property


British expats seek to capitalize on ‘hot’ buy-to-let market in UK

by Ray Clancy on June 24, 2015

British expats, particularly those living in the United Arab Emirates, are taking advantage of rising rents in the UK to purchase investment properties.

London is the most popular location due to a high demand for buy-to-let rental properties and good yields for landlords, but expats are also looking outside the capital city.

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London is the most popular location due to a high demand for buy-to-let rental properties

Offshore bank Skipton International has reported a lot of interest from expats living in the Middle East since it launched a range of mortgages for British people living and working abroad who want to purchase a buy-to-let property.

The surge in demand comes at a time when the latest index data from UK-based property management agency Homelet, shows that UK rental prices for the three months to April rose by 10%.

But the figures also show that currently the regions are outstripping London in terms of rental growth with locations such as the West Midlands, East Anglia and South West all recording higher rent increases than London in the three months to April.

‘For the first time we are seeing rent price growth rates in Greater London converge with those across the rest of the UK. During 2014, London rent price growth far outpaced other regions but in 2015 we are seeing the emergence of a different pattern,’ said Martin Totty, chief executive officer of Barbon Insurance Group, parent company of HomeLet.

‘What this tells us is that the private rental market is experiencing demand nationwide and that it is not simply a London phenomenon that increasing numbers of people are requiring privately rented property,’ he explained.

‘While there have been periods in recent years where London’s rent price growth has moved more in line with other parts of the UK, most notably during the period following the financial crisis, the capital has always remained significantly ahead,’ he pointed out.

‘The convergence suggests that after a lengthy period of substantial outperformance in terms of rental increases, the pace of growth in London has slowed while the rest of the UK is catching up,’ he added.

Jim Coupe, managing director of Skipton International, said that the lender has seen interest from all over the world, but particularly the UAE. ‘Our customers are showing they are making the most of the buy-to-let opportunity and with many now viewing the London property market as overheated, demand is set to increase for properties in other areas of the UK where rental yields are looking far more attractive for buy to let investors,’ he added.

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