August 2010 – Interest rates kept on hold at 0.5%

Posted on August 5, 2010 by ADMIN

The Bank of England has kept rates low for 18 months.

The Bank of England has voted to keep interest rates on hold at 0.5% amid concerns over the strength of the economic recovery. This is again further positive for expats who have Interest Only buy to let tracker UK mortgages where the continuing and historical low bank of england base rates allows the excess rental income to pay more off the capital outstanding. This also means the net rental yields from UK and London property is buoyed by the historically low interest rates.

The decision by the bank’s Monetary Policy Committee (MPC) means rates will stay at their current record low for an 18th month. Stuart Marshall from Liquid Expat Mortgage comments that whilst bank of England base rates have been historically low for over a year and a half and all the latest signals from the Bank of England suggest this to remain so for the foreseeable future, lenders are yet to reflect this in their pricing for two and three year fixed rate mortgages.

Inflation remains well above the bank’s target rate of 2% on the Consumer Prices Index (CPI) measure, at 3.2%

Expat whom are looking to remortgage from their lenders current standard variable rate should look at the available UK and Offshore tracker mortgages available to them and compare them against the available fixed rate mortgage.

Posted in News | Tagged , , , , , , , , , | Comments Off

Does an Expat need a “UK Credit History” to obtain a UK Mortgage?

Posted on August 4, 2010 by ADMIN

The simple answer to this common question asked by British Expats is No, it is not essential in having a UK credit history in order to raise a UK mortgage.

Having a current or previous Uk credit history is not a pre-requisite to obtain a UK mortgage, however in certain circumstances it can allow an Expat to secure more competitive and flexible mortgage terms than those on offer by an Offshore or International Lenders whom generally do not require a credit check!

Stuart Marshall, Business Development Director of Liquid Expat Mortgages provides an insight into this often misunderstood issue and provides several examples of how a UK credit history can help and ways an expat can improve their UK credit history whilst living and working overseas.

Whether you are a British Expat or Foreign National looking to invest in a UK property with the need of a mortgage, then it is NOT essential that you have a credit history or report in the UK. The key reason for this is because most UK and Offshore lenders only require your address history for the last three years. Many expats have been working overseas for at least this time and therefore the finance companies are not able to run a credit check through the likes of Experian and/or Equifax. Obviously Foreign Nationals whom have never resided in the UK do not have a historical credit file and the appropriate Offshore banks and lending institutions recognise this fact in their application and underwriting procedures. Liquid Expat Mortgages has helped hundreds of clients from all corners of the globe secure UK Mortgages whom have either never lived in the UK or have been an expat for many years and have no current or recent connections with the UK. The mortgages arranged for Expat clients are both buy to let, main residential and self build mortgages.

The UK credit history and report does become an important consideration when an Expat has been living in the UK at any point in the last three years and they are looking to secure a more competitive deal from a UK lender, as opposed to an offshore lender. Moreover, many expats may still have an existing UK address they continue to keep as their banking correspondence address and as such, allow UK lenders to credit search them at this location and fulfil the lenders credit scoring procedure. Many expats keep their parents address as a UK banking address for their correspondence. This helps clients whom are wanting to get back on the UK property ladder and are looking for lenders whom do not impose a minimum £100,000 loan amount and are looking for mortgage deals that do not have bank arrangement fees of 1% which many of the offshore and international banks charge.

The UK providers of mortgages whom can often make the application process much quicker for Expats looking for either buy to let or main residential mortgages are more likely to have lower arrangement fees, more competitive interest rates and a wider choice of availability of fixed rate and tracker mortgages.

Three quick tips on how an Expat can create and improve their UK Credit Score ?

1) Either maintain a UK address for banking correspondence or reinstate one back in the UK, e.g. your Parents address back in the UK. This allows a UK lender to credit score your application at a UK address and broadens the available mortgage options to you.

2) Before you apply for UK credit, get a copy of your credit file from either Experian (www.experian.com), Equifax (www.equifax.com) or CallCredit (www.callcredit.co.uk). All three offer instant access to your statutory £2 credit report online. You simply need to complete an application on their websites and you will instantly have access to your credit file. Once you have reviewed, feel free to forward this to your mortgage broker so they can understand any potential issues they need to consider before applying.

3) Dealing with any late payments or previous CCJ’s. If as an expat you may have missed a payment due to relocation or re-organising your finances when living overseas, then you can apply for a ‘notice of correction’ to be applied to your credit report. This is a 200 word statement which explains why payments were missed. For example, they have always met repayments on time in the past but moving or working overseas meant they had a period when their hectic life meant one or two repayments got missed. You will need to explain that now that you are settled working abroad, all financial commitments for repayments are in order and back up to date.

