Britons living overseas are turning their attention back to the UK in order to invest in properties. The Greater London area and the surrounding South East region are proving especially popular with expats, with nearly two thirds opting for these areas when buying UK properties for buy-to-let purposes.
Recent figures show that more and more expats have been buying properties back in the UK in order to let them out over the past few years. The key driving force behind this trend is believed to be an increase in the range and availability of mortgage deals for this group of buyers. Not so long ago, it was very difficult for emigrants to obtain mortgages back home in the UK, meaning that most would-be investors who were not cash buyers found themselves locked out of the market. The past few years have seen lenders become increasingly willing to lend to expats, and this has resulted in the introduction of a range of products specifically aimed at this kind of buyer.
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Of those UK expats who choose to buy investment properties back in their home country, 40% choose properties located in Greater London according to data from Skipton international. A further 25% purchase their buy-to-let properties in the South East of England. The South West and North West of England together attract a further 10% of expat investors, while 15% choose to buy properties in other regions of England or in Wales.
Uptake of new mortgage opportunities for expat investors has been considerable, with some lenders reporting that they have lent many millions of pounds to hundreds of expats since introducing accessible mortgage deals. Borrowing trends vary somewhat, depending on which area of the country UK emigrants are choosing to invest in. London and the South East, where yields are lower, loan-to-value ratios tend to be lower than in higher-yielding regions such as the North of England.
According to Skipton’s recent survey, there are a number of reasons for UK nationals living overseas to take an interest in the property market of their native land. Over a third (35%) viewed UK properties as a long-term investment, and identified this as their main reason for buying. Nearly a fifth (19%) of expat investors considered their UK buy-to-lets to be a part of their provision for income in retirement.
Only 6% of respondents to the survey identified capital growth in the UK market as among their key reasons for investing, while a somewhat larger 10% were attracted to the rental income on offer. 9% had turned to their home country as a result of either not being able to invest in properties in their country of residence, or not wanting to do so for one reason or another.
The UK has a reputation among many foreign investors as a stable and safe market in which to invest, particularly in and around London. It seems this reputation is not so important among Britons abroad, however, as a mere 3% ranked security among their main reasons for investing.