property ownership

UK general election result set to boost property sales to expats and foreigners

by Ray Clancy on May 19, 2015

There are signs that British expats have been buoyed by the country’s general election outcome and are looking at investing in property as a result.

De Vere Mortgages, which specialises in loans for expats buying abroad or in the UK, as well as foreign nationals buying in the UK, has reported a noticeable surge in serious home loan enquiries since the election.

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The volume of mortgage enquiries has increased by more than 50% since the election

It comes at a time when getting a mortgage in the UK is harder since new rules were introduced a year ago designed to make sure applicants can afford to pay back their home loan.

The self-employed, older applicants and those abroad on assignments have been affected the most and are more likely than others to be turned down by lenders since the MMR rules were introduced last April.

The rules mean that applicants have to prove that they have enough income to repay a mortgage and this can prove difficult for people living abroad.

According to deVere’s head of UK Financial Planning, Kevin White, demand for mortgages has been strong all year, but the volume of enquiries has increased by more than 50% over the last seven days, compared to the previous week.

‘The majority of these enquiries were from overseas buyers and British expats who want to purchase a UK property but who had been, for various reasons, waiting to see the outcome of the election before pursuing,’ he said.

Tom Elliott, the firm’s international investment strategist, believes that the UK property market should benefit from the Conservative Party’s general election win as it means the threat of a new property tax for property worth over £2 million was putting off a lot of investors from overseas.

‘There will be no mansion tax, and indeed property will be slightly less taxed if the Conservatives carry out their promise to exclude property under a certain value from inheritance tax,’ he explained.

‘More generally, the election result has confirmed that Britain remains a pro-business, pro-property owning country backed up by a robust legal framework. The alternative proposed by the Labour party would have led to more government intervention in the economy,’ he added.

The Labour Party has also pledged to get rid of the non-dom status that would have affected wealthy foreign buyers. Now, they can carry on investing in UK property without having their tax status affected.

While prices are rising, the British property market, especially in London, is seen worldwide as a safe investment and continued low interest rates and inflation means that it is still competitively priced on a global scale.

Property prices in London have been falling due to concerns in the run up to the general election about who would win and are now expected to start rising again. Uncertainty saw new instructions fall, according to the Royal Institution of Chartered Surveyors (RICS). RICS now expects prices to rise steadily over the next 12 months.

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