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Investing in UK property from abroad has been a common wealth management strategy for UK expats and foreign nationals for a while – but the reasons to do so have never been more compelling. Thanks to specialised lenders offering UK expat and foreign national mortgage products alongside clever financial strategies, UK expats and foreign nationals can secure deals that rival – or even surpass – domestic offers. In this article, Stuart Marshall, CEO of Liquid Expat Mortgages, explores the key advantages that make buying UK real estate a savvy move for overseas investors.
Competitive Non-Resident Rates.
‘UK expat and foreign mortgage rates are now incredibly competitive’ says Stuart Marshall. ‘Gone are the days of exorbitant rates for non-residents. It’s clear now that many lenders recognise that UK expat and foreign national investors are a very lucrative portion of the market and need to be catered to. Non-resident mortgage rates typically range between 3.5% and 6%, which mirror standard UK deals. The most important thing will be to have a solid deposit (usually 25%–40%) or a verifiable income abroad. As long as borrowers can prove these things, lenders will treat them favourably – especially specialist lenders, who are used to dealing with the specific needs of UK expat and foreign national borrowers.’
It’s important to remember that expat earnings count. Overseas salaries and bonus payments are just as valid as domestic ones and will add huge strength to buy-to-let mortgage applications. Some lenders will even accept deposits held in major foreign currencies like USD or EUR.
Higher Borrowing Power with JBSP.
‘One good avenue for UK expat and foreign national investors to explore is Joint Borrower, Sole Proprietor (JBSP). JBSP is something that we’ve seen crop up more and more in recent years with our customers. It allows UK expat and foreign national buyers to apply for a mortgage with a co-borrower’s income – essentially doubling borrowing muscle whilst keeping the title in one borrower’s name alone.’
This can be ideal for UK expat and foreign national investors who live abroad but whose borrowing partner, family member or friend remains in the UK. ‘It’s a structure that is gaining popularity as it maximises overseas earnings and helps UK expat and foreign national investors to better compete in a tight market.’
Tax Efficiencies for Non-Residents.
Non-resident status can also bring meaningful tax savings. For example, tax benefits of the UK expat or foreign national’s country of residence can be very beneficial. One common instance of this is for overseas buyers who work in the UAE, where workers are not charged income tax. Here, workers are earning high incomes and the lack of income tax increases both their borrowing and buying potential in the UK. To put this in perspective, compare a UK worker earning £80,000 compared to a worker earning £80,000 relative pay in the UAE. Without tax, the UAE worker will take home the full amount. However, the UK worker will take home around £56,000. This is a substantial difference when it comes to borrowing.
If the property is held in a limited company, the tax benefits get even better. Limited companies are increasingly becoming the main investment vehicle for UK expat and foreign national investors and it’s precisely because of the tax benefits. Limited companies offer incredible potential for UK expat and foreign national investors, especially in the wake of Rachel Reeves’ first budget, which has caused UK expat and foreign national investors to rethink the tax efficiency of their investment with changes to capital gains tax and inheritance tax.
It’s for these reasons that 2024 was a record year for limited company buy-to-let incorporations, with 60,000 new buy-to-let limited companies established and 70-75% of new buy-to-let purchases going into a limited company.
Currency-Hedging and Stress-Tested Loans.
One thing for overseas investors to consider is the currency risk that they face in investing in UK property. However, lenders offer a number of solutions for this risk, including forward contracts which allow UK expat and foreign national investors to lock in favourable exchange rates for deposit transfers. Further, stress-tested mortgages help to protect against the potential dangers involved in overseas investor borrowing by assuming a 10-20% drop in GBP when assessing affordability. Consequently, even if sterling weakens, overseas salary will retain its UK-value strength, reducing repayment worries.
Leveraging Their Overseas Edge.
UK expats’ and foreign nationals’ overseas earnings – be it savings, salary, or family support – grant them a unique advantage in the UK property market. From competitive non-resident rates and higher borrowing power to tax breaks and currency hedging, the benefits stack up to form a compelling case for UK property investment. Further, UK property is an asset class which has proved itself to be a strong performer and incredibly resilient. It is an excellent option for all different types of UK expat and foreign national investors: whether it’s those seeking a home to return to in the future, or those building an investment portfolio. By utilising expert advice from specialist brokers, exclusive mortgage products, and leveraging their ‘overseas edge’, UK expat and foreign national investors can turn UK property into a profitable, long-term asset.
Contact Liquid Expat Mortgages today for a free consultation and find out how to start investing in UK property.
Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Rd,
Haslingden, Rossendale
BB4 5HU
Phone: 0161 871 1216
www.liquidexpatmortgages.com
Any media enquiries please contact Ulysses Communications.
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+44 161 633 5009
Disclaimer:
The content of this article is provided for informational and illustrative purposes only and is not intended as financial, legal, or tax advice. Liquid Expat Mortgages is authorised and regulated by the Financial Conduct Authority (FCA) to provide mortgage and protection advice. However, the FCA does not regulate certain investment mortgage contracts, and any views expressed herein may include unconventional or contrarian perspectives that do not necessarily reflect standard industry practices or regulatory guidance. Your home or property may be repossessed if you fail to keep up repayments on a mortgage or any other debt secured against it. We are not authorised to provide legal or tax advice, and we strongly recommend consulting a qualified professional for personalised guidance tailored to your circumstances before making any financial decisions.
