Expats and nationals in the United Arab Emirates buying more property in the UK

by Ray Clancy on November 29, 2017

Expats and foreign nationals in the United Arab Emirates are increasingly investing in the British property market as the currency rates make prices extremely competitive, new research suggests.

The latest data shows a 20% year on year increase in expats and foreign nationals within UAE investing in UK property. These buyers are investing in both buy to lets and first, or second homes.

(Marcin Wos/Shutterstock.com)

The research from Liquid Expat Mortgages also reveals that in 2017 some 60% of UAE expats and foreign nationals buying property in the UK, opted for Manchester, while 25% choose Birmingham.

However, London, where property prices are much higher than other parts of the UK, has seen a 60% drop in buyers, as a result of high property prices and poor rental yields, compared with other regions of the UK.

This growth in investors from UAE is partly down to the availability of a wider selection of mortgages designed for working expats and foreign nationals, which offer interest rates as low as 2.74%. This is significantly cheaper than the average mortgage interest rates in the UAE of around 4.25% for Dubai property.

According to Liquid Expat Mortgages, investors are also attracted by the UK’s robust legal system for property acquisition, which makes it one of the best places in the world to buy property.

Stuart Marshall, managing director of Liquid Expat Mortgages, explained that legislation in the UK protects property buyers and the process is straight forward compared with many other parts of the world.

‘For a long time, being an overseas investor was the preserve of those with wealth, who could afford to buy prime London property and take on a mortgage in excess of £700,000. Over recent years, there are many teachers, nurses, and IT workers who have been turned away from UK mortgage companies and have found it unaffordable to use brokers in UAE, as the deposits and interest rates are much higher,’ he said.

‘We have worked hard over that last five years to persuade lenders to create mortgage products for UAE expats and foreign nationals. We have also been able to secure mortgages for foreign nationals from offshore lenders and UK lenders, with a minimum £100,000 loans,’ he pointed out.

Many are choosing to buy property in the cities and towns in what is known as the Northern Powerhouse, as they offer the best investment opportunities in buy to let, with rental yields of 7.08% in Salford, 5.96% in Leeds and 5.79% in Manchester.

‘There has never been a better time to buy a property in the UK. The average house price has fallen compared with a decade ago and interest rates are at an all-time low, despite the recent rate rises. Think tanks are suggesting that the scrapping of stamp duty for first time buyers will push up prices. It is uncertain if this will be a reality, but whatever happens, the UK remains one of the best places in the world to buy property,’ Marshall added.

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