British buy to let properties back in favour with expat investors

Published:  8 Mar at 6 PM
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Over the past year, UK expat investors have returned to the home country’s buy-to-let marketplace, with interest fuelled by easier mortgages and the falling pound.

Two factors are in play as regards the increasing popularity of British buy-to-let properties with expat investors. Firstly, previous problems with obtaining mortgages whilst living overseas have eased, with several well-known offshore banks reopening their doors to those wishing to enter the buy-to-let market. Secondly, the fall in sterling since the referendum has been good news for those wishing to transfer foreign currency savings back home.

Reports reveal some 40 per cent of new expat investors in the market favour London properties for their growth potential, even although yields are lower. South of England properties attracted a further 25 per cent of prospective landlords, with the South West and North West of the country being preferred by 10 per cent. The rest of England and Wales was popular as a good buy-to-let bet by 15 per cent of new mortgagees, according to a survey by Skipton International.

Uptake of the new buy-to-let loans has exceeded expectations, with literally hundreds of UK expats deciding to enter the market. Highest yields are had in the north of the country, but house price increases are stronger in London and the South East. The survey revealed over a third of new investors saw the move as a long-term strategy, with one-fifth entering the market as part of a provision for retirement income and just six per cent citing capital growth as a reason for investing in buy-to-let.

Interestingly, some nine per cent of investors chose UK properties as they were unable to buy investment property in their countries of residence, or felt a lack of stability in those countries might eventually lead to financial losses. Rental returns were the attraction for around 10 per cent, and new investors felt the UK provided a safe, stable market for expat investors, only three per cent of whom cited security as a main reason for the purchase of UK buy-to-let properties.
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