UK mortgages on UK properties for non-UK residents and expats have never been easy to source due to the specialist nature of them. In addition, Brexit added to the complexity with financial services not being included in the Brexit Trade Agreement meaning UK financial advisers, products and services cannot be marketed in EU countries resulting in many mortgage providers ceasing to offer expat mortgages.
At one point, there was only limited availability for non-UK resident mortgages. Things appear to be softening again with nearly 300 different mortgage products available to expats and foreign investors.
Why is UK Property Popular?
Add to the above, a weak pound at present makes UK property an attractive investment for expats and some foreign investors. Do not be fooled though by the seemingly large numbers of non-resident mortgage availability. Mortgage rates can range currently from 9% pa at 80% loan to value (LTV) for more difficult cases to 3.7% for clean cases at 75% LTV. In addition, application fees can be quite high.
Non-Resident Mortgage Issues
Tax and Duty Issues
Stamp duty land tax on the purchase price is already quite high in the UK but with a 3% additional levy for investment property and an additional 2% levy for a non-resident purchase, stamp duty rates can range from 5% on a small value purchase all the way up to 17% for a large value property.
Unless the property is your permanent main residence, second homes, investment ‘buy to let’ or holiday let property purchases will also be subject to income taxes on rental income, capital gains taxes on profits if you ever sell or dispose of the UK property and for all, UK inheritance taxes on death.
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