As Covid-19 restrictions are relaxed, there’s been a directly proportional increase in the number of expat mortgage enquiries for UK property. While expat mortgage enquiries fell slightly during the pandemic – no doubt due to travel restrictions and uncertainty – the last three months have seen a steady increase as travel restrictions continue to relax.
Residential and Buy-to-Let Expat Mortgage Enquiries Grow.
‘There is always interest in the UK mortgage market from expats and foreign nationals’ says Stuart Marshall of Liquid Expat Mortgages. ‘However, there has been a clear boom in interest from UK expats recently.’
Figures from Knowledge Bank, the UK’s largest database of mortgage criteria, show that expat residential searches grew by 7% between 2020 and 2021. Similarly, searches for expat buy-to-let grew by 16% in the same period. ‘So, it’s clear that while expat interest in residential property has grown, it is UK buy-to-let that is once again the key area of interest for the expat community’ adds Stuart Marshall.
‘UK buy-to-let has always been a popular choice for expats given its relative stability as an asset class and the historically high returns that have been seen in the UK buy-to-let market for many years. But the inflated activity that is happening at the moment is showing, yet again, that UK expat buy-to-let mortgages are a shrewd financial decision. The recent uptick in interest in expat buy-to-let mortgages is most likely due to the incredible house price growth in the UK market, the volatility of the stock market and the slackening travel restrictions.’
Skipton International reports a similar rise in the expat buy-to-let UK mortgage market, noting a 60% rise in the number of completions by non-UK citizens compared to 2020 – another sign of the booming marketplace. This follows Skipton’s report that non-UK ownership on properties in the UK have tripled since 2010 – from 88,000 in 2010 to 247,000 in 2021. As well as this, Primis (one of the UK’s largest mortgage networks) reported a rise in expat lending during Q4 of 2021, indicating strong confidence in the UK expat buy-to-let mortgage market going into 2022. This is not surprising given the soaring rental demand in the UK at the minute, which is evident in the time it’s taking properties to let. In April 2021, it was taking an average of only 8.9 days to let compared to 31.9 days at the same point in 2019. The demand for rental properties is translating to fierce competition which, in turn, is feeding higher prices. It is a combination of these factors that has led Savills to predict that UK rental prices will rise by a further 19.9% in the next five years.
With rental demand still soaring and this demand placing upwards pressure on rental prices, it’s anticipated that enquiries for UK expat buy-to-let mortgages will only continue to grow throughout 2022 as UK expats try to take advantage of the hugely profitable marketplace.
‘Another potential reason that there is so much activity in the UK expat buy-to-let mortgage market is the numbers of borrowers that are looking to re-finance in order to accommodate the necessary green renovations that landlords need to make by 2025. The incoming legislation means that landlords will not be able to accept new tenants on a property if it has an EPC rating of a D or below. This has led 17% of buy-to-let landlords in the UK to conduct green renovations on their property. Many of these landlords are re-mortgaging in such a way that they can raise some additional capital to ‘green-proof’ their property, leading to even more activity in the UK expat buy-to-let mortgage market’.
More Products for Expat Borrowers.
In response to the uptick in expat mortgage enquiries, lenders have been adding more products to the marketplace in order to meet surging demand and to try and entice borrowers from the lucrative expat mortgage sector. ‘This area of the market is also predicted to grow as we move further from the pandemic’ says Stuart Marshall. ‘While the UK rental market is booming on the whole, London is still some way off its performance pre-pandemic. But, with relatively low prices in the capital and rental demand returning, expats are sure to be enticed by potential deals. Further, expats are continuing to look to areas outside the capital – such as the North West, North East, and Yorkshire and The Humber – which are offering strong rental yields and amazing capital growth potential.’
Despite the growing number of products in the expat mortgage marketplace, some expats still find it difficult to the find the right product for their needs. ‘Many expat investors don’t know what they need from an expat buy-to-let mortgage product. And many lenders will require specifics that the borrower may not be able to give with certainty. The most important thing when finding a UK expat buy-to-let mortgage product is the relationship with the lender. This is one good example of the importance of using an expert UK expat mortgage broker, like Liquid Expat Mortgages. Expat mortgage brokers often have a pre-existing relationship with a number of specialised lenders who can offer tailored products to make sure the exact needs of the borrower are being met.’
‘Brokers are also able to work closely with expats to make sure that they have everything they need to make the borrowing process go as smoothly as possible.’
Liquid Expat Mortgages
Unit F2, Waterfold Business Park,
Bury BL9 7BR
Phone: 0161 871 1216
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