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What’s Happening To House Prices In The UK? March 2022

house prices in the UK


Most of us expats decided to either rent out or sell our property in the UK, before the big move. But that was a long time ago. So much has happened over recent years which has sent the UK property market sky high! But with recent events and general turmoil affecting the UK and Europe for that matter, what should we expect for house prices in the UK in 2022?



Written exclusively for Expat Network by Jason Swan of Holborn Assets

In 2021, with everyone competing for space throughout the lockdown and also the stamp duty holiday, prices thrived across the UK. Wales saw an almost 16% price increase, the southwest at 11% and London at a respectable 4%. Rental prices increased by 8% on average, with some areas jumping up over 20%!

Not a bad year for homeowners, right?

This year has continued to see prices increase, with the number of new mortgage approvals at pre-pandemic levels and the supply of homes coming on to the market reducing by the day.

So, the question is, should I be buying property back in the UK in 2022?

Well, it’s not all about making money, as an expat there are other factors to consider before diving in feet first.

Firstly, you need to be clear on what you’re looking to achieve. Do you want to buy to rent, purely as an investment? Or, to have a second “base” in the UK where you might want to spend some time in the future?

I speak to a lot of expats looking to “invest” in UK property, who find it difficult to agree on what’s important to them, when getting into the detail.

If the investment potential is what drives you, with the right help, the process can be very easy and very profitable. There are companies out there that will do the heavy lifting for you, whilst you never need to leave the beach. That includes property hunting, legal work, structural surveys, tenant checks and property management without you lifting a finger.

You don’t need to worry too much about location and what the colour the carpets are, as long as the property has a great rental yield and good potential for increase in value.

Now, if you’re buying for a second home, this is purely a personal choice, and the investment potential plays a much smaller part in the decision making. This time the style of curtains and the neighbours next door might play a slightly more important part. So, to buy a place for you, book some flights home, line up some hot properties and jump on the first one that gets you excited!

Whichever you decide on, the next step is considering how to pay for it. Now, if you’re fortunate enough to not need a mortgage, the choice of using savings, selling investments or drawing from your pension may all be on the table. You should seek financial advice from an expert that is familiar with the rules in both the UK and where you live abroad. You should also consider if purchasing with cash is the best way to maximise your profits. With borrowing still relatively cheap, you may wish to consider leveraging your capital and making it work even harder.

Mortgage lending for expats has become increasingly difficult however over recent years. The number of expat lenders is reducing with the fees/interest payable noticeably higher than lending for UK residents. The Bank of England’s base rate rise to 0.25% has been reflected by mortgage lenders across the board. A further rise to 0.5% is expected in the middle of the year.

Subject to your circumstances, you will find the minimum deposit needed as an overseas buyer is 25%, as high as 40% with some lenders. This aside, the mortgage may free up capital for you to invest elsewhere.

Mortgage underwriting is relatively relaxed, on the basis that the property will comfortably rent for a figure in excess of the mortgage payments. The lender will have an interest in your personal earnings, with some simply checking there is a minimum household income. Best practice is to approach your bank as well as an expat broker, who will quickly assess your personal situation and show you the rates and lenders available.

Before viewing any properties, be sure to request an agreement in principle from the mortgage broker. This will put you in a strong bargaining position when negotiating with the estate agent. Remember, estate agents will prioritise buyers that they feel confident with, that can proceed quickly and without hassle. In such a competitive marketplace, it’s always a good idea to get the agents on side, to let you know of new properties before they’re listed online!

If you’re looking to build a portfolio of property in the UK, you should consider doing so under the name of a limited company. This opens the door to increased tax efficiency, allowing mortgage interest to be deducted from the tax bill and flexibility to choose between repaying a director’s loan or taking dividends. You’ll also have a lower capital gain % to pay, as you look to sell shares rather than the bricks and mortar.

In summary, everyone should have some property in their portfolio. Regardless of short-term changes, we can be sure that prices will always increase over the long term. The question is where, when, what and how to buy.

For any queries on the topics covered in this article, please feel free to send your questions to Jason.swan@holbornassets.com

Happy house hunting!