continue to perform strongly, with the number of prospective buyers contacting estate agents 53% higher than the same point in 2020.

There is a particular appetite to invest amongst UK expat and foreign national investors. According to a survey conducted by multinational law firm DLA Piper, 75% of investors are planning to invest in European residential properties in 2021. The respondents also ranked the UK as the number one spot for investment, indicating that the strong uptake of UK mortgages from UK expats and foreign nationals will continue through 2021. And overseas investors are particularly excited by the current conditions in the UK where there is a high demand for rental properties, property prices remain enticing, and the rental yields from properties are strong.

Years ago, major lenders had a monopoly on international property buyers. This meant that purchasing a UK property from overseas involved navigating extensive paperwork, salaries paid in a foreign currency and the lack of a UK credit history. However, nowadays expert mortgage brokers have access to a much wider range of products than those presented by mainstream lenders. This means that many of the difficulties involved in getting a UK mortgage as a UK expat or foreign national are now a thing of the past.

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The Strength of the Rental.

Traditionally, the UK rental market is very resilient. While the housing market remains steadfast, the rental market has also performed at consistently high levels. For example, in the aftermath of the global financial crisis, house prices fell 18% compared to only a 2% fall in rental prices (as reported by Savills, one of the world’s leading property advisers). This is a promising sign for UK expat and foreign national investors who are looking to invest, as even in the most turbulent circumstances, rental prices remain relatively resilient. And the outlook remains strong for the future too, with Oxford Economics predicting a 13.6% rise in UK rents by 2024.

‘The current conditions for investment remain solid, with Oxford Economics also predicting that the Bank of England’s base interest rate will remain at the low of 0.1% until Q2 of 2022. Consistently low interest rates also mean that there is a strong potential to make money from good capital growth on your property too.’ So, where should you invest?

Where to Invest.

‘The picture is clear on where to invest. The North West leads the pack with a projected growth of 24.1% over the next five years. This is followed by Yorkshire and the Humber, with a predicted 21.1% growth and Scotland which is predicted to grow 20.1% over the next five years. The rental growth picture is also strong in these areas. For example, according to JLL’s research, Manchester is predicted to have a rental growth of 7% by the end of 2022.’

Manchester is England’s fastest growing city with its population predicted to reach 600,000 by the middle of the 2020s. The surrounding area of Greater Manchester has a further population of almost 3 million people who support the economic and social infrastructure of the city. With a £7 billion investment from the government as part of their Northern Powerhouse scheme, Manchester’s infrastructure is bound to keep on growing and attracting more young professionals looking to both live and work in the city.

‘For UK expats and foreign nationals, Manchester presents such a strong investment opportunity. All the factors mentioned above are sure to stimulate demand and make sure that supply is kept low – thereby driving continued capital and rental growth. The city and surrounding suburbs are currently undergoing a rapid period of growth and change. The availability of UK Expat and foreign national mortgages, coupled with the incredibly low base interest rate from the bank of England, means a great range of mortgage products to choose from and, as such, it’s an excellent time to invest.’

Source: EIN News

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What Do The UK’s High House Prices Mean for UK Expats?

With UK house prices at their highest since 2017, we look at where this growth is most concentrated and what it means for UK expats looking to invest.

According to Zoopla, one of the world’s leading property portals, UK house prices are nearing their highest levels in four years – an average of £223,700. As of the end of January, house price growth reached its highest since April 2017 – 4.3%. But what does this mean for UK expats and overseas buyers looking to invest in buy-to-let UK property and are mortgages as readily available as before to UK expats and overseas buyers?

House Prices Across the UK.

As predicted, the start of 2021 has seen the UK housing market continue its strong performance. This is no doubt due, at least in part, to the imminent closure of the UK’s stamp duty holiday as people rush to complete on transactions and take advantage of the potential savings. Another factor stimulating the continued upward growth of the housing market is a lack of supply coming onto the market. As an expat looking to invest in a UK buy-to-let property, there are a few things to be aware of in the current marketplace.

