2023 has already been a turbulent year for the UK rental market. As we move through Q3 and into Q4 of 2023, Liquid Expat Mortgages make some Q3 & Q4 market predictions for UK expat and foreign national investors.
Prediction 1: Further Falls in House Prices Will Continue to Help UK Expat and Foreign National Investors.
House prices have been falling throughout 2023. This trend was almost inevitable as there was bound to be some degree of moderate price correction from the huge property price rises that happened over lockdown and the following years. However, property prices have been hurt more than even some analysts predicted. This is largely as a result of higher mortgage rates, weakened buying power because of these mortgage rates, the cost-of-living crisis and prices not correcting enough to offset those other factors. Because the base rate – and consequently mortgage rates – are still high, it’s unlikely that buyer demand will return in the way it would need to maintain property prices. Consequently, prices are likely to continue falling throughout the rest of 2023.
‘These price falls will be welcomed by many UK expat and foreign national investors’ says Stuart Marshall. ‘For those who are looking to invest in property, more affordable properties will increase rental yields and give greater capital growth potential. Further, UK expat and foreign national investors are likely to be in a beneficial position to negotiate further price reductions as they benefit from the deals available from expert UK expat and foreign national mortgage brokers. The drops in property prices could be significant too, with Savills indicating that prices could fall by as much as 10% across the UK. For existing investors, prices are unlikely to fall enough to offset the effects of the positive growth of the rental market.’
‘Predictions about price falls also indicate just how important it is to invest in the right areas of the UK. For example, the North West fairs better than other areas of the UK when looking at the predictions for price falls. Even the worst predictions for the North West have falls at 8.5%, with a lower actual figure much more likely. This is why expert UK expat and foreign national mortgage brokers like Liquid Expat Mortgages have been praising areas like the North West for a while now. With more changes on the horizon, securing the services of an expert UK expat or foreign national mortgage broker can pay both immediate and long-term dividends.’
Prediction 2: Off-Plan Will Grow in Popularity for Future-Focused UK Expat and Foreign National Investors.
‘At this point, off-plan has become one of the most attractive options for any UK expat or foreign national investor looking to satisfy the incoming EPC regulations. Of course, many investors see these new regulations as part of a bigger shift towards sustainability in the housing and rental market. And these changes certainly aren’t going anywhere – so sustainability must be a key focus for any canny UK expat or foreign national investor.’
‘One reason why we expect off-plan to grow in popularity is because the cost of bringing an existing property up to standard with the new regulations can be extremely costly, so buying a newbuild or off-plan property will present much better value for money as many of these properties have better EPC ratings and incorporate eco-friendly technologies. These properties are also very attractive to potential tenants, both for their environmentally conscious angle and their cost-saving potential. Further, there are specialist green deals available for UK expat and foreign national investors through expert mortgage brokers. These deals are available for those who buy eco-friendly properties or commit to renovating existing properties. By utilising these deals, UK expat and foreign national investors are able to make even greater savings and further increase the profitability of their investment properties.’
Prediction 3: Mortgage Rates Will Slow.
‘It’s almost inevitable that mortgage rates will slow through the remainder of 2021. Because of the Bank of England’s base rate rises, mortgage rates are currently unaffordable to so many people. This has contributed to the market slowdown that we mentioned earlier and predicted to continue throughout the rest of 2023. However, with signs of stabilisation ahead, it’s likely that lenders will start to reduce their rates to entice new business into the marketplace.’
‘This is particularly good news for UK expat and foreign national investors. While the modest reductions that we might see in mortgage rates for the average UK buyer will do very little to move the needle on the accessibility of properties for them, other more attractive buyer groups are likely to see bigger reductions proportional to their buying power. Amongst these groups are UK expat and foreign national investors, who often benefit from bigger deposits, higher incomes, and favourable currency exchange rates. UK expat and foreign national investors also benefit from the deals they can access through expert UK expat and foreign national mortgage brokers. These brokers are often a necessity because of the difficulties UK expat and foreign national investors encounter using high street lenders. However, many specialist brokers like Liquid Expat Mortgages have access to exclusive deals, which can help to increase the profitability of an investment venture.’
Prediction 4: The Rental Market Will Peak.
The rental market has grown and grown because of a lack of supply and high demand caused by the lower accessibility of properties. This has been of massive benefit to UK expat and foreign national investors who have profited from the increased competition in the rental market. And this demand is unlikely to go anywhere as many renters continue to be barred from buying a home by the difficult market conditions. However, it’s likely that rents will start to slow through the end of the year as landlords avoid increasing rental prices to such a degree that they make renting a property untenable.
‘This is a classic case of ‘don’t rock the boat’’ says Stuart Marshall. ‘UK expat and foreign national landlords have benefitted from the increased rental market competition for a while now. And while some have had no choice but to increase rents to offset rising mortgage rates, it’s likely that many will keep rents as they are through the rest of 2023. After all, many are already seeing strong yields if they have invested in a solid property. And these investors will know that it’s better to keep hold of desirable tenants than risk a void period with ridiculously inflated rental prices. For investors who aren’t making as much money from their investment property, it’s possible that the investment is not up to the standard it should be. Speaking to an expert UK expat or foreign national mortgage broker can help to resolve this: either through refinancing with a more favourable mortgage deal or by selling the property and investing in something more lucrative to take advantage of the booming rental market.’
Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Road, Rossendale,
BB4 5HU, United Kingdom.
Phone: 0161 871 1216
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