The UK property market remains an attractive place for investors as house prices continue to climb. According to Halifax, property prices registered the strongest monthly rise for 14 years in September, pushing the average cost of a home to a record high and reversing a three-month decline in annual growth.
At the same time, estate agent Savills has said that London’s high-end property market is showing glimmers of recovery following a second consecutive quarter of price increases on the back of years of falling or flat-lining values, according to new data. Savills says that prices of expensive London homes rose by 1.4% in the year to September, including a rise of 0.7% in the latest three-month period.
Activity in the top-end London market is also a sign that foreign investors are returning to the UK capital. With travel restrictions easing and property prices remaining robust, this trend is likely to continue, which means you are more likely to encounter foreign nationals or expats who want to invest in UK property. And just as domestic investors are increasingly seeking investments that can deliver greater returns this is something you should expect to see more of from your expat and foreign national clients.
The good news is that there are opportunities for expats and foreign nationals to invest in things like HMOs and holiday lets. At Castle Trust Bank, we recently worked with a foreign national who had been living in London for more than five years. They had clean credit and owned their main residence and they were looking to purchase a four bed HMO in an area that was already established for HMOs and with four occupants already in situ. The client was looking to raise 75% LTV, and this proved a challenge with some lenders, given that it was their first investment property and they were, of course, foreign nationals. However, given the strong set of circumstances, we were able to help them achieve their objectives.
Another recent case was an expat couple living in Switzerland. They owned two Buy to Let properties in the UK and were looking to make their first UK holiday let investment – a property based in the North of England near the Lake District. The yields were promising and so the couple were looking for a lender that could take into account their existing letting experience in the UK so they could purchase the property. Again, we were able to weigh up the case and given their Buy to Let track record, we were able to help these expat clients to buy their first holiday let investment.
The strong UK property market is going to attract an increasing number of expat and foreign nation investors and often they will want to invest in more complex, high-yielding options. This combination is likely to put many lenders off, but in the right circumstances, with a strong case behind them you can still find a way to help these clients access the finance they need to help them achieve better returns. You just need to know which lenders to turn to.
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