British expats investing in buy-to-let in London and the South East
British expats buying property in the UK to let out while they are living abroad are increasingly opting for homes in the Greater London area and the South East of England.
Some 40% choose buy to let in Greater London and 25% in the South East of England while 10% buy in the South West and the North West and 15% in the rest of England and Wales, according to figures from Skipton International.
Expats investing in property has increased in recent years mainly due to more mortgage products becoming available. It used to be virtually impossible for expats to get a mortgage and the only ones investing in real estate were cash buyers.
Skipton International launched its buy to let mortgage range in 2014 as a response to the difficulties British expat customers faced obtaining a mortgage on UK investment properties. Since then it has lent over £130m to British expats around the world and completed over 700 mortgages.
‘Property prices in London have increased significantly in the past few years, meaning that capital gains have been very attractive for investors. British expats have many reasons for investing in buy to let property in the UK and long term investment is usually the most important,’ said Nigel Pascoe, director of lending at Skipton International.
‘We see lower average Loan to Values in the South East and particularly London as the rental yields are lower in those regions. Further north in England where rental yields are greater, higher LTVs are supported,’ he explained.
Skipton International offers buy to let mortgages for British expats purchasing property in England and Wales, but not in Scotland or Northern Ireland. Earlier this year, Skipton opened up their mortgages to self-employed applicants and also expanded their eligible country list, enabling even more British expats to access the mortgages.
In a survey by Skipton International earlier this year 35% of people cited long term investment as their main reason for investing in buy to let property in the UK while 19% were doing so as part of their pension planning.
The survey also found that 12% wanted to have an investment in UK property, 10% wanted a rental income and 9% bought in their home country because they were either unable or unwilling to do so in the country where they lived.
Capital growth was ranked by just 6% of expats surveyed as the most important reasons for investing in UK buy to let property while just 6% indicated that a poor return from alternative investments and 3% ranked security of investment as the most important factors.