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The number of overseas landlords reaches a five year high

The number of overseas landlords owning property in the UK has hit a five-year high of 184,000, marking an increase of 19% over five years.

Ludlowthompson says that the rise in the number of overseas landlords shows that Brexit has not been a deterrent for those looking to invest in UK property, as many overseas investors have capitalised on the drop in the value of pound sterling between the EU referendum and the Brexit deal to add to their portfolios.

Favourable exchange rates meant that foreign buyers were able to get more for their money, opening the market up to a wider pool of investors, says the estate agent.

Ludlowthompson adds that despite tax changes, property in the UK will remain an attractive long-term investment prospect for investors from many overseas jurisdictions.

Research shows that in recent years, there has been an increase in the number of Hong Kong buyers of UK property. This is expected to rise following the launch of the new visa for Hong Kong British National Overseas passport holders.

The reputation of schools and universities in the UK has also benefitted the property market. Ludlowthompson says that many overseas landlords who have purchased property have done so to provide accommodation for their children who were studying in the UK.

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Overseas landlords have been benefitting from the stamp duty holiday, which has enabled buyers to save as much as £15,000 on properties worth up to £500,000. The holiday is set to run until 30 June after which point stamp duty will be reintroduced on properties worth £250,000, and will apply to properties over the £125,000 threshold from 30 September. From 1 April, overseas landlords will be liable to pay a 2% stamp duty surcharge on property investments.

Stephen Ludlow, chairman at ludlowthompson, said: “Fears that Brexit might dampen the appeal of UK property amongst overseas investors have been unfounded, with the number of overseas landlords reaching a record high.

“Many canny investors took advantage of the temporary drop in Sterling’s value to purchase properties in the UK and benefited from both an increase in property prices and a recovery in sterling.

“Investments by overseas landlords into UK buy-to-let properties has ensured that there has been a steady stream of capital into that sector, which has kept the quality of rental stock far higher than would have been the case with these investors.”

Source: Property Wire

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Hull investment on the up as overseas buyers snap up Anlaby Road property

A Chinese businessman has snapped up a high-end residential complex in Hull in the latest example of foreign investment in the city.

Anchor House has been sold by Hull property company, Westfield Homebuyers, the multi-million-pound deal being handled by city legal firm, James Legal.

Westfield founder Mike Clayton purchased the iconic property, in Anlaby Road, from a housing association at auction five years ago and spent the following year on a refurbishment that transformed it into a high-quality rental complex that is now home to a range of young professionals, including medical staff working at Hull Royal Infirmary and visitors to some of Hull’s major industrial employers.

Mike said: “It had been used to house tenants with a variety of issues, and so was built from concrete and steel to withstand vandalism, arson and other issues, giving it a very institutional feel.

“We took it back to brick inside and created a suite of high-end flats and studio apartments, as well as putting in communal cooking, garden and barbecuing areas, and even a gym and sauna.”

It was Mike’s long-term passion for property that inspired the qualified chartered surveyor to take on what proved to be a tough but rewarding project.

Anchor House is now at the epicentre of Hull’s ongoing regeneration, with MyPad Accommodation acting as management agent for the building, but Mike, who is entering semi-retirement, has now sold the complex almost fully let and was not surprised that it was an overseas buyer.

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“Hull represents a really good investment compared to traditional hubs like London, Manchester or Leeds, because property remains relatively good value here, while still returning solid rental yields, particularly with interest rates on traditional savings still historically low,” he said.

Dealing with an international purchase in the midst of a global pandemic was no mean feat, however, the transaction taking longer than the anticipated three weeks – the deal eventually went through after about six months.

Simon Young, managing director of James Legal, said: “We take great pride in supporting major projects like this which are key to the city’s infrastructure and ongoing development.

“It’s the latest example of how our team regularly pull out every stop to get transactions over the line for our clients, even in the most challenging circumstances – in this case, in the midst of a historic global pandemic.”

Danny Gough, managing director of MyPad, said: “This deal was a fantastic development for all the companies involved, and indeed for Hull as a city.

“MyPad will continue to manage Anchor House for this overseas buyer, who I understand hopes this will be the first of many similar investments in this locality.

“And he’s not the only one, we’re seeing many similar enquiries, week-on-week, from foreign investors who like the look of what Hull and surrounding area has to offer.”

By Deborah Hall

Source: Hull Live

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BREXIT: No cause for British expats to panic

It is not all doom and gloom for UK nationals living in Cyprus. Realizing the significant contribution of the vibrant UK nationals’ community, both to the economy and society, the Cyprus government has tried to accommodate the all-important British expat community as best it can.

Despite what may appear in the press or social media platforms, talk of ‘British subjects have no rights’ is a myth, as those who were here before 31/12/2020 will see very little changing in their everyday lives and work.

The EU has reached an agreement with the UK on Citizens rights known as the withdrawal agreement.

The Withdrawal Agreement ensured the UK would leave the EU in an orderly manner, and one of its main objectives was to protect the rights of citizens who have built their life based on rights which have emanated from UK membership to the EU.

Any UK nationals and their family members who exercised their free movement rights in Cyprus before 1 January 2021 and lived here before Brexit have the right of residence, employment, study, and free movement in the Republic of Cyprus.

They are entitled to continue living on the island just as they did before Brexit.

Any British Nationals and their family members who already hold residency documents, such as a Certificate of Registration (MEU1), Residence Card (MEU2) or a Certificate/Card of Permanent Residence (MEU3), can continue to use them as a means of proof of their residence rights in Cyprus.

Cyprus has chosen not to make it obligatory for UK nationals and their family members who hold the above documents to apply for a new residence status to verify they are entitled to their residence rights.

Should they opt to apply for the New Residence Documents (MUKW1, MUKW2, MUKW3), they only need to submit a valid passport to replace their existing ones as proof of identity and their current residency documents.

The applicants will be requested to present themselves at the local Immigration Office or the Civil Registry Migration Department to submit biometric data.

It is important to note that eligible UK nationals who have been living in Cyprus before 1 January 2021 but have not yet applied for residence documents continue to have the right to do so.

They should do so, provided they can submit evidence of their residency before that date and prove that they continue to reside in Cyprus.

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If UK Nationals have completed five years of continuous residence in Cyprus before 31 December 2020 and do not hold residency documents, they will be eligible to acquire permanent residence.

Otherwise, they will be eligible to apply for temporary residence and remain in Cyprus until they reach the five-year threshold to apply for permanent residence. Commencement of this 5-year period starts when exercising their free movement rights, which may be at any time before 1 January 2021.

Any child born or adopted after 1 January 2021 by eligible UK nationals will enjoy the same rights as pre-existing family members.

Furthermore, any existing family members of eligible UK nationals who on 31 December 2020 were living in a country other than Cyprus can reunite with eligible UK Nationals in Cyprus as a family member at any time in the future.

Such family members will then be eligible for permanent residence after completing five years of continuous residence.

In all the above cases, a new type of residency document will be issued to UK nationals and their family members, the MUKW1, MUKW2 and MUKW3.

There is no deadline for submitting residency applications within the new process that applies from 1 January 2021.

Notably, however, future spouses and partners of UK nationals who are not covered by the Withdrawal Agreement and wish to come to Cyprus after 31 December 2020 will need to meet Cyprus Immigration regulations.

If UK nationals do not hold residency documents issued before 31 December 2020 and have no credible evidence, they exercised their free movement rights in Cyprus prior to that, in that case, they will still be able to visit Cyprus.

But their passports will be stamped during entry/exit border checks with a 90-day out of 180-day limitation period.

That is the period that they can legally stay in Cyprus unless they apply for a residency or work permit.

It is clear the Cyprus Government greatly appreciates the valuable contribution that UK Nationals have been making over the years to the Cypriot society.

It has taken steps to safeguard and protect theirs and their families’ residency, where they have already established their life in Cyprus, by implementing all the provisions of the Withdrawal Agreement on citizens’ rights.

If these persons exercised their residency rights before 31 December 2020 or were eligible to apply after 31 December, they can continue living in Cyprus with the same access to work, study, benefits, and public services now enjoyed.

They will have a right to reside in Cyprus without any time limitations.

Their passports will be checked at the entry/exit border checks but will not be stamped.

This provides reassuring news for expatriates regarding the protection of existing residency rights and benefits.

This article’s content is intended to provide a general guide to the subject matter; it does not constitute legal advice.

By Esme Palas

Source: Financial Mirror

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Property investment in 2021. A year of new opportunities?

There are reasons to be optimistic over property investment in 2021 and the UK market moving forward, according to Paresh Raja.

It’s safe to say that there will seldom be another year like 2020. It seemed like there was be no end to the unprecedented developments that caught businesses, consumers, and investors completely off guard. Of course, the primary instigator of said uncertainty was the Covid-19 pandemic; an ongoing crisis that governments worldwide are still clambering to tackle.

A few weeks into 2021, however, and it seemed as though we may soon be entering the period of post-Covid-19 recovery. As the UK prepares to come out from under strict lockdown, the rollout of the AstraZeneca/Oxford and Pfizer/Biotech vaccines signifies the beginning of a transition back to normality.

But how should investors be preparing for the “new normal”? Which asset classes are set for impressive performances over the coming 12 months, and which may struggle to adapt to the post-Covid-19 era?

Commentators and investment advisors remain divided on the answers to these questions. What I’m interested in, however, is how the British real estate market will perform in 2021.

As numerous assets struggled to handle the unprecedented uncertainty imbued into the markets due to Covid-19, British property was able to easily hold its value; and even post record gains.

In November the average price of a residential property in the UK experienced its highest level of growth seen since 2015, according to Nationwide signifying a marked end to the previous four years of property price stagnation. Again, according to the building society annual house price growth rebounded to 6.9% from 6.4% in January, prices were up 0.7% month-on-month, more than erasing the small decline seen in January.

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So, looking ahead, can the UK property market maintain this momentum? Can investors look forward to another year of gains for British property owners? Or could future unforeseen developments knock the industry off course, reversing the gains seen last year?

Life under lockdown

The UK’s third wave of Covid-19 resulted in a third national lockdown being declared at the beginning of 2021, concurrent with the UK’s departure from the EU. Such a state of affairs meant that, for the month of January at least, we were unlikely to see the high rates of transactional activity recorded last year. Although prospective buyers can still move home, the added logistical complications of doing so during lockdown means that a slight property market slowdown is likely.

I believe that there is a strong chance that 2021 may even surpass 2020 in positive property sector growth. After the current lockdown passes, I am confident that the high levels of activity seen last year will continue; further increasing the average price of UK property.

Investors should take note. In December, Rightmove predicted house price growth of 4% over the coming 12 months, citing the knock-on effects of lockdown as a motivator for prospective buyers. Having spent the majority of last year home-bound, they claim, UK homeowners will be desperate to move home to larger lodgings; a trend that Rightmove believes will easily offset any negative market developments. Based on my experience, I consider such an analysis to hold some truth. As such, I can’t imagine that any negative repercussions of the UK’s EU departure will seriously deter investment into British real estate to any measurable extent, at least in the short to medium term.

But, as with any potential investment, there are still risks involved. The aforementioned unprecedented market uncertainty in 2020 meant that many UK lenders had to withdraw their mortgage products from the shelves and imposed meticulous loan application review processes. Consequently, many saw elongated mortgage deployment times, and even increased rates of application rejections.

Those hoping to profit from any potential 2021 UK property price growth, then, would do well to seek out alternative lenders with in-house credit lines to ensure they can easily close on transactions. We have seen increased demand for our bridging loans from buyers, investors, and their brokers needing tailored, quick finance solutions for their property dealings. Unless traditional lenders successfully adapt to the new normal soon, I can only foresee this trend continuing.

SDLT changing soon

One of the reasons so many people were eager to purchase property last year was due to the stamp duty land tax (SDLT) holiday, which allowed them to knock up to £15,000 off the SDLT fee on any given property transaction.

This policy is now due to end on 31 March 2021, despite some calls from within the industry for it to be extended. As such, property professionals and commentators alike are expecting a surge in demand for property before this key date. The reason is simple: investors eager to capitalise on future UK property price growth will understandably wish to avoid the additional SDLT tax that property transactions after this deadline will incur.

For overseas buyers and investors, the incentive to complete on property transactions is doubly important due to another upcoming change to SDLT: the 2% overseas-buyer surcharge.

This new policy, due to be implemented on 1 April, will impose an additional 2% tax on property purchases for buyers who aren’t already UK residents. For said buyers, then, the difference in potential SDLT bills on transactions before and after these dates will be substantial; meaning that a rush to finish such transactions soon is expected. Given the tight deadline, property investors will prioritise lenders that can approve applications in good time and quickly deploy loans to successful applicants.

Investors should take note of the points highlighted above, as there are great reasons to be optimistic about the performance of the UK’s property market moving forward. If there are any key lessons that investors should take away from 2020, it is that you should never underestimate the resilience of bricks and mortar. Demand is clearly rife, which means we are set for another 12 months of busy marketing activity.

By Paresh Raja

Source: WI

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Revealed – where are the best places for property investment overseas?

Purchasing an overseas property can be daunting and complicated at the best of times, and this is even more so the case with the economic and travel uncertainty caused by the ongoing global pandemic.

According to the research team at online letting agency Mashroom, choosing the right location is the best place to start for successful property investment.

The agency has revealed which cities across Europe are the best cities for those looking to invest their money in real estate, with the capital of Norway, Oslo, maybe surprisingly landing at the top of the list due to its pro-landlord laws and high rental prices.

The city has the second-highest rental rates across Europe, with landlords charging an average of €25.30 (£22.82) per square metre.

For overseas buyers, London is often seen as a safe haven and it landed in second place in Mashroom’s list. The capital city has the third-highest rental rates in Europe, averaging at €20.10 (£18.13), and – something that many London landlords might dispute – the city also had the strongest pro-landlord laws out of all the cities in Europe, scoring 2 on the GlobalPropertyGuide.

Below, you can see the top 10 cities in Europe for property investment:

  1. Oslo
  2. London
  3. Paris (inside)
  4. Copenhagen
  5. Amsterdam
  6. Madrid
  7. Warsaw
  8. Prague
  9. Rome
  10. Brussels

For its report, Mashroom looked at the cities with the strongest pro-landlord laws in place and the average rental rates in each city, and ranked them accordingly.

Luxury resort releases its annual report

Sticking with overseas property and the news that Quinta do Lago, the exclusive residential resort situated in the Algarve, has released its annual real estate market report. Following careful evaluation from February 2020 to February 2021, the report revealed a significant rise in virgin plot sales, despite the challenges posed by Covid-19.

Sales at Quinta do Lago’s virgin plot development, San Lorenzo North, have doubled when compared to 2019 while enquiries have grown by nearly half (47%). Some 65% of the plot site is now sold with seven villas now fully built. Plot prices have reached an ‘impressive starting price’ of €3.2 million, up by 26% over the past seven years.

In addition, despite the pandemic, Quinta do Lago Real Estate witnessed a 52% increase in the number of leads this January, when compared with the start of 2020. The resort has also welcomed a 300% increase in sales at the beginning of this year.

“Our buyers invest in Quinta do Lago because they have trust in our luxury market and quality offering and currently, we are continuing to receive a steady stream of interest and enquiries,” Sean Moriarty, chief executive of Quinta do Lago, said.

“Our virgin plot sales at our exclusive development, San Lorenzo North, have been performing extremely well with a 100% increase in sales. This is the largest demand we have seen and ultimately comes down to flexibility – San Lorenzo North offers buyers’ the chance to build their own home tailored to their unique demands, which have never mattered more than in the last year. We are not anticipating any significant increases in property prices due to the impact of Covid-19.”

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Emerging property trends

Like many other parts of the world, Quinta do Lago has seen a change in buyer priorities and demands. Buyers are now more demanding when choosing a property due to the increased amount of time spent at home, with a second home no longer viewed as a lock-up-and-leave bolthole but a safe space for someone to base themselves more permanently.

Because of the huge increase in working from home, high-speed internet is now a necessity and the importance of being located near to a top international school is also on the increase.

People are now changing the way they buy and view properties, too, with buying remotely becoming far more commonplace. Quinta do Lago Real Estate reported fewer property tours pre-purchase (due to travel restrictions, one site visit will now close a deal as opposed to three).