“Over the last few years, much of the growth in house prices is being driven by the North. In particular, Liverpool and Manchester – two cities which are really head and shoulders above the rest when it comes to investment prospects” says Stuart Marshall. “Liverpool is currently experiencing the fastest rate of house price growth in 15 years with prices up 6.3% compared to the same point last year. Unsurprisingly, Manchester is also delivering fast price growth, up 6% from this time last year.”

“Wales continues to improve as an investment prospect with its countrywide growth rate up 5.4% from January 2020. This is no doubt driven by the massive growth of major cities like Cardiff, which continue to perform well for buy-to-let purposes and are increasingly popular for expat buy-to-let investors. The improved popularity of the ‘staycation’ is also partly to thank for Wales’ promising growth as more people have started to explore living in coastal and more rural areas, and Wales has many features which really suits their wish list.”

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Where are the Hottest Regions for Investment?

“The North. The North. The North. This is what we see day in, day out at Liquid Expat Mortgages. We’ve been really singing the praises of Northern investment for a number of years now and, more and more, the figures are really showing this to be sound advice.”

In the North East, North West and Yorkshire and Humber, price growth is at a 10-year high – the highest rate since before the global financial crash (an annual rise between 3.8% and 5.4%). This rapid rise in prices is increasingly encouraged by the affordability of property in these areas – a factor that is hindering growth in Southern regions. Though London is also seeing growth – 2.9% compared to January 2020 – it pales in comparison to other investment hotspots across the country, plus entry prices are a lot higher and so can be prohibitive for a lot of investors.

The Picture for Expats Looking to Invest.

“For expats looking to invest in buy-to-let property, eyes should be looking toward the regions mentioned above. Not only are properties in these areas far more affordable than other popular areas of the UK, but prices are projected to continue growing and rental yields are also high. For expats, buying now could mean strong profits from renting your property – as consumer demand is incredibly high in Northern hotspots like Manchester and Liverpool – and good financial gains when you come to sell the property as its likely to appreciate.”

“For those expats willing to wait to invest, the near future could hold even better investment prospects. Currently, market conditions created in 2020 look set to continue through the start of 2021. This means that the number of homes available is low and demand for them is high, resulting in higher prices. But, despite a strong start to 2021, prices are still projected to slow to 1% growth by the end of 2021. For those expats who are in no rush to buy, buying in a less competitive marketplace could make all the difference for the quality of your investment.”

In the aftermath of Brexit, expat buy-to-let investors were able to capitalise on a weak pound, low confidence from domestic consumers and political instability in the UK. It’s possible that we could again see a similar set of circumstances in the coming months, as initiatives like the UK’s furlough and self-employment income support schemes come to an end. As more homes come onto the market and new buyers become reluctant to buy or invest – or even pull out of proposed opportunities – the opportunity to pick up a great deal will become more common for discerning UK expat investors.

“It’s really important to adopt a holistic view of the situation – both of the UK housing market in general and of your specific circumstances as an investor. Often, prospective investors can be too close to the situation to really take stock of their needs and what they want out of their investment. This is where an expert broker comes in as we’re able to assess your overall objectives and marry them to the right type of expat mortgage product.”

Source: Ein News

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Overseas investment into UK commercial property reached highest market share ever at 50 per cent in 2020

The share of overseas investors in the UK commercial property market reached its highest ever level in 2020, accounting for 50 per cent of the GBP44 billion total for the year.

December saw investment into the UK commercial property market reach GBP6.7 billion, more than 80 per cent above the 2020 monthly average. The industrial and office sectors accounted for more than GBP2 billion of investment each in December, driven by several high-profile office deals in London and three large industrial schemes.

John Knowles, head of National Capital Markets at Colliers International, says: “The continued interest from overseas investors in 2020 is testament to the value that is still to be found in UK commercial property. Despite all the negative headlines around the future of the office, December’s investment volumes into the sector show that there is still capital ready to invest in well located, core stock. It will come as no surprise that industrial had a particularly strong December as appetite remains unabated, and I expect that the sector will still be the most in demand well into 2021.”

