For expats, when it comes to money, planning ahead is essential so that your financial future remains stable.
There are several effective ways to get prepared, which include everything from taking out a suitable life insurance policy for expats, moving your pension into an overseas scheme so that you get tax advantages on your retirement savings, and making smart decisions on investment opportunities so they will provide worthwhile returns in the future.
One major investment opportunity that increasing numbers of British expats are keen to be a part of is the buying of UK property to then rent out to tenants – AKA buy-to-let.
New figures from Liquid Expat Mortgages show that enquiries from expats seeking buy-to-let mortgages were up by 90% in 2017 when compared with the previous 12 month period.
There are a number of reasons why the UK has become popular with landlords living overseas. Firstly, the weaker pound has made buying British property a much more cost-effective option compared to buying in other countries. (Property prices have largely been unaffected by the Brexit result but this has meant there are fears that some British expats may face a shortfall if they find they need to sell their overseas home and are forced to buy property again in the UK.)
Also, paying off a mortgage in the UK is the cheapest it’s ever been. Interest rates have been at an all-time low recently, only rising for the first time in 10 years at the start of November when the Bank of England’s Monetary Policy Committee (MCP) increased rates from 0.25% to 0.5%. The low interest rates have made the British property market a very attractive investment opportunity for those living overseas, but whether this increase from the MCP will impact the number of expats wanting to invest in buy-to-let property remains to be seen.
The managing director of Liquid Expat Mortgages, Stuart Marshall commented that until recently very few offered mortgages to expats, but this has now changed as the demand has increased.
“Many expats are keen to keep a foothold in the UK and the yields on buy-to-let properties in the UK are far ahead of those offered by other countries,” Marshall said.
He also noted that the rise has happened even though the UK government has introduced measures to discourage people making buy-to-let purchases, such as the second home stamp duty, which was devised to give first-time buyers less competition in the market, and increased stress testing on buy-to-let mortgages.
If you’re intending to join the growing number of expats experiencing the benefits of owning a buy-to-let property in the UK, there are some important considerations you should make first.
Purchasing a buy-to-let property is a significant investment that will play a big part in your financial planning portfolio, and it’s one you shouldn’t enter without proper guidance from a financial adviser.
Blacktower financial advisers can help you make the most important financial decisions you’ll face in your life. We can offer expert advice in a number of matters to help you prepare for the future, including investment advice as well as offering advice on pension planning and life insurance for expats. Speak to an adviser today.