2022 Trend Predictions in the UK Expat and Foreign National Mortgage Market

2022 trend predictions uk

With 2022 already well underway, we predict three trends from the 2021 housing market that are set to continue through 2022.

Trend Prediction Number 1 – The North Will Remain a Hot Area.

‘This really isn’t a difficult prediction to make’ says Stuart Marshall, CEO of Liquid Expat Mortgages. ‘However, I’m always surprised by the lack of awareness about the North that my team report from various UK expat and foreign national investors. So many of these investors look immediately to London when looking to invest in UK property – it has a name value and tried-and-tested status that is very attractive. But, in recent years, the profitability of London is waning with expensive property prices and reduced rental demand affecting rental yields in the capital.’

‘Conversely, the North has been growing in popularity and profitability. The enduring popularity of cities like Manchester and Liverpool has contributed greatly to the shift in investment focus. The remote working revolution has encouraged many millennials to leave London in search of greater affordability and this has led to booming demand for rental properties in the North. This has led to some of the UK rental market firsts that we saw in 2021, including the number of properties available to rent in Manchester falling below 500 for the first time (according to research from Urbanbubble).’

‘More generally, the rental prospects across the North are far outperforming those in other regions. In the North East – an area that steadily grew in popularity across 2021 – investors have been seeing astonishing rental yields as high as 9.6% (in County Durham) with other parts of the region, like Middlesbrough, not far behind at 9.2%. The North West has performed similarly, with the average rental yield in Manchester reaching 8.55% – more than double the UK average. Regional growth in the North West has also reached 12% meaning that UK expat and foreign national investors are earning twice on their investments – through rental yields and capital growth.’

Key Takeaways:

Trend Prediction Number 2 – The Student Rental Market Will Become an Area of Note.

We noted a trend towards student property investment around the end of 2021, but we predict that this is a trend that’s going to solidify across 2022. The demand for student rental properties is soaring and with universities unable to satisfy the demand for this type of product, we’re seeing a rare opportunity being offered to the private rental sector. The soaring demand has led to rental price growth as high as 26% in some parts of the UK.’

‘This area is of specific interest to UK expats and foreign nationals as many of them know the market they are catering for – often sending their own children to study in the UK and live in similar properties. The foreign national student market is also typically more demanding than the domestic student market when it comes to property, with foreign national students often looking for high spec properties. This presents excellent opportunities for high rental yields for many years to come and UK expat and foreign national investors are jumping at this opportunity. For new UK expat and foreign national investors, student property represents a relatively ‘safe bet’ as there is a readymade customer base and some student properties can be slightly cheaper than a regular buy-to-let. For experienced UK expat and foreign national investors, securing a mortgage on a UK student property can be a great way to diversify an investment portfolio.’

Key Takeaways:

  • Investors spent £5.77 billion on purpose-built student accommodation in 2020.
  • Student rental prices have grown by as much as 26% in the last five years.
  • UCAS reported an 8.4% rise in the number of applications for the 2021-2022 academic year.
  • UCAS predicts the number of students in the UK to rise from 2.5 to 2.9 million by 2030.
  • UK student properties consistently achieve rental yields above 8% for investors.

Trend Prediction Number 3 – Green Renovations, Mortgages and Re-Mortgages Will Grow in Popularity.

‘The Green Revolution will continue to march on in 2022’ predicts Stuart Marshall. ‘We’re hearing more and more about this from our panel of lenders and many of our customers are also asking about green mortgages and green renovations. This is an unavoidable trend for 2022 given the new legislation that is set to be brought in in 2025. Under this new legislation, from 2025 UK property owners will be unable to rent their property to a new tenant if the property has an EPC rating of a D or below. Without conducting renovations to make existing properties greener or buying a green property in the first place, the quality of UK expat’s and foreign national’s investments will be badly affected. UK expat and foreign national investors in the know are also aware that there are preferential rates and green mortgage deals to be had in the UK mortgage world.’

‘With the necessity of green renovation and the increasing accessibility of preferential green mortgages, re-mortgages are also bound to maintain their current popularity for UK expats and foreign nationals in 2022. While re-mortgages can reduce the interest rates on your mortgage, they are increasingly popular with those who need to improve the energy efficiency of their property. Used in this way, UK expats and foreign nationals are re-mortgaging their property to achieve preferential rates and also borrowing extra to fund green renovations to their properties, thereby ensuring that the investment remains profitable for years to come.’

Key Takeaways:

  • From 2025, rental properties with an EPC rating of a D or below will not be able to accept new tenants.
  • 17% of BTL landlords have refurbished their property in the last year to make it more ‘green efficient’.
  • 18% of tenants said they would pay more for their property if it had new windows.
  • 13 million homes currently have an EPC rating of a D or below.

Liquid Expat Mortgages
Unit F2, Waterfold Business Park,
Bury BL9 7BR
Phone: +44 (0) 161 871 1216

Any media enquiries please contact Ulysses Communications
+44 (0) 161 633 5009