For expats who have UK buy to let property now could be a good time to look at the rate that you are paying on any UK mortgage. The Buy to Let market has developed enormously over the last few years and the rates available for Buy to Let property in some cases beat UK standard residential mortgage terms.
As an expat you will have come to realise how difficult it is to arrange anything to do with banks and building societies in the UK, whilst overseas. The lenders also have a hard time understanding the expat market. They do not realise the quality of expat mortgage business and fail to offer any terms or at best substandard terms for expat Buy to Let loans. Happily, more forward thinking lenders have realised this now and none of International Mortgage Plans (IMP's) lenders differentiate between expat and UK domestic borrowers even though the expat will normally be letting commercially with full tax efficiency on their interest payments.
Many expats have seen the value of their UK properties soar. Remortgaging can take advantage of this by releasing equity to fund overseas property purchase, retirement or education planning, care for sick or aged family or consumer products of any type.
Buy-to-Let Investors still smiling
Despite the mixed forecast for property values in 2005, buy to let landlords have remained confident. Paragon Mortgages, a leader in the field, confirm that the average property investor, who owned ten properties in 2000, now owns thirteen and is still looking to increase their portfolio. As home ownership has become more of a stretch for many prospective first-time buyers, many of them have stayed in rented accommodation longer. Very few buy-to-let landlords surveyed said they would be selling their properties in 2005 if prices should fall. Likewise, the Association of Residential Letting Agents (ARLA), have carried out surveys confirming similar results, that show that sensible buy-to-let investors are not short-termist in outlook and do not trade on emotive market signals. Some 89% of ARLA's 800 investors surveyed, said they would not sell, even if house prices fell but would be prepared to stand their ground and rely on a return to more favourable market conditions.
There are also changes to UK pension rules that come into effect next April which should give a further boost to the Buy to Let market. For the first time UK pension plans will be able to hold residential property and leading industry experts expect between £7-£11 billion will be invested in residential Buy to Let property. The prospect of being able to tax shelter their buy to let investments in pension arrangements has buy to let investors positively salivating! Quite why Gordon Brown should choose to initiate the biggest tax give away for high earners ever seen is beyond comprehension and the proposals are astonishing coming from a Labour government. Returns on buy to let investments could be almost doubled if the new planning is used correctly and to its full tax efficiency. This will undoubtedly give new impetus to the buy to let market.
Details of the current best Buy to Let terms available to expats are as follows:
- A two year fixed interest rate of 3.99%
- Lenders arrangement fee of 0.5% of the loan (can be added to loan)
- Redemption penalties apply in first 6 years. 5/5/5/4/3/2%
- A three-year fixed interest rate of 4.69%.
- There is a 5/5/5/2/2% early repayment penalty in first five years.
- No lenders Arrangement fee
- A three year fixed rate of 4.69%
- Redemption penalty 5% during fixed rate period - No extended "Tie-in"
- Lenders arrangement fee 1.5% (can be added to loan)
- A five year fixed rate of 4.99%
- Lenders arrangement fee 1% (can be added to loan)
- 5% early redemption penalty in first 5 years
- A two discount of 1.45% year current rate payable 5.29%
- Lenders arrangement fee 0.5% (can be added to loan)
- 5% early redemption penalty during discounted period only.
- A three year fixed rate of 5.49%
- No lenders arrangement fee
- 5% early redemption penalty during fixed rate period only.
For all schemes you can repay 10% of the capital per year without penalty.
Expats wishing to compare their own loan packages with current availability should click on IMP's website at www.international-mortage-plans.com which gives an overview of the current market place, lenders comparable terms and incorporate a cost and commitment free 24 hour acceptance in principle service. For further information please contact [email protected]
Home Truths of the Web
Another disadvantage, which expats faced when purchasing a property, was having to rely on what Estate Agents told them about a particular area and the property prices. An Expat can now find out themselves what properties have sold for in a particular area. It's all recorded on the web, the site www.nethouseprices.com which allows an expat to establish exactly what price property in a particular road/area has achieved since April 2000 The expat UK property buyer is newly empowered.
International Mortgage Plans are regulated by the Financial Services Authority our registration number is 302775. We hold consumer credit licence number 504524. Buy to Let mortgages are not subject to the new regulatory regime.