If you are an Expat or Foreign National looking to raise a Mortgage to help secure a UK mortgage or are simply looking to remortgage an existing loan, please contact stuart@liquidexpatmortgages.com or call
+44 161 633 5009

Posted in News | Tagged , , , , , , , , , , , , , , , , , | Comments Off

Bank of England governor hints rates will stay low

Posted on July 28, 2010 by ADMIN

The Bank of England’s governor says slow economic growth is a greater concern than rising prices.

The governor of the Bank of England Governor, Mervyn King, has said he is more concerned about the strength of the recovery than inflation.

His comments, made during an appearance in front of the House of Commons’ Treasury Select Committee, suggest he believes interest rates should stay low for the foreseeable future. Stuart Marshall from Liquid Expat Mortgages suggests that with several tracker mortgages available to expats starting at 2.39% above Base Rate with low arrangement fees of £500, this is positive news to expats whom are either looking to get back on the UK property ladder or purchase a second home.

Mr King said he could not be confident that growth was firmly established.

Latest figures show the UK economy grew by 1.1% in the second quarter.

The gross domestic product (GDP) figures were stronger than had been expected.

But Mr King said there was no pressing need to rein in rising growth or curb inflation. He said: “The debate is about the appropriate degree of stimulus, not about applying brakes.”

The latest minutes from the Bank’s Monetary Policy Committee (MPC), which sets interest rates, showed one member out of eight voted to raise rates from their current level of 0.5% to curb inflation. With fixed rate mortgages available to expats for buy to let and main residential mortgages starting at 4.2% plus, this may place low rate tracker mortgages in a new light.

The central bank governor’s comments were in harmony with a report from the National Institute for Economic and Social Research (NIESR).

For more information available on UK mortgages for expats, please contact Stuart Marshall, Business Development Director of www.liquidexpatmortgages.com or email stuart@liquidexpatmortgages.com

Posted in News | Tagged , , , , , , , , , , | Comments Off

UK interest rates to stay at record low “until 2014″ The Bank of England lowered interest rates to 0.5% in March 2009

Posted on July 27, 2010 by ADMIN

The Bank of England will have to keep interest rates at their record low of 0.5% until 2014, a leading economic forecaster has said.

The Ernst & Young Item Club said rates would need to be kept low to counter-balance the government’s spending cuts.

“A base rate of 0.5% will begin to look like the new normal,” Professor Peter Spencer from the Item Club said.

The Office for Budget Responsibility (OBR) has said that it expects rates to start to rise next year.

Interest rates have stood at 0.5% since March 2009.

“The new coalition’s plans to cut the deficit are certainly ambitious,” said Prof Spencer.

“On the assumption that the government is able to implement the overall reduction of £40bn set out in the Budget, we expect that UK growth will struggle to reach 1% this year but will gradually speed up in the following years to give the UK a high-quality recovery based on trade and investment.”

The Item Club believes the Consumer Prices Index (CPI) measure of inflation will stay above the Bank of England’s 2% target over the next 18 months, helped by high energy prices and increases in VAT.

But it says inflation will then fall “well below 2% as these effects wear off and spare capacity bears down on pricing decisions and wage bargaining”.

“To prevent CPI inflation moving below 1% it will be necessary keep the Bank base rate low at 0.5% for much longer than the OBR and the markets have anticipated,” Item said. Stuart Marshall from Liquid Expat Mortgages comments that the prospect of low base rates for their Expat Borrowers is certainly good for those currently on base rate trackers.

Posted in News | Tagged , , , , , , , , | Comments Off

Going to a UK University! Take a look at how buying a UK property can be an Investment for both Students & Expatriate Parents

Posted on July 19, 2010 by ADMIN

As both British Expat & Foreign National Students prepare to return or start their courses at UK universities, Stuart Marshall of Liquid Expat Mortgages explains that buying a UK student home, as opposed to simply renting a property for the duration of a degree course, can provide an opportunity for parents as and not just an expense.

Now that university students are finishing their exams and turning their attention to where they will live for the next year or two, this is the ideal time for parents to consider the benefits of investing in UK buy-to-let student housing.

A combination of factors such as the uncertainty of the current economic climate, favourable exchange rates back to GBP Sterling and the low cost of UK housing at the moment, provide the perfect opportunity for Expat parents to find a competitive deal on buying a UK property. When you look at these factors with the historically low UK base rate, it’s probably fair to say that if your child or children are at University this is a good time to consider purchasing a UK property as opposed to renting.

The student housing market is a resilient one right across the UK. There is always a massive demand for good-quality housing to accommodate the thousands of students who live in the cities during term-time. With more students than ever before now attending UK universities, there is a severe shortage of property, as many universities are already near capacity. Liquid Expat Mortgages explains that overseas buyers can even be looking to secure a UK property for their children’s future UK University up to 10 years before they will be attending. Stuart Marshall comments this is particulary common for overseas buyers from the Far East who will simply rent the property out in the Buy to Let market before their children reach the relevant age and attend one of the London Universities.

