With older buy-to-let investors retiring, the buoyant rental market and availability of mortgage products, there are many opportunities for a new generation of UK expat and foreign national investors.
Older Investors Retiring.
Many early buy-to-let investors are starting to retire and sell their properties. According to research from Hamptons International, around 140,000 landlords retired in 2022 and these sales accounted for 73% of total landlord sales. With 96,000 landlords turning 65 each year across the UK, the numbers of landlords retiring is likely to continue growing, especially with 924,000 UK landlords already over the age of 65. With older investors leaving the market, there is a lack of younger investors stepping in to fill the gap – this is creating opportunities for a new generation of savvy UK expat and foreign national investors.
Why are there Fewer Landlords?
Tax and regulatory changes are some of the main reasons that new investors are not coming into the investment market. Further, while young investors in the 90s could afford to buy their own property and a buy-to-let property, many young people in today’s market are unable to do this. Indeed, young people are even struggling to buy their own house – a situation which has contributed to a very buoyant rental market.
The New Generation of UK Expat and Foreign National Buy-to-Let.
‘UK expat and foreign national investors are in an enviable position when it comes to the UK rental market’ says Stuart Marshall of Liquid Expat Mortgages. ‘Not only do they typically earn more and benefit from favourable exchange rates, but there are also a number of exclusive UK expat and foreign national buy-to-let mortgage deals available. These offer favourable rates to would-be UK expat and foreign national investors and can be facilitated by the use of an expert UK expat or foreign national mortgage broker.’
‘The lack of new blood in the UK investment market has a number of positive consequences for prospective UK expat and foreign national investors’ says Stuart Marshall. ‘For one, it means that there is less competition for UK expat and foreign national investors when it comes to buying the perfect investment property. High quality investment properties mean big profits and have historically been very competitive. But with existing UK investors selling off these sorts of properties and low numbers of domestic buyers coming in to fill the gap, UK expat and foreign national investors are able to pick up some of these uniquely profitable properties. Second, the demand for rental properties in the UK is going nowhere. As we noted already, the numbers of renters in the market are huge, with many would-be buyers unable to purchase homes of their own. With fewer available rental properties because of both demand and supply from investors, UK expat and foreign national investors are able to make big profits from the right property.’
A Great Time to Invest.
It is a perfect time for UK expat and foreign national investors to invest in UK property. And not only because of the exodus of older investors. The rental market is also highly profitable because of the huge numbers of renters, low availability of rental properties and high cost of living. The property market also has a great deal of choice at the moment, while mortgage rates have currently come down. The number of mortgage deals available has also recovered to pre-mini-budget levels, meaning greater choice for UK expat and foreign national investors.
Rental yields are also incredibly high at the moment. According to Fleet Mortgages’ Buy-to-Let Rental Barometer, rental yields rose from 6% in 2022 to 6.5% in Q1 of 2023. This is the highest rental yield recorded by the Barometer. This is likely due to a short supply of rental stock, high tenant demand and slowing house price growth.
There were rises across all regions, with the exception of the North West and South West, which had quarterly falls of 0.1% and 0.2% respectively. This is likely in response to exceptionally high growth in these areas in recent times. The North East is the standout region, with a rental yield of 8.8%, an annual increase of 0.4%. In monetary terms, the average rental income increased by £135 per month between Q1 of 2022 and 2023, with average rental income rising from £1256 to £1345 per month between Q4 of 2022 and Q1 of 2023 alone.
‘Clearly then,’ says Stuart Marshall, ‘it is an incredibly strong investment market for UK expat and foreign national investors at the moment. The falling numbers of investor-owned properties and swathes of retiring investors presents a very unique opportunity, however. Since the buy-to-let market started, this is not something that we have seen before, where huge numbers of investors are leaving the marketplace at once. The opportunity for UK expat and foreign national investors utilising UK expat and foreign national mortgage products is huge and those buying the right properties stand to profit long into the future.
Liquid Expat Mortgages
Ground Floor, 3 Richmond Terrace,
Phone: 0161 871 1216
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