This is part two of our two-part article, ‘How to Diversify a UK Expat Property Portfolio’. To read part one, click here.
Diversifying the Sub-Sector.
Property type can also be diversified by choosing a different sub-sector for the investment. The most popular types of sub-sector in recent times have been private, long-term lets; student accommodation; and holiday lets. ‘Long-term lets are a tried-and-tested investment and are the most popular choice for UK expat and foreign national investors. It’s for this reason that we usually suggest that UK expat and foreign national investors start here. However, holiday lets have also grown in popularity over recent years and are a great way to diversify a property portfolio that already contains some long-term lets. 2023 is looking like a great time to get a holiday let as the UK’s rural and coastal hotspots are set to have the biggest price drops amidst cooling demand for properties in these areas. 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. Holiday lets can also prove to be less pressured than conventional long-term lets as they typically make big sums in a relatively short window, namely during the spring and summer seasons. This can reduce the pressure on UK expat and foreign national landlords.’
Student accommodation is another excellent way to diversify a portfolio. It is often affordable and highly mortgageable, which is good news for UK expat and foreign national investors who want to add to the diversity of a portfolio while being conservative with their spending. There is also a guaranteed pool of renters in the student sector, as the UK’s student population is growing massively all the time, with 1.75 million full-time undergraduate students in the UK in 2022. The demand for property from the student population can’t be satisfied by universities, meaning that private sector investors have to make up the shortfall. The high prices that can be commanded for student rentals mean that UK expat and foreign national investors consistently achieve yields above 8% for these properties.
While diversifying the sub-sector the property is an important strategy for a successful portfolio, UK expat and foreign national investors are always to wise to consult the advice of an expert UK expat or foreign national mortgage broker who can help to navigate some of the pitfalls to securing a mortgage with their specific purposes in mind.
Putting Portfolio Diversification Into Practice.
‘While diversifying a portfolio might seem like a daunting task, it’s actually far easier for UK expat and foreign national investors to accomplish now than it was when we started Liquid Expat Mortgages’ says Stuart Marshall. ‘The advent of specialist UK expat and foreign national brokers has been a real game changer and made the process of investing in multiple properties far easier for UK expat and foreign nationals. An expert UK expat or foreign national mortgage broker can work with an investor to decipher their goals and help them to find the properties that best satisfy these. They are also able to unlock access to specialist products, deals, and rates which can improve the overall profitability of the investment, as well as helping with the process of finding a suitable way of managing the portfolio and minimising risk.’
‘For existing UK expat and foreign national investors who want to re-structure their portfolio to be more diverse, re-mortgages have been an incredibly powerful tool in recent years. Re-mortgages allow UK expat and foreign national investors to use the existing equity in their investment property to buy other properties. For UK expat and foreign national investors with an existing portfolio, re-mortgaging one or more properties is a good way to make further investments and add to the diversity of a portfolio. Even for UK expat and foreign national investors with one property, a re-mortgage can be an excellent way to use the equity they already have to start a diverse property portfolio which will pay dividends both now, and long into their future.’
Liquid Expat Mortgages
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Phone: 0161 871 1216
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