UK based expat property specialists reveal more lending options for buyers

by Ray Clancy on January 27, 2011

Lending options open up for UK buyers

Property search and mortgage specialists are cautiously optimistic about the UK property market as a buy to let option for expats.

Rising rental yields and falling property prices in some areas make property as an international pension or retirement plan an option, according to Erica Evans of expatriate property search agents Expatfindaproperty.

‘We are now starting to see rental yields rise and property prices fall in some areas. This weakening of prices is of interest to expatriate buyers, as it makes a buy to let rental property more affordable, yet at the same time rental yields can continue to drift higher,’ she explained.

‘We are now seeing enquiries from clients who wish to use property as a cornerstone of an international pension or retirement plan, as buyers look at the long term again. With rental yields still above mortgage costs for good quality properties, international pension planning based on property can be attractive,’ she added.

The company undertakes an analysis of an area where expats might be interested in buying, as ell as negotiating a good price and handing the purchase.

Tim Harvey, managing director of UK regulated discount brokers Offshoreonline, mortgage specialists for the expatriate market, said that while lending conditions remain tough for onshore buyers who are used to 100% mortgages, but for expatriates who have a 30% deposit, loans of up to 70% of a property’s value are readily available.

‘Expatriates looking to buy a main home or buy to let can secure interest rates of 3.24%, a figure which drops considerably if a larger deposit is offered. As a result, we have seen a pick up in enquiries from expatriates in Dubai and the Middle East as well as from those based in Hong Kong, where salaries tend to be high, so deposits are less of an issue,’ he explained.

He added that the number of lenders in the market looks set to rise too with at least two major organisations looking at plans to increase their expatriate mortgage books.

‘Buyers need to be realistic, the housing market is not a one way bet and there is sure to be more turbulence along the way as domestic demand falters. However, in central London, for example, buyers come from all over the world, providing a useful cushion for when UK demand weakens. The recovery in the market and easier access to funds is important for expatriates, as it means expatriate buyers can now take steps to confirm mortgage facilities before they return to the UK, so they can move more quickly, should they find a property that matches their needs,’ he said.

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