Rental competition is contributing to sky-high profits for existing and would-be UK expat and foreign national investors, with an average of 11 renters pursuing each property that’s available to let.
Rental Market Competition.
The fierce competition that has been taking place in the rental market in recent history is going nowhere as those looking for rental properties face reduced availability because of the numbers staying put. ‘Huge numbers of renters are choosing to stay in their current property’ says Stuart Marshall, CEO of Liquid Expat Mortgages. ‘People are looking for stability and security wherever they can in a turbulent economic and political climate. Accordingly, many renters are taking a ‘better the devil they know’ attitude to their current property, which has meant that 75% of lettings agents have seen a rise in renters renewing their contracts. But despite the numbers staying where they are, there remains a great desire amongst many to secure a rental property as high house prices and rising interest rates continue to stop would-be buyers from getting on the ladder. This is causing a huge demand for rental properties.’
But the demand for rental properties is not the only cause of the rental market competition. The rental market is also suffering from a lack of supply. The number of homes available to rent has been falling for a few years as landlords have been victim of a number of tax and regulatory changes that have eaten into their profits. For a number of landlords, the incoming rules about EPC ratings and the increased mortgage rates have proved to be the last straw. Because of the high asking prices for properties at the moment, landlords unwilling to conduct green renovations or those whose profits can’t withstand the interest rate rises have chosen to ‘cash out’. With so many properties moving from the rental sector to the private residential sector, there are far fewer properties available to rent. Because of the high demand and low supply, there are currently an average of 11 renters pursuing each property available to let. This fierce competition is, in turn, contributing to 82% of lettings agents reporting rental rate increases.
What Does Rental Market Competition Mean for UK Expat and Foreign National Investors?
‘Rental market competition is always good news for UK expat and foreign national investors’ says Stuart Marshall. ‘For existing owners of UK expat and foreign national investment properties, the rental competition means that they are likely to see bigger profits from their investment as people continue to fight over this highly limited asset. For existing UK expat and foreign national investors who are struggling with rises in their mortgage rate or with the prospect of conducting renovations to meet the new EPC rating requirements, re-mortgages present an excellent proposition. With the UK expat and foreign national mortgage market growing all the time, there is likely far greater mortgage choice, especially if investors have an improved LTV on their property – which is likely if they have managed their investment properly. Further, re-mortgage products can also be used to raise funds to conduct a green renovation. This will both ensure future profits and make sure that the property will remain mortgageable so that investors can cash in on the capital growth of the property.’
‘For prospective UK expat and foreign national investors, the investment proposition is as good as it’s ever been. The competition for buying property in the UK will lessen as the number of potential buyers falls because of climbing mortgage rates and the higher cost of living. The number of properties available to buy is already climbing, as is the average length of time it’s taking for property to sell. This means that UK expat and foreign national investors will be coming into a slower, less competitive marketplace and will be better positioned to pick up a bargain. Once they have found the right property, new UK expat and foreign national investors will likely be able to command high asking prices as the competitive rental market will support high pricing. They are also likely to experience short void periods and tenants committing to long contracts. This is the perfect position to be in when starting an investment journey as it means that new UK expat and foreign national investors will see quick returns on their investment.’
‘There are a great range of UK expat and foreign national mortgage products available,’ says Stuart Marshall. ‘And many of these products are sporting lower rates than domestic mortgage products. An expert UK expat or foreign national mortgage broker will be well positioned to advise UK expat and foreign national investors on the best deals available, as well as being able to help decide on the best investment strategy for their specific purposes.’
Liquid Expat Mortgages
Ground Floor, 3 Richmond Terrace,
Phone: 0161 871 1216
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