Buy to let loans even more popular with UK expat investors

Published:  9 Aug at 6 PM
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Following on from last year’s considerable increase in expat applications for buy to let mortgages, 2017’s total to date is even higher.

Over £500 millions’ worth of enquiries for UK buy-to-let mortgages have been made to one lender since the beginning of this year. The amount represents a 130 per cent increase on the same period in 2016, with 25 per cent of enquiries coming from UK expats working in high-salaried locations. Brits in the UAE accounted for a quarter of the total, with 12.5 per cent from the USA, Hong Kong at nine per cent, Singapore at 7.5 per cent and Switzerland at six per cent.

According to the lender, enquiries from all the top five countries represented double the numbers over last year, in spite of the UK government’s cancellation of interest break relief. The swinging increase in interest seems to be based on the need for secure, long-term investments in the home country, a trend seemingly in reverse of the general feeling amongst UK-based landlords.

By the end of 2016, onshore banks offering buy-to-let loans to British investors were seeing a sharp decline in applications, mostly fuelled by more stringent lending conditions. New government rulings included the removal of tax breaks on mortgages and the scrapping of tax relief on interior repairs and renewals as well as a new three percent stamp duty surcharge on properties bought as second homes. The new rules were brought in at around the same time as a severe shortage of affordable rental properties hit the market.

The government’s stated intention to provide a ‘level playing field’ between investors and home owners seems to have missed its mark, and it’s unclear whether an increase in expat-owned buy-to-let properties can correct the balance.
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