"What we are seeing is investors, including expats, are still buying-to-let in Britain, but perhaps focusing on lower loan-to-values and using larger deposits to take the various changes into account"
There has been an increase in the number of enquiries from expats into buying-to-let in Britain, according to our own poll of brokers.
Our recent survey of financial intermediaries revealed that 68 per cent of respondents had seen a rise in enquiries from British expats about buy-to-let mortgages for UK property, following Brexit.
These findings reflect the growing demand we’ve been seeing for buy-to-let mortgages from overseas investors; due partly to the strength of foreign currency against the pound - attributed to the ‘Brexit effect’ – creating an investment opportunity.
Following Brexit, the pound has weakened against the US dollar, leaving Brits living in countries where the currency is pegged to the USA’s, such as Hong Kong, attracted to investing in property back in their home country.
It was a concern for some that the new rules from the Prudential Regulation Authority (PRA) introduced early this year, which limited the amount expat landlords could borrow and tougher lending tests, would impact demand, but our findings would suggest this hasn’t been the case.
What we are seeing is investors, including expats, are still buying-to-let in Britain, but perhaps focusing on lower loan-to-values and using larger deposits to take the various changes into account, as well as adapting their portfolios and business models to maintain their profitability; for example by looking at up-and-coming areas across the UK instead of the more traditional rental hotspots like London.
A challenge that some expats face, whether buying traditionally or at auction, is a lack of credit history which can be an issue with the mainstream lenders.
However, specialist lenders such as Together can offer buy-to-let mortgages to expats with more personalised underwriting, which take into account their individual circumstances.
Given the strong rental market in the UK and interest rates at an historic low, it appears that expats are still keen to keep a foothold on their home property ladder, and whilst the buy-to-let market has faced a number of challenges recently, those taking a long-term view seem undeterred.