The GBP2.3 billion invested in offices in December drove the annual total for 2020 to reach GBP13 billion in the sector, 27 per cent below the 2019 figure. Last year, overseas capital accounted for 62 per cent of investment into offices, up from a 58 per cent share in 2019. The largest December deal was Sun Venture’s purchase of 1&2 New Ludgate for GBP552 million at a 4 per cent yield. The next largest deal by value was Allianz Real Estate’s purchase of the Marylebone Portfolio for GBP401 million at a 4.32 per cent initial yield.

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Industrial investment reached GBP2.9 billion in December, as monthly investment volumes broke through the GBP2 billion mark for only the second time on record. The 2020 annual figure of GBP9.3 billion means that the sector’s share of all CRE investment rose to 21 per cent, up from 14 per cent in 2019 and the highest on record. December’s largest deals include Blackstone Real Estate’s acquisition of the EPIC industrial portfolio for GBP335 million, AIMCo’s purchase of the Marlin Portfolio for GBP260 million, (4 per cent initial yield) and the sale of the Metro Portfolio to InfraRed Capital Partners for GBP50.75 million (4.75 per cent initial yield).

Around GBP500 million was invested across the retail sector in December, roughly 30 per cent above the 2020 monthly average of GBP370 million and slightly higher than the 2019 monthly average of GBP450 million. Several larger retail parks traded during December with Oxford’s Templar Retail Park bought by Federated Hermes for GBP45 million at 7.25 per cent initial yield.

The alternative/mixed-use and leisure segments attracted a combined GBP900 million in December, a third below the 2020 monthly average of GBP1.4 billion. The annual total of GBP17.2 billion is around 25 per cent below both the 2019 figure and the five-year average. Nonetheless, the sector accounted for roughly 40 per cent of all activity by value in 2020.

Oliver Kolodseike, Deputy UK Chief Economist at Colliers International, adds: “Last year’s market was characterised by uncertainty, lockdowns and government stimulus and this is unlikely to change in the first quarter of 2021. However, businesses have generally adapted well to lockdown measures and the roll-out of different vaccines and ongoing government support (such as the extension of the furlough scheme and new business grants) will help the economy to rebound strongly in Q2 21.”

Source: Property Funds World

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BNO Applications to Drive UK Property Demand in 2021?

With Hong Kong residents with BNO status able to apply for a new British visa from January 31st, will this correlate with an increase in demand for UK homes?

  • From 5pm local time on Sunday 31st January, Hong Kong citizens with British National Overseas (BNO) status can apply online for the new UK visa scheme
  • The new visa will allow people to reside in the UK and, after five years, be able to apply for permanent settled status
  • With UK property already one of the most popular overseas investments for Hong Kong nationals, is there likely to be an increased focus on British property for permanent residency in 2021 and beyond?

Following its announcement in 2020, applications for the new British National Overseas (BNO) visas have now opened online.

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From 31st January, any of the near three million BNO passport holders in Hong Kong, in addition to their immediate dependents, can apply for the visa from the UK Home Office.

The new arrangements will also allow for a staggered relocation. One parent will be able to remain in Hong Kong to continue working, while the other can move with their dependents to the UK.

Naturally, anyone moving to the UK will need a place to live. And, as one of Hong Kong’s most popular overseas investments, will this now lead to increased in UK property in 2021 and in the coming years?

UK property has long been renowned for its strength and resilience, particularly during times of wider uncertainty. In 2020, amidst the backdrop of the global pandemic and Brexit negotiations, average property price growth in the UK hit a new six-year high.

For Hong Kong residents in particular, the UK has also been a popular investment destination if their children are studying at a UK university, providing a place for them to live.

London is traditionally a hotspot for Hong Kong-based investment, but in recent years the strength of the property markets in regional cities – places such as Manchester and Birmingham – has also prompted increased focus in these sectors, too.

Source: Select Property

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UK named top hotspot for property investment by overseas investors

Overseas investors ranked the UK as the best residential property investment hotspot for 2021. What makes investing in UK property so appealing?

For a number of years, the UK property market has been a prime target for overseas investors, and this has continued at strong levels. Property investors from Asia, Europe and the US have particularly seen UK property as a solid investment choice in the past few years.

