As mortgage rates in the UK have moved in a positive direction, those looking to secure a foreign national mortgage or expat borrowing are able to obtain better rates too.
The Bank of England base rate dropping from 5.25% to 5.0% at the beginning of August led major banks and specialist lenders to slash mortgage rates. While the Bank voted to hold the rate on Thursday 19th September, lenders are expected to continue to offer more competitive products to attract and retain borrowers. Many economists are predicting another rate reduction to come at the Bank’s next meeting in November.
Similar patterns are also emerging for foreign national mortgages, so expats and overseas buyers and investors are able to take advantage of better rates and looser criteria in some circumstances. Five-year fixed rates are currently offering particularly competitive rates.
With the recent drop in mortgage rates, this has sparked renewed optimism among overseas investors and across the UK housing market as whole. And higher product numbers also mean a healthier range of choices among borrowers.
Stuart Marshall, CEO of Liquid Expat Mortgages, said: “Things will continue to progress quickly in the UK expat and foreign national mortgage market. Base rate reductions are expected to continue, so would-be UK expat and foreign national investors should keep a close eye on these developments and how they might affect mortgage rates.”
Demand for foreign national mortgages
Competitive mortgage deals and a weaker pound will likely drive demand for foreign national mortgages. At the end of the summer, there had been a rise in property listings and reduced competition among domestic buyers, which was an advantageous environment for overseas investors.
The UK housing market is set for an autumn boost as the sector has seen an upward trajectory this month in terms of activity and house prices, with a greater level of appetite returning. Most analysts are expecting this to continue with the possibility of more interest rate cuts later in the year paired with a strengthening economy.
Despite numerous knocks, the UK housing market has remained remarkably resilient, demonstrating strong long-term growth even following relatively short-term sticky periods. With confidence improving in the sector, this will likely boost appetite for foreign national mortgages in the UK.
Searches by overseas buyers
With more than 1.5 million people owning property abroad, demand is remaining strong among overseas buyers. Recently 1st Move International analysed internet searches to reveal the most sought-after countries for buyers and investors globally.
The UK came in fifth place with more than 1.116 million Google searches. The country’s diverse culture, rich history and world-renowned educational institutions appeal to many international buyers every year.
The widespread use of English makes it even more attractive for certain buyers, including US property investors. Additionally, as it’s seen as a more predictable market, the UK property market’s growth prospects also make it an especially appealing property investment destination.
In recent years, US investors in particular have been able to secure discounts compared to when the pound was previously performing more strongly. This, along with lower foreign national mortgage rates and strong growth prospects, will likely mean UK property remains a popular choice for a range of overseas buyers, including US investors.
To find the right UK property for your circumstances, many overseas buyers opt to work with an agent or property investments specialist. This is similar to the way property is sourced by buyers in the US – through a realtor. They also come with the benefit of having local knowledge to help the investor find the best option for them.
If you’re an overseas buyer looking to invest in UK property, BuyAssociation can help you find the ideal property investment opportunity. For more information on how to invest in UK property, get in touch.
