UK housing market weakens favouring expat buyers

UK housing market favours expat buyers following a fall in expat mortgage interest rates and a weakened housing market.

Terraced housing in London
Recent falls in expat mortgage interest rates, plus the effect of a weak housing market in the UK look set to give expat house buyers a significant negotiating edge in the busy summer buying period when many expats return to the UK, according to expat mortgage broker, Offshoreonline.org.“The availability of lower expat mortgage rates, whilst at the same time, many regions in the UK are reporting softer domestic housing demand and falling prices opens up opportunities for overseas buyers who are not affected by domestic UK economic pressures,” said Offshoreonline spokesman Guy Stephenson.

Costs of mortgages in the UK

As the threat of an increase to the UK Base Rate and with it expat buy to let mortgage rates recedes, Offshoreonline reports several lenders have begun to cut expat mortgage rates and reduce bank administration fees.Variable rate loans are available for expat buy to let purchases from 2.89 per cent from experienced lenders in the market, whilst two year fixed rates start at 3.19 per cent and five year fixed rate at 4.19 per cent.Expat buyers remain concerned about possible mortgage interest rate rises, but as Stephenson points out, these may end up being far more modest when the UK Base Rate does eventually increase.
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Mr Stephenson added, “The period since the financial crisis has been one of abnormally low UK Base Rates, but equally unsustainably high bank margins, as banks have rebuilt their balance sheets.“Before the 2008 financial crisis, many mortgage providers would typically aim for a margin of anything from 0.75 per cent to 1.25 over UK Base when setting mortgage interest rates, but today, many lenders are still achieving nearly three times this level of mark up on loans.“As and when UK Base rates do rise therefore, lenders will have the ability to trim margins, so the impact on borrowers can be softened.”Offshoreonline is a UK based specialist expatriate and international broker offering advice on UK, French, Italian, Portuguese and Spanish mortgages.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory