Expat demand for buy-to-let investment in UK soars, report shows

Optimism and interest in the but-to-let market is still high, as putting money into bricks and mortar remains a popular long-term investment opportunity in the UK. This is despite the government’s intentions to phase out mortgage tax relief on properties, which are intended for this sector, by 2020.

Warning have been made that the buy-to-let market would diminish, but it appears that new clients, particularly expats, are still very keen to put their money into buy-to-let schemes.

There is now a growing feeling that a strong independent British housing market will be possible in the future. One benefit from the mortgage relief changes, is that landlords will get a reduction on their final tax bill of up to 20% of mortgage interest costs. For expats, their tax liability will in some way depend upon the rules regarding tax in their individual countries, and also if their country has a double taxation agreement in place with Britain.

Some lenders have seen demand for their mortgages almost double this year so far compared to during a similar period last year. It also appears that recent events have not dinted the confidence of foreign interest in properties in Britain. The same lenders have reported a 12% rise in interest from expats in the United Arab Emirates, a staggering 118% from Switzerland, and topping that a 162% increase from interested parties in Hong Kong.

The Financial Advisor Confidence Tracking Index, which revises information on a three-monthly basis, has observed an increase of 3.1% in general with mortgage applications. Managing-director John Heron says:

“Given the pressures on the private rented sector, it is important that potential landlords continue to be active purchasers and develop their portfolios.”

There has also been an upward trend in the availability of finance, with healthy competition increasing, for buyers seeking the best deal.

According to a survey by Knight Frank, some five million households in Britain use rented accommodation; these figures are likely to rise to 5.9 million. That is almost 24% of the UK population, by the year 2021. Some 80% of letting agents agree that rents will continue to rise in 2017, this is based on the Association of Lettings Agents (ARLA). The Royal Institute of Chartered Surveyors (RICS) also suggests rents will increase by 20% over a period of five years.

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