Recently, the UK was even named the top global property investment hotspot in a survey by international law firm DLA Piper. Of the 500 high-net-worth investors and asset managers surveyed, 33% said they wish to invest in UK property during 2021.

Investors headquartered in China and the US ranked the UK as the best for residential property investment. And investors in the UK, Germany, France, Spain and Italy named the UK the third best place for property investment.

Olaf Schmidt from DLA Piper comments: “The UK remains an attractive market for investment also post-Brexit which should provide confirmation and reassurance that the UK is a vital hub for activity and growth.”

Investors continue to be optimistic

Despite uncertainty still surrounding the global COVID-19 pandemic, investors remain optimistic about property investment. DLA Piper’s survey revealed more than half of respondents feel positive about the outlook of the European property investment market. Additionally, only 11% feel negative.

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Investors also shared why they remain so optimistic. The most common reasons stated were because of high demand and a shortfall in supply, strong yields and attractive prices.

Additionally, another recent study revealed nearly half of buy-to-let investors in the UK are remaining positive about the year ahead. According to Property Master, only 10% plan to exit the sector in 2021. And nearly 70% said they are not planning to sell their properties.

UK property market remains appealing

Foreign buyers and investors have been snapping up property across the UK before the additional 2% stamp duty surcharge comes into effect for overseas-based investors in April. However, many feel the stamp duty surcharge will unlikely deter overseas buyers in the future.

The fall in sterling, low mortgage rates and the UK’s strong property market will more than make up for this additional tax. The sector has strong long-term prospects for capital appreciation and increasing rental demand. And many overseas investors view the UK property market as a safe haven.

Additionally, interest from Hong Kong buyers and investors is set to surge with a new special visa opening to British National Overseas passport holders in Hong Kong on 31st January. This will likely lead to a significant number of Hong Kong residents emigrating to the UK and investing in property.

Throughout 2021, overseas and foreign investors are expected to continue investing in UK property at strong levels. In recent years, the UK property market has remained robust even during political and economic unease. Because of the sector’s resilience, overseas investors will continue snapping up UK property, even with the continued uncertainty of COVID-19.

Source: Buy Association

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Overseas buyers to take advantage of covid and Brexit discounts

Overseas property buyers could look to get a bargain this year, owing to potential savings caused by the pandemic and Brexit, said Fabrik Invest.

Investors are expected to mainly come from the Middle East, Hong Kong and South Africa.

Dale Anderson, managing director, Fabrik Invest, said: “The UK remains a promising and active market for fully managed buy-to-let properties.

“The country has a fundamental lack of supply and that’s unlikely to change; we simply can’t build homes fast enough.

“For overseas investors, Brexit actually presents potential for savings, as currency exchange rates fluctuate.

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“Add to that the fact that Covid is bringing about opportunities such as discounted deals and suddenly 2021 is shaping up to be a huge year for the buy-to-let sector.”

Interest rates remaining at the historic low of 0.1% is also favourable for overseas investors.

Anderson added: “With borrowing rates at a record low, now is an excellent time to invest in property.

“The government is printing another £150 billion due to the pandemic – a move that will catch up with it eventually.

“It carries with it the potential for the currency to devalue and inflation to rise, meaning that tangible assets such as bricks and mortar carry an even more reassuring degree of safety than usual.”

BY RYAN BEMBRIDGE

Source: Property Wire

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2021 UK Property Market Outlook for Overseas Investors

Generally, the UK is considered to be a very good place for Property Investors seeking buy to let properties, but changes to regulations and the property market can affect whether it is the right time to buy UK property. Covid-19 and Brexit have had a big impact on the UK economy and the property market, so if you are a British Expat or Foreign Investor looking to buy property in the UK, you should find this information useful.

Are UK Property Prices Good Value?

Following the outbreak of Covid-19 the UK property market has experienced a big shift in house prices, with the market bouncing back after the UK’s first lockdown and reaching a record high for house prices. Indeed, UK House Prices grew at their fastest rate since 2015 in November and indeed this trend is expected to continue with a very promising start expected for beginning of 2021.

Of course, high prices are not ideal for property investors, however property experts are predicting prices to reduce over coming months. One significant factor in this will be that the stamp duty holiday introduced by the UK government will expire in March 2021.

When compared to other countries, the UK has a very good rental market, with a lot of demand for renting property. Interestingly, one of the big trends that emerged from post-lockdown property searches was that more people were looking to move away from the city, to quieter areas with more space.

Investment Opportunities for Overseas Landlords

From a property investment perspective, if people are moving out of the city and looking to buy property in the suburbs, this will potentially mean that more properties close to the city centres will go up for sale. Usually, these are the areas that property investors are looking to rent out, either for students attending the local universities or young professionals who work in the city. So, this could mean that once the house prices settle, more houses in the types of areas that are perfect for landlords would be available at good value.

The other big factor that will affect the UK property market is that mortgage lending criteria has become stricter due to the economic situation, which means those people who might have been looking to buy their own property might have to rent until the economy becomes more stable again. This of course, means that there are further opportunities for landlords, with rental demand remaining high for the foreseeable future.

Unemployment rates have been increasing throughout 2020 due to the health pandemic and the job market is looking increasingly challenging, especially with the government’s furlough scheme due to end in March, at which time companies may be forced to make redundancies. So, it is going to be harder for a lot of people to get their own residential mortgage than it would have been a year ago, before the impact of Covid-19 took hold.

Is a UK Property Crash Likely?

Initially, a lot of property experts were expecting a significant crash after the mini boom after lockdown, when sales started to go through again. The introduction of the stamp duty holiday has helped the property market to stay buoyant, with lots of sales going through but when the stamp duty holiday ends, sales are likely to slow down at this point.

However, with the Covid-19 vaccine having started to be rolled out, there is a more positive expectation for the property market for 2021 and beyond, so investing now should not see any drastic house value crashes. Property investment is most successful for those looking for long-term investments, so as long as there is the demand to live in rented properties, buying investment property in the UK is still very attractive opportunity right now.

Student Housing Demand

Landlords, and potential landlords, have been wary about the impact of Covid-19 on students applying courses and living in student housing. Perhaps surprisingly, there was an increase in the number of UCAS applications for undergraduate courses for the academic year of 2020/21.

When universities re-opened in September and October, the UK news was filled with updates regarding the high numbers of Covid-19 infections throughout the student population. Many students also complained about paying course fees when much of their course had to be delivered online.

Universities have been worrying about the impact on applications for the next academic year but with the vaccine expected to be available for the majority of the UK population before the new term, this should give students confidence in the university experience they will receive in the next academic year.

Another interesting factor regarding student applications is that there was a 9% increase in international student applications in 2020, as announced by UCAS. So, student applications were actually at an all-time high, despite the UK lockdown and with so many foreign students looking to study at UK universities, demand for student accommodation should remain high.

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The impact of Brexit on students

There was a noticeable drop in EU undergraduates for 2020-21, which was largely attributed to the uncertainty of Brexit. As of 1 January 2021, students from the EU will require a study visa to attend a university in the UK, which could result in lower numbers of students coming from the EU this academic year. However, the numbers of students coming from China, India, the US, Hong Kong, Malaysia and many other non-EU countries has been rising in recent years.

This gives confidence to Overseas Landlords & Property Investors who are looking at renting property out to students and now that the vaccine has started to be rolled out to the UK population and also around the world, this should provide additional confidence that there will be a lot of demand for student accommodation for the foreseeable future. The UK remains a very attractive option for international students, with many UK universities having very good reputations around the world.

Demand for UK Rental Properties

We mentioned earlier that stricter lending criteria will be a barrier for many people who were hoping to get onto the property ladder in the near future. The UK mortgage industry had to adapt quickly to take into account the impact of furlough arrangements, where potential borrowers had their salary reduced by 20%.

Mortgage Lenders adjusted their criteria to manage the risks of furloughed workers not being able to afford their mortgage payments and also to try and mitigate the risk of many furloughed workers later being made redundant. 

