Brexit encouraging UK expats to consider buying British property

Published:  20 Apr at 6 PM
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British expats living in Europe as well as those working elsewhere in the world and looking for suitable property investments are having to look harder and longer to get the best mortgage deals.

Reports that increasing numbers of UK expats living in EU member states are researching the availability and pricing of British properties have brought into focus the difficulties of finding, conveyancing and financing a property purchase from overseas. The increasing likelihood of a hard Brexit making it impossible to remain in Europe and the difficulty of freeing up capital invested in overseas property in a falling market will, it seems, put many thousands of expats between a rock and hard place.

Sterling’s weakness since the Brexit referendum has encouraged expat professionals working outside Europe to invest in buy-to-let properties at a 15 per cent discount. Now that the spectre of losing freedom of movement as well as reciprocal heathcare is creeping ever closer, expat investors are being joined by those attempting make sure they’ve a home to go to in the UK post-2019. However, expats living outside the UK have more hurdles to jump in order to secure their future.

Those attempting to purchase British property whilst living overseas are expected to raise a much larger deposit than UK-based applicants, higher arrangement fees and interest rates are common and the hassle of first finding a suitable home and then having to deal with conveyancing from a distance can be tricky at best, even with the internet. The choice between the various types of mortgage available to expats has to be an important part of any relocation plan, and will depend on employment status and future financial needs.

Obviously, those who choose a straight repayment mortgage will have higher monthly payments than those taking out an interest-free loan, but will be able at some time on the future to own their property free and clear, no matter what their financial situation. However, early payments are mostly interest, so if moving again or repayment once an overseas home is sold is on the cards, it may not be such a great idea.

The upside of an interest only loan is, again obviously, lower monthly payments but, at the end of the mortgage term the full amount needs to be repaid. Planning ahead for this eventuality needs care as regards other investment plans in order to avoid the shock of a large shortfall or equally large increase in your monthly payments. Once you’ve decided on which loan is best for you, you’ll be offered a choice of six alternatives as regards interest rates. At this point, you might like to consider taking professional advice, especially considering the present unstable political situation.
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