Unsurprisingly, there has also been more demand for real estate technology and digital tools, for example 3D guided virtual tours, to give people a good indication of the home they are going to buy without actually having to be there.

When it comes to buyer nationality, the UK continues to be Quinta do Lago’s strongest market despite the twin challenges of Covid and Brexit.

There has also been growing interest from the domestic market, increasing from 11% to 20%, while other feeder markets include Ireland. Interest from Belgium, The Netherlands, Germany, Luxembourg and Switzerland is also continuing to grow.

Quinta do Lago has also found that the average age of buyers at the resort is falling significantly as it becomes a more family-focused and lifestyle destination. Since Covid, there has been a growth in enquiries from young families and three-generational families who are looking to move to a safe community with green, open space.

Lastly, the demand for the Golden Visa scheme remains low in this part of the Algarve – which will be disqualified from the scheme from the start of next year anyway – with more buyer interest in the tax benefits granted by Portuguese legislation, such as via the NHR scheme.

What are the investment opportunities?

Despite Covid-19, the team at Quinta do Lago say the last year saw fantastic investment opportunities at the luxury resort, with the estate utilising the quieter time to improve and enhance their offering.

This included a new real estate project, Wyndham Grand Algarve Residences, on which Quinta do Lago Real Estate has been appointed the sole local agent.

Popular seafood restaurant Casa do Lago also received a £1.25 million (€1.4 million) renovation and the golfing resort’s renowned South Course saw a £7 million (€8 million) investment. Following on from the launch of the Quinta Farm back in 2019, the resort has also announced a new sustainability strategy in the form of new measures ‘that will foster nature, conserve resources and support the community’.

With a property market that is continuously developing, Quinta do Lago boasts a variety of luxury homes including new builds, re-sales and rentals. All feature ‘top-of-the-range amenities and beautiful, high specification interiors’.

The area remains a low-rise, low density and ecologically driven region, consistent with its original masterplan, established more than 45 years ago.

To ensure this is preserved, careful building restrictions are in place which means new developments are limited to just 9% amongst 2,000 acres of terrain and three renowned golf courses, all situated in the protected nature reserve of Ria Formosa.

“Covid-19 is going to affect our view of modern living and more importantly, our priorities. British buyers are giving even more value to nature, green living, safe spaces, and low-density environments,” Moriarty added.

“The Algarve, and especially Quinta do Lago, lends itself perfectly to this new approach. Nestled within the privacy and security of the Ria Formosa nature reserve, we enable families, friends and individuals to live a clean, heathy and active outdoor lifestyle all year round. We are committed to providing people with an opportunity to invest in their lives, improve their quality of living and reconnect with the natural world and for these reasons, I think our future is very bright.”

It’s expected to be announced today by the Transport Secretary, Grant Shapps, that Portugal will be removed from the government’s red list of countries from which travel is severely restricted, as case numbers in the country have fallen swiftly – along with hospitalisations, deaths and patients in intensive care. The Algarve, for example, recently went nearly one week without a Covid-related death.

Portugal has been placed on the red list since it was launched in mid-January, largely because of its close relations with Brazil – source of a ‘variant of concern’. While international travel is banned in the UK until May 17, there is hope that travel between the two countries may now become easier this summer.

By Matthew Lane

Source: Property Investor Today

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Hong Kong Buyers Rush For Properties In The UK

There has been a significant increase in the number of people from Hong Kong buying property in the UK, estate agents report.

Research shows that 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 capital.

Some people are investing in the UK’s buy-to-let market, while others are making preparations to move to the UK to live.

A visa scheme to allow Hong Kong residents to come to the UK opened almost four weeks ago, with some 300,000 people expected to apply.

The visa, which is open to holders of a British National (Overseas) passport and their immediate dependents, will offer a fast track to UK citizenship.

The UK launched the new visa after China imposed a new security law.

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Those who apply and secure the visa will be able to apply for settlement after five years and then British citizenship after a further 12 months.

About 7,000 people from Hong Kong have already been allowed to settle in the UK since July, the Home Office said.

“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.”

Marc von Grundherr, director at Benham and Reeves, 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 the UK], 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.

By MARC DA SILVA

Source: Property Industry Eye

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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