UK Buy to Let Investors Looking Overseas
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According to the findings of a new report from investment provider Skandia, many buy-to-let (BTL) investors in the UK could liquidize their holdings and invest into other asset classes, including overseas property.
It believes that the combined effect of the credit crunch, sluggish rental growth and falling property prices will drive many BTL investors to look elsewhere for a better return on investment.
Skandia’s research has revealed that at least £18bn worth of equity tied up in houses and flats is expected to be released from property in the coming years as conditions worsen. It says that with inflation rising, investors realise the need for strategies that preserve their wealth and that asset diversification is an essential ingredient of any investment strategy, whatever the individual’s risk appetite may be.
The appetite for UK landlords to sell up and look abroad was highlighted recently by Savills Research which found, in a survey of 400 BTL investors (owning 2,782 properties), that many would be prepared to buy abroad should the pressure on returns increase.
Simon Conn, Sales & Marketing Director at Conti Financial Services, the UK’s leading overseas mortgage specialist, says: “The good news for any buy-to-let investors looking to purchase overseas is that in several countries now, including France, Spain, Greece and Portugal, a percentage of the rental income from an existing contract can be taken into account (this varies by country) by the lender when calculating how much they are willing to lend.
“Looking overseas is certainly a promising option. Recent reports suggest that the international market has not suffered from the same problems as the UK and the USA and that overseas property prospects are generally still good. The prime reason for this is the lack of a sub-prime market there – mortgage offers made by banks are based simply on affordability.”
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