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The British property market has long been attractive for foreign investors who are drawn to the UK by a robust legal framework and rising house prices. The UK property market is a benefactor of controlled planning and strict regulations that ensure a degree of legitimacy that cannot be found overseas.
Buy-to-let landlords who have significant capital readily available, can cost effectively invest in one or more properties. In addition, interest rates are at an all time low, with the Bank of England deciding to keep interest rates at a steady, low figure for some time. The decision was also taken to keep interest rates on hold in the aftermath of the brexit vote and recently this continued after the UK general election, ensuring that the investment market continually ripens. It could be said that the equilibrium between the factors mentioned, make current economic climate the perfect time to invest in the UK property market.
The criteria for foreign investors to get a buy-to-let mortgage is similar to that of UK residents. The most important things to take into consideration are:
Rental Income - The rental income you receive generally has to be between 145% of the monthly mortgage payment. To determine this, usually lenders will assess how much rent you will earn from the property each month, verifying this with a survey.
Deposit - the larger the deposit you can pay, the more favourably you’ll be viewed by mortgage lenders.
Your Income - Most lenders also require a minimum of £25k per annum in addition to income from rent.
If you are an EU citizen then mortgage lenders will be able to check your credit history, helping to give you a mortgage the same way a UK citizen would be receive one. However, for non EU-citizens it is a little more difficult. If you have been a resident in the UK for at least two years or have a full UK work permit, this makes applying for a buy-to-let mortgage fairly simple.
It is important that you are able to evidence your income, for example if you are self-employed this will make things difficult. Therefore have your accounts made up by an accountant with an international presence and ensure all documentation is in English.
To be successful in obtaining a buy-to-let mortgage always use a buy-to-let advisor. It’s essential you identify a mortgage broker with expertise in foreign investment in the UK property market. This is key to finding the best deal and ensuring you don’t pay any higher fees or suffer from any early repayment penalties.