Buy-to-let properties are an attractive source of
income for expat investors and looking in your home
country is a particularly alluring prospect. A home
back home provides a safety net for Britons abroad,
and a diverse portfolio can also form part of your
pension. Holiday lettings often benefit from a coastal
location, but it's the capital that remains truly
popular for long-term landlords.
house prices have defied the slump, in part due to
the interest from international buyers. The capital
is currently the fourth most expensive place to buy
in the world, according to figures from Savills, and
the sales keep on coming. More than £3.3billion
was invested in London property last year.
Cox, the owner and publisher of What Boat? International
magazine, currently has three properties in the UK,
one of which has been let for more than 15 years.
"I've had success with properties with good transport
links to London," he said. "It's also important
to buy in an area you know well." But securing
finance from outside of the UK may prove tricky. The
main high street banks that will lend to expats are
Halifax, part of Lloyds Banking Group, and NatWest,
part of the Royal Bank of Scotland. Lloyds TSB International
is a popular banking choice for expats but last year
said it would no longer accept mortgage applications
from overseas buyers living in Italy, Ireland or France.
Offshore operations are also an option – Mr
Cox, for example, used NatWest in the Isle of Man.
will need considerable funds to secure a property
– a typical deposit is around 30%, though experts
hope that will fall to 25% soon, while fees are about
1% of the loan amount. You also need to consider tax
issues and forex rates. You may buy a property in
sterling but receive your income in another currency
– this leaves you vulnerable to fluctuating
exchange rates. If you are a cash buyer, sales can
take six to eight weeks to complete – more if
buying off-plan – and rates can change during
should also consult an international financial adviser
about the implications of drawing an income from a
source in Britain. Estate agents with buy-to-let UK
property packages will be able to advise, but it pays
to also get independent advice. After all, for expats
who move overseas to retire, a property portfolio
could provide for their future. Stewart Dick, head
of sales at Hornbuckle Mitchell, believes that a recently
proposed move to include residential property in pensions
would be of interest to many expats. "Current
law bars pension savers from including residential
property in their SIPPs and SSAS but if it were allowed
we could expect a great deal of interest, as many
view residential property as a far more accessible
and understandable asset class than commercial property,"
Knight Frank and Harrods Estates are popular estate
agents for premium property but humble family homes
remain in demand too. Research from property firm
Paragon found that from the start of 2012, professional
landlords have increased the size of their portfolio
by 1.8 properties to an average of 10.8 properties.
Terraced homes remain the most popular purchase, followed
by flats and semi-detached homes.