There are many benefits which you could take advantage of when purchasing UK property. For instance, if you put the property in your child’s name and they plan on living in the property throughout university, there is no capital gains tax to pay. Additionally, the rent-a-room scheme allows your child to rent out a room and earn up to £4,250 per year tax-free.

Parents could remortgage their UK or Overseas property in order to buy a property in their child’s name, but it is necessary to seek the advice of an independent financial adviser before taking any major steps. An IFA will be able to explain all the available options and offer guidance on how to go about purchasing a second (or First) UK property.

Location is a key factor when choosing your property. Parents should only consider purchasing property in densely populated student areas and where nightlife is lively and where there is easy access to campuses and colleges.

The recommendation is to purchase a house rather than a flat, as students will enjoy a greater sense of community living in a shared house. If the child you are buying the property for already knows which friends they want to live with, you already have a ready-made set of guaranteed tenants, which is ideal.

However, there are significant tax and legal implications to bear in mind when renting a property to students. Landlords have to pay income tax on the revenue generated from rent, while other practicalities include gas and electricity safety certificates, landlords’ insurance, and multiple occupancy licences. You may also have to chase your rent and be prepared to pay a substantial amount for the general maintenance of the property.

It really is worth making the most of this opportunity while UK property prices are currently low as they won’t always stay this low, but remember that property doesn’t work as a short-term investment. It is a long-term commitment which will require ongoing maintenance, which can often be long after your child’s three years at university are over, so make sure that you ask for an IFA’s advice before you make your decision

Posted in News | Tagged , , , , , , , , , , , | Comments Off

More than 50pc of large London properties bought by UK Expats & Foreign Buyers

Posted on July 12, 2010 by ADMIN

More than a half of large London properties are being bought by foreigners for the first time, according to data from a leading estate agent.

Savills, one of the countries largest estate agents, said that 55 per cent of all properties in London worth more than £750,000 that it sold were bought by foreigners this year, compared with 45 per when the housing market hit its peak during 2007. Stuart Marshall, Business Development Director at www.liquidexpatmortgages.com confirms the British Expats and Foreign Nationals are benefiting from their favourable exchange rate back to GBP, available deposits, genuine choice and access to UK and offshore mortgage lending means because the investment/equity markets are still perceived as volatile, investing back into UK property remains a popular and simple investment choice/strategy.

Though large houses and upmarket flats have often been bought by foreigners in London, this is the first time that an estate agent has said that more than half its clients are from overseas.

Liquid Expat Mortgages, specialists in arranging UK and Offshore Finance for Expats and Foreign Nationals, confirms London and UK property market below £750,000 is still a hugely popular mortgage requirement for their clients. The combination of lending requirements for both Buy to let purchases and also to secure a home prior to an expats return remains the core of their new purchase enquiries. A recent trend has seen many overseas buyers looking for a piece of London real estate that can be bought and let out prior to their children looking to study at a London University in the future.

The statistics come just a week after rival firm Knight Frank said that 46 per cent of buyers of “prime property” in central London were foreign.

The falling value of the pound has been the main cause, encouraging rich foreigners to buy homes in the capital as an investment.

Experts said the number of wealthy Russians, Italians, French and Middle Eastern buyers were helping the top end of London avoid the wobble in house prices, which had affected the rest of the country. But they warned that it could distort the market, pushing up prices of large family homes at the expense of long-term residents of the capital.

According to the Land Registry, prices in London have increased by 14 per cent over the last year, considerably higher than the national average increase of 8.5 per cent. Some areas, particularly in the north east of England have seen a substantial fall.

Simon Rubinsohn, the chief economist at Royal Institution of Chartered Surveyors, said: “Are there ill effects and distortions in the market by foreign buyers snapping up high-end properties in London? There may well be in certain areas.”

Wealthy foreign buyers have part of the property scene in London for decades, especially in areas such as Belgravia, Knightsbridge and Mayfair, where prices have risen so high most families cannot afford to live there. Most residents in these areas are international businessmen, many on short-term leases. Many of the properties are purely investments and remain empty. Stuart Marshall, Business Development Director at www.liquidexpatmortgages.com, states that many of their clients are purchasing London Property below £500,000 as purely a buy to let investment, with yields above 5% and genuine possibilities of capital growth in the short to medium term.

Savills said that what was eye-catching was that international buyers, who previously had dominated the market for properties worth £2 million or more, were starting to look at less expensive homes, down to £750,000 – the price of a four-bed home in many parts of London, not just the very centre.

Yolande Barnes, head of Savills residential research, said: “The weakness of sterling, and the consequently strong purchasing power of foreign currency buyers, has undoubtedly fuelled this rise and international buyer demand remains robust. By the end of March 2010 property prices were 10 per cent lower than their peak for sterling buyers, but in US dollar and euro terms they remained 33 per cent and 30 per cent below their peak respectively.”

Posted in News | Tagged , , , , , , , , , , , , , , , , | Comments Off