Because of recent developments, we really are seeing a perfect market for UK expat and foreign national investors at the moment.
What’s Happening in the Housing Market?
House price growth is currently at its lowest level since February 2020, having dropped to 0.7% over the last three months. The lack of activity in the housing market at the moment is also being reflected in sellers’ asking prices as, according to Zoopla, a quarter of sellers are now making asking price reductions. The average discount on a property has risen to 3% in recent weeks and 11% of sellers have accepted reductions of 5% or more. This is unrecognisable from the market we have seen for the last few years where many buyers were achieving sales above asking price. While overall house prices are not falling at the moment, the slowing growth coupled with a relatively unchanged economic picture more generally hints that we could be seeing widespread price falls very soon. Indeed, Zoopla report that they expect price falls of up to 5% in 2023.
Slowing Growth is Good News for UK Expat and Foreign National Investors.
‘The fact that growth is slowing, and prices are reducing but not by massive sums means that a housing crash is unlikely’ says Stuart Marshall of Liquid Expat Mortgages. ‘This is due to the continued strength and security of UK property as an asset class and highlights why UK property is such a popular investment choice for UK expat and foreign national investors. The fact that prices and market conditions are returning to pre-pandemic levels is good news for UK expat and foreign national investors as they will be able to pick up a bargain on many properties when considering their relative price compared to recent history. On the other hand, the damage that has been done to domestic buyer confidence and aspirations is likely to stay for a long while, meaning that the rental market will continue to grow and, consequently, stay incredibly profitable for UK expat and foreign national buy-to-let property owners. In short, then, UK expat and foreign national investors have an excellent opportunity to pick up a discount priced property which stands to make great profits in the current rental market.’
Greater Choice a Factor.
‘UK expat and foreign national investors are also benefitting from the increased choice in the marketplace’ says Stuart Marshall. ‘The number of properties for sale is growing across the UK, with the average agent having their highest level of stock in two years. This increase in the number of available properties is beneficial to UK expat and foreign national investors as the increased choice allows investors to better tailor their investment to their precise needs. Not only this, but the increased number of properties will reduce the upwards pressure on house prices, giving UK expat and foreign national investors a better chance of picking up a bargain. Seeking the help of an expert UK expat or foreign national mortgage broker is a good choice in a market with a lot of options as they can help to establish the investor’s goals and narrow down the search to properties that might best satisfy these.’
Keeping an Eye on City Centres.
Though house price growth has slowed, it’s important to remember that this year has been an extraordinary year for growth, with city centres in particular proving popular. For example, Nottingham, Manchester, and Bournemouth have recorded record year-on-year house price growth. This highlights the fact that the housing market is not a one-size-fits-all situation, and there will always be pockets in which activity differs from the rest of the market. This is why it is so important that UK expat and foreign national investors get the best advice possible when choosing a property, as making the right decision early on can maximise both capital growth and rental yields for years to come, determining the overall success of the investment. However, it’s worth noting that though annual price growth in cities has been immense, the rate of price growth has slowed down massively in recent months, indicating that it’s a good time for UK expat and foreign national investors to get a slice of the highly lucrative city-centre rental market.
‘City centres have been one of the big winners this year in the property market’ adds Stuart Marshall. ‘Investors have swooped in to snap up these properties in a bid to capitalise on the huge demand consumers have exhibited for city centre flats. With growth slowing in these areas, UK expat and foreign national investors looking to invest in a city centre rental property would be wise to talk to an expert UK expat or foreign national mortgage broker so that they can have everything in place to capitalise on the reduced prices.’
Liquid Expat Mortgages
Ground Floor, 3 Richmond Terrace,
Phone: 0161 871 1216
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+44 161 633 5009