Brit expats in Oz flocking to invest in build to rent apartments

Published:  7 Feb at 6 PM
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UK expats living in Australia are increasingly investing in British build-to-rent apartment complexes.

Build-to-rent developments are the latest trend for UK property developers, helped along by the British government’s coming out in favour of strongly supporting the sector by initiatives such as the Build to Rent Fund’s loans of 50 per cent of costs to construction companies. The fund was closed down two years ago, but private investors are now piling their money into this so-called multi-family sector formerly owned and developed by institutional groups.

The staggering rise in build-to-rent developments is controversial, especially in the capital, as developers are aiming to attract upscale buyers and investors, thus furthering the increase in charges for rental properties. London’s average property purchase costs and rentals are some of the highest in the world, and are now unaffordable for the majority of essential workers in the city. However, returns on investments in rental developments are around 4.5 per cent, higher than in many other investment opportunities.

London’s largest development of this type is ongoing in Wembley Park, close by the famous stadium, with Australia as well as other countries looking to adopt similar schemes. However, returns in Oz are stuck at around three per cent, with developers struggling to popularise build-to-rent as a viable investment for expats and nationals. As a result, Brit expats are turning to British developers as well as specialist mortgage providers in order to get a reasonable income during retirement.

Requirements for build-to-rent mortgages include 30 per cent deposits, annual incomes of over £45,000, employment with a multinational company and an already existing mortgage on a UK property. Some mortgage brokers will only lend to British expats if the purchase is via a limited company. However, prospective buyers should look ahead before committing themselves and their money, as London is now seeing an increasing number of almost empty new apartment complexes due to the majority of the city’s residents being unable to afford the rental charges.
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