Rent now cheaper than buying – Investment opportunities for UK expats
The cost of renting becoming cheaper than buying creates an opportunity for rental investors, with rents increasing and rental time decreasing.
– Stuart Marshall
MANCHESTER, GREATER MANCHESTER, UK, July 13, 2021 /EINPresswire.com/ – By causing the suburban area to flourish, raising the cost of houses, helping to drive up rents and creating a market for two speeds, COVID-19 The pandemic has changed a lot of things in the real estate market. However, a recent change is that it is now cheaper to rent a house than to buy one. We take a look at what this means for UK expats and foreign investors.
Cheaper to rent than to buy.
According to a recent report by Hamptons International, potential buyers with a 10% down payment will now pay £ 71 more per month to buy a property than to rent it out. This was not the case before the pandemic (March 2020), when the same buyer would have paid an average of £ 102 less per month if he had bought instead of rented.
This tendency is exasperated if you deposit a lower deposit amount. For example, with a 5% down payment, you would have £ 195 per month more to rent than to buy. This is because lenders charge higher interest rates on 95% LTV mortgages and other low deposit mortgages.
Changing lifestyles and rental investments.
“Buying a rental property has always been a great investment choice for many UK expats and foreign investors,” says Stuart Marshall of Liquid Expat Mortgages. “Rising house prices are preventing many potential first-time buyers from buying property and moving from the rental market to home ownership. However, more and more people are also choosing to stay in the rental market. This appears to be the case with young people who focus less on buying a property and more on lifestyle. Young people tend to favor urban areas where they can maintain a vibrant social life around restaurants, bars and clubs. They are better prepared to move and live abroad or travel, and do not want to be “tied” by a mortgage. For these people, renting is a lifestyle choice.
These changes in the rental market and a younger workforce mean rental real estate can be an incredibly lucrative investment business. “When you buy an investment property as a UK expat or a foreign national,” continues Stuart Marshall, “we always advise you to imagine your ideal tenant. This will help you decide what type of property to buy. For example, with the idea that a vibrant social scene will be high on your ideal tenant’s wishlist, you would probably prefer a city center location in a UK hotspot like Manchester or Liverpool, where downtown prices are still high. . “
Why is a rental property a great investment?
“Buying rental property in the UK as a UK expat or foreign national can be tricky, but it’s easy with the right advice and help. Investment properties can pay dividends throughout your working life and into retirement. An expert broker like Liquid Expat Mortgages can really help overcome the pitfalls and make the whole process easier than it looks.
“Plus, there are so many reasons why investing in rental property is a great financial decision. On the one hand, while it may be cheaper to rent than to buy a property, that doesn’t mean that rents have gone down. In fact, the opposite is true. Hamptons International reports that over the past year, rents in the UK have increased by 7.1%. This is sure to continue as the demand for rental properties continues to grow, more and more people are choosing to stay in the rental market and others are forced to stay in the rental market after having been excluded from the purchase of goods themselves.
“Another thing to note is that the time taken to rent a rental property has dropped to an all time high. In May 2021, the average time taken to rent a property in the UK was only 8.9 days. This means that not only are rental properties in high demand, but you can start to see returns on your investment almost immediately. ‘
But where should I put my money?
While current property prices may be of concern to some investors, there is still a lot of good investment to be made. There are currently four regions in the UK that are going against the trend that renting is cheaper than buying. The North East, the North West, Yorkshire and the Humber and Scotland. Plus, these are some of the UK’s most lucrative areas for rental yields and capital growth. So, for sophisticated investors, the more affordable parts of the UK can offer excellent returns.
“City centers are currently very popular. The cost of a property in the city center fell during the pandemic, due to the increased prevalence of working from home and the corresponding popularity of the suburban area and the family home as people searched for more. of space. However, as life begins to move closer to the new normal, signs of life are appearing in downtown areas as people return for work and lifestyle reasons. The current relative affordability of downtown properties won’t last forever, so buying now could mean big profits in the future – through both rental returns and capital growth. ‘
“City hot spots such as Liverpool and Manchester present strong investment prospects, with constant pools of graduate talent available for businesses that thrive and locate in these areas. They also feature great social stages, strong transport links, and a relatively affordable price compared to other major UK hubs like London. There are currently high levels of development in these cities, which means that you could buy an off-plan investment property, which will further improve the affordability – and therefore the profitability – of your investment.
Liquid mortgages to expatriates
Unit F2, Waterfold Business Park,
Bury BL9 7BR
Telephone: +44 (0) 161 871 1216
For all media inquiries, please contact Ulysse Communications
+44 (0) 161 633 5009
+44 7811 326463
write us here
Visit us on social networks: