In the last 12 months, over four and a half million homes appreciated by over £30,500 – the average UK salary. ‘While this is not a yearly occurrence’ says Stuart Marshall ‘it’s an example of why so many investors choose to put their money in UK property. It’s typically very low risk, is bound to appreciate over the term of a mortgage, delivers strong rental yields and – in some cases – the capital growth is huge. Last year was obviously an anomaly for many reasons but the fact that one in five homes earned more than the average UK worker shows that UK property is a highly desirable asset.’
For Prospective UK Expat Landlords.
‘If you’re a UK expat looking to invest in UK property, then the last twelve months just serves as an example of why you should get involved’ says Stuart Marshall. ‘Of course, the last twelve months have not been the norm, but UK properties are still highly desirable in the rental sector and are also likely to grow in value. However, you still need to make sure that you’re getting the right property and in the right area.’
‘The areas that are usually of interest to potential buy-to-let UK expat property owners are the North West, Yorkshire & the Humber, and Wales. These are the areas that come up time and time again in our many discussions with prospective UK expat and foreign national buyers. The reason for this is typically to do with the incredibly strong rental yields that we frequently see in such areas. However, when you look at the percentage of properties that have risen by the average salary in a regional fashion, it’s easy to see another reason why these areas should continue to be of interest.’
The area which has seen the greatest number of homes rise by a value greater than the average salary is the South East, where 28% of properties have risen by the average salary of £32,900. This is followed by London, where 24% of properties have risen by more than the average salary of £37,300. In contrast, the North west has seen 18% of properties rise by the average salary of £27,800, Yorkshire and the Humber has seen 17% of properties rise by the average salary of £28,700 and Wales has seen 22% of properties rise by the average salary of £28,200. But there is more than meets the eye here…
‘While the above numbers for the North West, Yorkshire and the Humber, and Wales might not seem as impressive as the numbers for other areas of the country, there is another important factor at play. This factor is affordability. Let’s again compare these areas to the South East and London while also taking affordability into account.’
‘While the South East and London both have a higher number of homes rising by more than their respective regional average salaries, the average property value in these areas is also far higher (at £379,000 and £521,000 respectively). Meanwhile, the average property value in the North West, Yorkshire and the Humber, and Wales stands at £189,000, £183,000 and £188,000 respectively. Obviously, the increased affordability of property in these areas contributes to their strong rental yields and accessibility for potential UK expat buy-to-let investors. However, this increased affordability also has great implications for the capital growth of properties in these areas.’
Although more properties have increased by the average salary in the South East, the higher cost of property means that these homes have increased by around 8.7% of the average price of a property. Similarly, if a property in London has increased by the average salary, then the average priced property will have increased by 7.2% of its total value. In contrast, if a property in the North West has increased by the average salary, then this increase will account for 14.7% of the average property value in that region. The same calculation in Yorkshire and the Humber and Wales accounts for 15.7% and 15% of the average property values respectively.
‘So, while fewer properties have increased by the average salary in these areas, they remain far more affordable and those that have increased by the average salary have risen by a greater percentage of the total value of the property. Combine these factors with the consistently strong rental yields and it’s clear to see why these areas are incredibly popular amongst UK expat investors.’
For Existing UK Expat Landlords.
For existing UK expat and foreign national landlords, selling your property at this uncharacteristic high could be a shrewd financial decision. ‘Selling your property now – particularly if you’ve had it for a long time and have a low amount outstanding on your mortgage – could be a great decision for some UK expat and foreign national property owners. You could take this money and re-invest it in a new growth area or wait for the market to cool off again if you’re not reliant on the rental income. Alternatively, you might have a portfolio of properties and take the opportunity to cash in now and put the money away for your retirement or as a part of your children’s inheritance. If you have a type of property that has become particularly popular over the course of the pandemic, you may want to sell-up and diversify your assets. There are lots of options here if you’re an existing buy-to-let property owner.’
Liquid Expat Mortgages
Unit F2, Waterfold Business Park,
Bury BL9 7BR
Phone: +44 (0) 161 871 1216
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+44 (0) 161 633 5009