Relaxation of COVID Restrictions Triggers Spike in Ex-Pat Mortgage Interest

Specialist brokers across the UK have reported a major spike in mortgage interest among ex-pats over recent months, credited largely with the loosening of COVID-19 restrictions and the reopening of the country’s borders.

Expat Mortgages UK managing director, Daniel Yorke, said that while there had been a “gradual increase over the past 12 months”, the last three months in particular saw a more rapid increase in activity.

Analysts are now predicting even faster growth in the near future, with particularly heavy emphasis on the growing popularity of BTL investments among overseas investors.

Speaking on behalf of Knowledge Bank, operations director Matthew Corker noted a major uptick in the number of ex-pats looking to purchase private rental properties in the UK.

“While the growth has been steady in residential searches, there has been a significant increase in ex-pats look for BTL properties. Partially driving this interest is the volatility in the stock market, coupled with UK house prices exceeding all growth expectations,” he said.

“Lenders are also reacting to this trend and there have been more and more adding products for expat borrowers. With house prices and rents looking set to keep increasing, we anticipate this growth to continue in 2022.”

Specifically, Mr Corker stated that while standard expat residential searches were up by around 7% year on year, searches for buy-to-let properties increased by around 16% during the same period.

Anthony Rose, co-chief executive of LDNfinance, likewise noted a significant increase in the number of ex-pats demonstrating an interest in BTL mortgages.

“Most of our enquiries have been expats returning to the UK looking to buy, or they’re refinancing their existing UK properties,” he said. 

“However, we have also noticed that the end of the stamp duty holiday and strong property market post-Covid has played a vital role in clients obtaining expat mortgages for BTL properties.”

Mr Rose went on to highlight the potential challenges being faced by such borrowers, for whom product availability is limited at best.

“It’s a small, niche space which can involve placing square peg clients in round holes. Often, expats have bespoke circumstances that require providers to have a flexible approach to lending,” he said.

“A classic example is intended date of return home; some lenders require a specific date whereas others need some ballpark timelines. Naturally these times can change so it’s difficult for clients to pinpoint precisely. Lenders need to be mindful of this.”

Chris Sykes, associate director and mortgage consultant at Private Finance, suggested that growing interest among overseas investors could breathe new life into London’s fairly lackluster property market.

“We do now see this as an area that we expect to grow post-pandemic, especially as London returns to life and with prices having stagnated in the capital, this could be an attractive time for expat buyers and importantly investors,” he said.

He went on to say that it “remains to be seen” whether market activity will soon return to pre-COVID norms, but indicated that the release of a “great deal of pent-up demand” following two years of stagnation could be in the imminent horizon.

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