Buy to let bargains abound, thanks to Brexit effect, thinks broker
Look carefully and the UK buy to let market should have plenty of bargains to offer the expat and overseas buyers, thinks mortgage broker Offshoreonline.org. Whilst day to day market figures point to a flat or modestly positive UK housing market, up 1.3% in the year to September 2019, according to the UK Office for National Statistics, over the period since the Brexit referendum three years ago, the picture is very different.
Since the Brexit referendum in 2016, the rate of price increase in the UK housing market has fallen from 8.2% per annum in June 2016 to 1.3% in September 2019. This means prices have not risen at the same speed as they did prior to the vote, so today average UK house prices are necessarily much lower than might be expected.
Put another way, in the three years since the Brexit vote, prices have risen in total over three years by the same amount that prior to the vote they might have risen in just one year. The UK House Price Index for July 2016 gives the average property value in the UK as £215,127 and in September 2019 as £234,370, a rise of just over 8% over three years.
Add to this the fact that expat buyers overseas are not affected by domestic UK economic uncertainty and also that many are paid in Euros or US$ or US dollar linked currencies which have also appreciated against sterling and expat buyers of UK property should be looking at a very favourable market.
Guy Stephenson, director of Offshoreonline explains, “For the expat buyer of UK property, the Brexit effect has been a gift. Not only has sterling depreciated against key currencies such as the euros and US$, which effectively means an instant price reduction, but the domestic uncertainty caused by the Brexit vote had impacted the market too. Over the three years since the UK voted to leave Europe, housing market activity levels have weakened, as domestic confidence evaporated. This means that the percentage rate of house price rises seen prior to 2016 simply has not been repeated. As confidence in the politicians had ebbed, so activity in the housing market has reduced. Inevitably, prices have not risen as fast as they might have done, giving buyers an excellent opportunity.”
UK mortgage rates for expats continue to offer good value too. UK mortgage rates for expat buy to let mortgages are available from 2.74%, with fixed rate deals starting at 3.08%.