2023 is likely to be an excellent time for UK expat and foreign national investors to invest in UK property. This is as a result of a number of factors including a competitive rental market, more affordable house prices, and lower mortgage rates. However, there are always ways to maximise the quality of an investment venture. Liquid Expat Mortgages look at some of the key considerations and trends for investing in 2023.
Looking for a Holiday Let? 2023 Could Be the Time.
For UK expat and foreign national investors hoping to invest in a holiday let, 2023 could be a good time as it’s likely that coastal and rural hotspots in the UK will see some of the biggest price drops. This is as a result of cooling demand for properties in these areas, as the ‘search for space’ that informed so many pandemic price rises seemingly winds to an end. ‘Holiday lets have become a massive trend in the last couple of years’ says Stuart Marshall. ‘The pandemic really started a ‘staycation’ trend which has continued ever since, so investors have been keen to capitalise on domestic holidaymakers with holiday let investments. It’s not surprising as this type of property can be incredibly lucrative, earning the equivalent of a year’s income from a long-term let in a very short space of time. However, holiday let hotspots have proved to be some of the more expensive properties for investors, as rural and coastal areas appreciated by huge sums when home-workers moved further from their workplaces, looked for more space, and proximity to green spaces.’
‘The inflated prices of rural and coastal areas have meant that many UK expat and foreign national investors hoping to invest in a holiday let property had their hopes dashed. But, with the winds of change already blowing, UK expat and foreign national investors looking for a holiday let could be in luck in 2023. While price growth has been slowing generally, the greatest slowdown in demand and sales has been in rural and coastal areas such as the Lake District, Wales, and East Kent. Meanwhile, holiday lets are still lucrative with the staycation trend continuing, meaning that discerning UK expat and foreign national investors could pick up a bargain and profit from the holiday let market.’
Flats Offer Excellent Value for Money.
‘We were having lots of conversations with UK expat and foreign national investors about flats in 2022. As the year went on, this type of property just seemed to fare better and better, and this will continue in 2023. For one, flats are a very popular type of property in the rental market at the moment, with renters looking for smaller footprints, more modern builds and energy efficient spaces to offset the effects of high energy prices. Another thing that makes flats particularly attractive for UK expat and foreign national investors is that they are excellent value for money. As a result of the search for space, house prices fast outstripped the house price growth of flats, which consequently now present much better value for money. To put this in perspective, the average price of a flat across the UK (excluding London) is 2.1 times lower than a house. This is the highest the difference has been in 20 years.’
‘The relative affordability of flats means that UK expat and foreign national investors can benefit from a buoyant rental market and take advantage of the demand for rental flats without incurring huge costs. This is especially true when investors correctly utilise one of the many great UK expat and foreign national mortgage products available at the moment. However, it is also this relative affordability which will make flats popular with consumers, as domestic buyers look towards cheaper options to cope with the cost of living and higher mortgage rates. This will mean that flats are likely to become one of the more competitive areas in the UK property market in 2023 and there is likely to be upwards pressure on the price of flats due to demand. The competition for flats is a double edged sword, as it will make them more difficult to secure for UK expat and foreign national investors. However, it will also mean that UK expat and foreign national investors who do purchase a flat will benefit from higher capital growth. Further, there are many options for flats, with new developments cropping up all the time and off-plan purchases also proving a great tactic for many.’
Take Another Look at the (Affordable) City Centre.
As the popularity of rural and coastal areas wanes, demand is turning back towards urban areas – namely affordable cities. The main factor is affordability as years of house price growth combine with heightened mortgage rates, forcing consumers to look towards cities, which have been relatively depressed markets over the last few years. ‘From an investment point of view’ says Stuart Marshall ‘we have been singing the praises of cities for a while with UK expat and foreign national investors. The reason for this has mainly been for the popularity of city centre properties in the rental market. However, city centre properties now also present a great proposition for UK expat and foreign national investors looking to invest for capital growth. While city centres will see big growth in general, affordable cities are the ticket to the highest capital growth profits. Jobs are increasingly being created in these areas, which stands them in good stead for long-term profitability and also for rental yields, as they are likely to be attractive for renters too. These areas also have good commuter links into big employment centres like Leeds, Manchester and Birmingham. This is why areas like Bradford, Crewe and Coventry currently have some of the highest levels of demand in the UK (60.7%, 47.3% and 46.8% respectively).’
An expert UK expat or foreign national mortgage broker can help UK expat and foreign national investors to identify which areas will be most likely to appreciate as well as which will be profitable in the rental market. An expert UK expat or foreign national mortgage broker can also help to secure exclusive deals from lenders, ensuring the best possible mortgage rates.
Liquid Expat Mortgages
Ground Floor, 3 Richmond Terrace,
Phone: 0161 871 1216
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