Upper Hand For Expats In UK Buy To Let Market After Lockdown

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Upper Hand For Expats In UK Buy To Let Market After Lockdown

What will happen to the UK Buy To Let market as we come out of lockdown? Expat Mortgage broker, OffshoreOnline argue that expats in areas that recover more quickly from the pandemic will be well placed to take advantage of the later recovery of the UK economy.

With much of the UK buy to let property market having been put on hold now for over seven weeks, thoughts are finally turning to what might happen when movement restrictions ease and life begins to return to the new normal. Expat buy to let investors in particular are eying some attractive opportunities, thinks expat mortgage broker OffshoreOnline.

The property market could, on the face of it, recover quickly. Some of the main reasons it has ground to a halt are practical– with few viewing or valuations taking place, it has simply been harder to arrange sales or close deals. Despite this, many UK expat mortgages have manged to complete, as smaller, flexible lenders switched to desktop valuations and estate agents began testing virtual tours.

Expat buy to let mortgage broker OffshoreOnline has seen smaller lenders switch smoothly to home working, and desktop valuations, with only minor interruptions to some aspects of service. Guy Stephenson, a director, comments, “The expat mortgage market is a specialist one, with cases usually underwritten on an individual basis. Volumes are much lower, so the specialist lenders can and do offer a highly personalised service. It has proved to be much easier for these lenders to adapt under lockdown than for the higher volume UK home loan sector.”

Nevertheless, the great unknown which has been stalking UK domestic lenders is the affordability of future mortgage obligations – put bluntly, post lockdown how many in the UK will still be able to afford a mortgage?

With Hong Kong, the Far East and Middle East much further down the line with their own domestic recoveries, OffshoreOnline believe expats will have a significant advantage over domestic buyers, as many are already back to work and earning well again.

Some high salaried expat centres have hardly been affected by the pandemic. According to the John Hopkins Coronavirus resource centre, Hong Kong had reported just over 1000 cases and four deaths, whilst the UAE tally stood at just over 16,000 cases and 165 deaths at the end of the first week in May. The UK domestic figures dwarf these, suggesting the impact of the pandemic and lockdown on UK domestic buyers of buy to let properties is likely to be far more significant than for the expat buy to let investor.

“In many of the key expat centres such as Dubai, Hong Kong and even China, life is likely to return more quickly to “normal,” once again highlighting the appeal of these markets to UK property sellers. These markets are wealthy, sophisticated and highly developed and they move to a different economic rhythm and are less affected by the economic slowdowns that can and do affect Europe and the UK,” said Stephenson.

Following the last UK Base Rate cut, expat buy to let mortgages are widely available from rates as low as 2.49%.

Moving Abroad Checklist

Initial Considerations

Will your partner be travelling with you?

If so, what will they be giving up in your present home and will they be able to continue with their career in your new home? You will need to check whether a separate visa is required for your partner to work or if your visa gives that right. If they are unable to work you will need to decide on the effect on your finances and what alternatives are available to give a fulfilling life (home business, training, voluntary work).

Are you taking family with you?

Moving with family raises many exciting opportunities, but also can create challenges. The HSBC Expat Explorer survey indicates that expat kids can take six months to settle in to their new country (see article). Getting young or even older children to prepare to move and leave their friends and family behind can be a challenge and should be thought through.

The options for education is another area that needs to be thought through.

Moving your child to a new country with a different education system can be a great opportunity to broaden their experience, but if they are close to key exams the timing can make this inadvisable. If you do take your family with you, it is important to decide between joining the local school system or choosing an international school.

Where will you be living?

Whether you will be living in a house or apartment, furnished or unfurnished, these decisions will affect what you need to take with you. The time you are planning to live overseas will also affect whether you should leave your property at home empty, rent it out or sell it. See the article Sell, Store or Ship.