Mortgage lenders have also had to provide payment holidays to their current mortgage holders, as directed to do by the government, so lenders have had a lot of new challenges to face in 2020 and are constantly working on setting out the best approach to lending criteria going forward.

The Bank of England revealed in August that the number of mortgage approvals in 2020 stood at 418,000 compared to 524,000 for the same period in the year previous. It is expected that the higher levels of unemployment and other economical factors in the UK will result in a reduction of approved mortgages in 2021.

This scenario can be advantageous for Expat & Foreign Property Investors because mortgage lenders will be looking to lend to applicants that are more likely to be able to afford to pay their mortgage. Unlike many industries such as hospitality that has been devasted by lockdown restrictions, property investors will often be deemed to be lower risk to lenders, as they have financial stability and different income streams.

UK Mortgages for Expat or Foreign Investors

While many mortgage lenders are tightening their lending criteria, using a Specialist Expat or Foreign Investor Mortgage Broker will help to find a good mortgage deal that will enable investors to expand their property portfolio in the UK.

Expat Mortgages UK are a whole-of-market broker that has access to every single mortgage deal on the market, which enables us to find our clients the best possible deal at the most attractive interest rate. Our experience and specialism in this sector also bring benefits such as working through the challenges of being a non-UK resident.

We work with a wide range of property investors from around the world and even if they have little or no UK credit history and their income is in foreign currency, we are still able to find the right mortgage solution to help them to succeed in buying UK investment or residential properties.

Foreign investors often struggle to obtain mortgages in the UK but at Expat Mortgages UK, we work with lenders who will take on this risk and we will help you to complete the application, so that it goes as smoothly as possible.

Our expertise will also help to ensure there are no unnecessary delays that can result in missing out on a property, so contact us today and we can get started on your foreign investor mortgage application.

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Overseas investors expect real estate to drive UK growth

Some 31% of overseas investors said that real estate and construction would drive UK growth in the future, up from 10% in 2019 – the highest increase of any sector.

Real estate and construction is now in the top-three most attractive sectors, behind only digital (seen as driving future UK growth by 50%) and health and wellbeing (36%).

Russell Gardner, EY UK & Ireland head of real estate, hospitality & construction, said: “The government’s stated infrastructure plans have likely played a role in boosting interest in the real estate and construction sector.

“But the significant impact of the pandemic on UK high streets and workplaces has also encouraged many investors to re-imagine what real estate will need to offer in the future.”

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The pandemic has re-shaped investors’ strategies, with 61% saying that the changing model in major city centres will become an important theme in future investments.

Underlining the built environment’s importance to FDI more widely, 23% of respondents cited the reliability and coverage of infrastructure as an important factor for deciding whether to invest in a particular country.

EY’s UK Attractiveness Survey found that the proportion of overseas companies planning to invest in the UK in the next 12 months has fallen to 25% from a 10-year high of 31% in April.

Only 43% are continuing with the UK investments they planned before the pandemic, down from 72% in April.

BY RYAN BEMBRIDGE

Source: Property Wire

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Where overseas investors own most properties

The London boroughs of Westminster, Kensington & Chelsea and Camden are some of the most popular with foreign owners.

Pure Property Finance analysed data from the Land Registry on overseas companies that own property in England and Wales.

There were 10,938 in the City of Westminster, 5,847 in Kensington and Chelsea, and 2,363 in Camden.

In terms of areas outside London, 1,770 were in Manchester and 1,516 were in Liverpool.

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Ben Lloyd, managing director of Pure Property Finance, said: “Since we set up Pure in 2013, we have worked with clients across the UK and abroad to secure bespoke property finance that suits their specific project needs.

“In this time, we have definitely seen some ‘hotspots’ for investment, particularly in London and the South East, along the M4 corridor, as well as cities in the North West.

“Some of these areas are now becoming oversaturated and do not provide the opportunities they once did. However, others remain in high demand; high value locations will almost always hold their value and bring a solid long-term return on investment.”

Overseas investors will be charged a stamp duty surcharge of 2% from April next year.

BY RYAN BEMBRIDGE

Source: Property Wire