Continued Surge in Demand for Expat Mortgages, Reports Broker

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Expat mortgage specialists deVere Mortgages has reported “a continuing surge” in demand for mortgage advice from overseas-based clients looking to buy property in the UK.

Managing Director, Mike Coady, says that there has been a month-on-month increase in mortgage enquiries from expats and overseas buyers since the 2015 launch of deVere Mortgages and “in the first quarter of this year, we’re experiencing a continuing surge.”

According to the firm, more than 70 per cent of the 2016 enquiries are from foreign nationals or British nationals living and working abroad, 60 per cent of whom currently reside in Switzerland, Spain, Abu Dhabi, Dubai, Qatar and China.

“In the Middle East alone, we report a 60 per cent month-on-month rise in enquiries since the beginning of 2016, predominantly to beat the UK’s stamp duty surcharge for buy-to-let investors and second homeowners coming into effect on 3rd April,” says Mr Coady.

“As a result, deVere held two informative seminars in Abu Dhabi and Qatar in February to explain the various benefits of UK mortgages, factors to take into account before applying and a detailed question and answer session for the prospective buyers.”

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Reasons for spike in demand

There are three key factors driving expatriates to pile into UK property, says deVere Mortgages.

“First is that interest rates have been historically low for such a long period of time, that it is widely thought that very low interest rates are now the new normal.

“With headline CPI inflation back to zero, it is perceived that a UK rate rise is unlikely until at least the second half of next year at the earliest – and even then they will remain very low and not expected to return to pre-2008 levels,” explains Mike Coady.

“Second is the strong UK property market outlook and high rental yields, which is driving demand.  This is compounded by the continual undersupply of properties in key areas such as London, the South East of England and Manchester.”

The third factor fuelling “the surge of mortgage enquiries” at deVere Mortgages is the possibility of Brexit.

“Since the campaigning has now really got underway in a big way, we have noticed a significant increase in the number of people enquiring about mortgage applications.

“There has been a 30 per cent week-on-week jump in the number of enquiries.

“We attribute this uptick largely to the fact that the In Campaign has been keen to point out, and effective in doing so, that mortgages could become more expensive if Britain leaves the European Union following June’s referendum.”

Expats need specialist advice

Consequently, as this surge in demand from expatriates shows no signs of slowing down, Mr Coady explains: “A large proportion of British expats will ultimately return to the UK at some stage and, understandably, would like a home to go back to.

“However, increasingly stringent rules coupled with the fact that British expats and foreign nationals are often deemed ‘high risk’ by many UK lenders, means specialist mortgage advice from an organisation with strong alliances with lenders is required.”

Yet, despite typically earning higher salaries than their contemporaries in the UK, often due to working in a tax-free or low tax environment, many expats have pushed back purchasing property due to more immediate issues, until now.

Indeed, deVere Mortgages, which works with “more than 200 UK and international lenders”, says it has “secured mortgage agreements for 95 per cent of clients living and/or working overseas over the past 12 months.”

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